Author Topic: Less choices vs. more fees  (Read 1791 times)

firescape

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Less choices vs. more fees
« on: March 29, 2017, 08:11:16 PM »
Hi All,
Our advisor, with a big firm, suggested we move from a commission based plan to a fee based on assets invested plan, due to the upcoming change in the fiduciary rule change. With that move comes more cost, about 2 to 3 times best I can figure, but with the assurance we'd be able to invest in better funds and have more choices. I'm still unclear on some things...
    Why now? What does the rule change have to do with moving to another plan now?
    I'm considering quitting EJ altogether, feel like I'm getting the run around. If I sell off the mutual funds I own now, is there an expense?
    The world of investing is complicated. What should I be considering here to make the best choices?
    Is anyone else frustrated with Ed Jones?
   
   

MDM

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Re: Less choices vs. more fees
« Reply #1 on: March 29, 2017, 10:11:45 PM »
Hi All,
Our advisor, with a big firm, suggested we move from a commission based plan to a fee based on assets invested plan, due to the upcoming change in the fiduciary rule change. With that move comes more cost, about 2 to 3 times best I can figure, but with the assurance we'd be able to invest in better funds and have more choices. I'm still unclear on some things...
1) Why now? What does the rule change have to do with moving to another plan now?
2) I'm considering quitting EJ altogether, feel like I'm getting the run around. If I sell off the mutual funds I own now, is there an expense?
3) The world of investing is complicated. What should I be considering here to make the best choices?
4) Is anyone else frustrated with Ed Jones?

1) Could it be "[w]ith that move comes more cost"?
2) Maybe.  Need more details to know for sure.  You could call Fidelity or Schwab or Vanguard to ask the cost of moving "in kind" and selling at one of those brokers.
3) See Getting started - Bogleheads.
4) You could check some of the threads found at edward jones - Google Search.

NoStacheOhio

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Re: Less choices vs. more fees
« Reply #2 on: March 30, 2017, 11:01:35 AM »
http://kronstantinople.blogspot.com/p/edward-jones-saga.html

Long, but worth it.

EJ is terrible.

Read this too: http://jlcollinsnh.com/stock-series/

TL;DR it's only scary and complicated because of the people who make money when it's scary and complicated. Read up, figure out your risk tolerance, pick a couple low-cost index funds and set it to cruise control.

firescape

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Re: Less choices vs. more fees
« Reply #3 on: March 30, 2017, 07:58:34 PM »
Thanks Nostacheohio and MDM. I'll read my butt off. That's what I was looking for, to be pointed in the right direction.
I feel like I've just woken up and realized that I was the 'mark' all along. Darn that stinks! Only felt sorry for myself for a minute or two, then started reading. Great empowering context with money/finance around here. Really glad I discovered the site.
Thanks again.

ysette9

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Re: Less choices vs. more fees
« Reply #4 on: March 30, 2017, 08:10:55 PM »
Sorry in advance, but I have to do this.

"Choices" is a countable word. (As opposed to "diversity" or "wealth" or other non-countable words)

One uses "fewer" with countable words and "less" with non-countable. Therefore, fewer choices. :)

ysette9

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Re: Less choices vs. more fees
« Reply #5 on: March 30, 2017, 08:25:34 PM »
Back on post: welcome to the site! It is a heady sense of empowerment when you begin learning and realize that you really can do this yourself. You deserve much better than EJ and thankfully better choices are easily available. Come back here and ask any questions you have as you do your reading. This is a great community full of smart people who are ready to help.

firescape

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Re: Less choices vs. more fees
« Reply #6 on: March 30, 2017, 08:37:51 PM »
You are correct, it should be 'fewer choices'. I'll be back alright. The more I explore the site the more I like it.
Thanks.

Lucky Penny Acres

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Re: Less choices vs. more fees
« Reply #7 on: March 30, 2017, 09:24:55 PM »
The fiduciary rule change that was mentioned has been delayed and is highly likely to never be implemented due to the change in administration. It was a Department of Labor fiduciary rule.

The rule would have made it more difficult for brokers and advisers to recommend investments for your IRA or other retirement account with respect to which they received commissions (i.e., most mutual funds that have a front-end load, a deferred sales charge or other marketing fees pay those fees to the brokers that sell the funds). To comply with the proposed fiduciary rule, many brokers and advisers changed their default compensation system from commission-based to a flat percentage of assets - for accounts that don't trade much, they will likely make more money with a % of assets instead of commissions.

aspiringnomad

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Re: Less choices vs. more fees
« Reply #8 on: March 30, 2017, 10:13:21 PM »

You could call Fidelity or Schwab or Vanguard to ask the cost of moving "in kind" and selling at one of those brokers.


Do this ASAP and enjoy more choices and fewer/lower fees. If you transfer in-kind there should be little immediate cost (though I'm sure EJ has some phony fee to get you one more time on the way out), then you can figure out the estimated tax hit and any loads before deciding whether to sell the crap the EJ advisor bought you.