Author Topic: Edward Jones vs Vanguard  (Read 31372 times)

whitetailugys

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Edward Jones vs Vanguard
« on: April 03, 2016, 07:55:11 PM »
My wife and I have been investing with Edward Jones for a good handful of years now and have multiple IRAs, Roths, and 529s. But on just about every account, I consistently have less than the cash I invested. My 401K, with work, is through Vanguard and I have profits there. With Edward Jones I am charged a sales commission for every dollar I invest and a yearly fee for my four IRAs. I am thinking about moving my Edward Jones accounts over to Vanguard, but I am nervous to do so as I can directly talk to my Edward Jones advisor face to face and that lends me a level of comfort (although I don't fully trust her because of my balances). Just looking for some fellow mustacheians to comment please. Thanks.

PhysicianOnFIRE

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Re: Edward Jones vs Vanguard
« Reply #1 on: April 03, 2016, 08:27:43 PM »
My wife and I have been investing with Edward Jones for a good handful of years now and have multiple IRAs, Roths, and 529s. But on just about every account, I consistently have less than the cash I invested. My 401K, with work, is through Vanguard and I have profits there. With Edward Jones I am charged a sales commission for every dollar I invest and a yearly fee for my four IRAs. I am thinking about moving my Edward Jones accounts over to Vanguard, but I am nervous to do so as I can directly talk to my Edward Jones advisor face to face and that lends me a level of comfort (although I don't fully trust her because of my balances). Just looking for some fellow mustacheians to comment please. Thanks.

Read the Edward Jones Saga. After you have read the entire diatribe, consider your options.  If you really need a face-to-face option, consider Fidelity or Schwab. If not, look to Vanguard and ask any question on Bogleheads or this forum.  You'll get better answers than you would with your former "advisor".

Zamboni

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Re: Edward Jones vs Vanguard
« Reply #2 on: April 03, 2016, 08:34:58 PM »
Wow . . . just, wow. I am so sorry that Edward Jones has been ripping you off for so long. The time to leave is now.

MDM

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Re: Edward Jones vs Vanguard
« Reply #3 on: April 03, 2016, 08:48:53 PM »
I am thinking about moving my Edward Jones accounts over to Vanguard, but I am nervous to do so as I can directly talk to my Edward Jones advisor face to face and that lends me a level of comfort (although I don't fully trust her because of my balances).

What are some of the questions you have raised in those face to face meetings?

Another Reader

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Re: Edward Jones vs Vanguard
« Reply #4 on: April 03, 2016, 09:12:27 PM »
In the Sun Cities in Arizona, there is an Edward Jones office in every shopping center.  They prey on the widows with significant savings by being nice - sending Christmas and birthday cards, asking after the children and grandchildren by name and all the things that lonely older folks want.  Meanwhile, they are robbing these ladies blind.  In your shoes, I would pick the one of the big three previously mentioned, and have them transfer everything over.  It's easier than having a long, unpleasant conversation with the EJ person.

FIRE_Buckeye

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Re: Edward Jones vs Vanguard
« Reply #5 on: April 03, 2016, 11:33:43 PM »
Read the Edward Jones Saga. After you have read the entire diatribe, consider your options.  If you really need a face-to-face option, consider Fidelity or Schwab. If not, look to Vanguard and ask any question on Bogleheads or this forum.  You'll get better answers than you would with your former "advisor".
Wow, certainly some scary eye-opening stuff.
While I manage my own investing (primarily through Vanguard), my parents, girlfriend, and her parents all use EJ for the reason the article states; they aren't knowledgeable when it comes to investing, and the friendly EJ advisor gives them some sense of comfort.

Guess some account analysis, and potentially hard conversations may be in order.

Knapptyme

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Re: Edward Jones vs Vanguard
« Reply #6 on: April 04, 2016, 02:28:35 AM »
For the record, not all Edward Jones FA are corrupted by the empire that is Edward Jones. They do, however, hear it from command central that they must be doing something wrong not to have all the right funds being funded through the right channels. I'll give you one example where high fees are likely but not a guarantee.

American Funds, yes their pet kickback machine, charged an annual $10 maintenance fee. Many of you may be familiar with the usual $40 EJ maintenance fee for American Funds. Well, my brother, the actual advisor, realized that the fee was only $10 for a directly deposited account that circumvented EJ entirely. One day, EJ looked at his records and asked why he had millions of dollars invested through him, but none through the money machine of AF. He replied that he did, in fact, invest in the money machine AF, but through the most cost effective means for his clients. They offered him a grandfathered deal that would allow the same $10 maintenance fee for all his clients if he would move it into the EJ loophole for kickbacks. He obliged when the price was right for his clients.

I get it. Some of the EJ's FA are slimy. My brother knows a lot of them. They mostly ask him why he doesn't do this or that and make seven figures. Granted, I have some bias to like my own brother, but I do believe he's not just towing the company line to make a profit. I also have access to some commission-free transactions because I'm family, so it makes it easier to palate otherwise costly fees of EJ. I suppose for this reason, I am a rare client who does not get Christmas and birthday cards/calls from the EJ office.

Bottom line for everyone--don't hate the people, take the time to know what you're investing in, it's worth it. And for what it's worth, because my 403b is not through EJ, I will likely roll it over into Vanguard when I'm done working.

RyFI

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Re: Edward Jones vs Vanguard
« Reply #7 on: April 04, 2016, 08:38:23 AM »
Until recently I had some money invested with Edward Jones but have now moved it all to Vanguard.  I started at Edward Jones when I was 8 years old ($ from delivering newspapers) simply because my uncle suggested it.  I recently retired early (age 32 right now) and finally took the time to analyze my investments (my retirement income is from rental homes, not the market).  I wish I would have done this 15 years ago!!  I suspect I would have a lot more money in my account had I been with Vanguard all along.  This isn't all EJ's fault...yes, the EJ fees are high, however in general I think index funds would have performed better than the EJ mutual funds.

Upon moving my accounts to Vanguard, Edward Jones even charged me a fee to leave!  I think that says something, but you can be the judge.  As a comparison, at the same time I also did a 401k rollover from Fidelity that I had with my former employer.  I switched so I could have everything at Vanguard, however the Fidelity customer service was great.  Fidelity was super friendly and helpful even though what they were helping me with was to terminate my accounts with them.  Again, I think that says something.

To me it's a no-brainer, go to Vanguard.  If you need the service and advice, Vanguard has answered my calls quickly every time I've needed something.  The agents are knowledgeable and can provide investment advice to you over the phone.  If you want more personalized service, like you talk to the same person each time who helps manage your account, I believe Vanguard has a service you can pay for.  Even paying for this service, my guess is that it's still cheaper than the fees Ed Jones charges.

Best of luck!

forummm

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Re: Edward Jones vs Vanguard
« Reply #8 on: April 04, 2016, 08:51:44 AM »
I thought it was funny that occasionally I see EJ ads on this forum.

FrugalFan

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Re: Edward Jones vs Vanguard
« Reply #9 on: April 04, 2016, 09:07:53 AM »
My wife and I have been investing with Edward Jones for a good handful of years now and have multiple IRAs, Roths, and 529s. But on just about every account, I consistently have less than the cash I invested. My 401K, with work, is through Vanguard and I have profits there. With Edward Jones I am charged a sales commission for every dollar I invest and a yearly fee for my four IRAs. I am thinking about moving my Edward Jones accounts over to Vanguard, but I am nervous to do so as I can directly talk to my Edward Jones advisor face to face and that lends me a level of comfort (although I don't fully trust her because of my balances). Just looking for some fellow mustacheians to comment please. Thanks.

Read the Edward Jones Saga. After you have read the entire diatribe, consider your options.  If you really need a face-to-face option, consider Fidelity or Schwab. If not, look to Vanguard and ask any question on Bogleheads or this forum.  You'll get better answers than you would with your former "advisor".

We just switched away from Edward Jones over the few months. It was hard as we liked our advisor, but reading that link made my stomach turn. Things are a bit different here in Canada (different funds, never heard of door to door), but we were paying him 1.5% of our portfolio, which consisted of 90% mutual funds with >2.5% MER's and >5% deferred sales charges. Who knows what else we were paying for (though as of July this year, new Canadian regulations will force all financial advisors to report all fees explicitly). You can always hire an advisor that charges by the hour if/when you need one. I'm just glad I finally read up enough about investing to know that this was a ridiculous waste of money, and I feel bad for everyone else who doesn't know enough yet. Hopefully the new regulations will help.

NoStacheOhio

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Re: Edward Jones vs Vanguard
« Reply #10 on: April 04, 2016, 09:14:24 AM »
American Funds, yes their pet kickback machine, charged an annual $10 maintenance fee. Many of you may be familiar with the usual $40 EJ maintenance fee for American Funds. Well, my brother, the actual advisor, realized that the fee was only $10 for a directly deposited account that circumvented EJ entirely. One day, EJ looked at his records and asked why he had millions of dollars invested through him, but none through the money machine of AF. He replied that he did, in fact, invest in the money machine AF, but through the most cost effective means for his clients. They offered him a grandfathered deal that would allow the same $10 maintenance fee for all his clients if he would move it into the EJ loophole for kickbacks. He obliged when the price was right for his clients.

That's not really much better. He still has his clients in a high-fee, load fund that pays kickbacks to his company. It's just $30 less per year than his compatriot down the street.

Ceridwen

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Re: Edward Jones vs Vanguard
« Reply #11 on: April 04, 2016, 09:25:46 AM »
My cousin just became an EJ rep.  I was absolutely baffled when I heard this news, as he has no financial experience at all, and a completely unrelated university degree (criminology or something).  After years of trying, he couldn't get into any law schools, and this is now his career path.  Reading that link was very eye opening, and pretty sad.  I love him and I wish him well, but damn - that sucks.

forummm

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Re: Edward Jones vs Vanguard
« Reply #12 on: April 04, 2016, 09:47:11 AM »
My cousin just became an EJ rep.  I was absolutely baffled when I heard this news, as he has no financial experience at all, and a completely unrelated university degree (criminology or something).  After years of trying, he couldn't get into any law schools, and this is now his career path.  Reading that link was very eye opening, and pretty sad.  I love him and I wish him well, but damn - that sucks.

They aren't providing good financial advice. They are salesmen.

Ceridwen

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Re: Edward Jones vs Vanguard
« Reply #13 on: April 04, 2016, 09:51:03 AM »
My cousin just became an EJ rep.  I was absolutely baffled when I heard this news, as he has no financial experience at all, and a completely unrelated university degree (criminology or something).  After years of trying, he couldn't get into any law schools, and this is now his career path.  Reading that link was very eye opening, and pretty sad.  I love him and I wish him well, but damn - that sucks.

They aren't providing good financial advice. They are salesmen.

Yes, that's what I understand now.

ltt

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Re: Edward Jones vs Vanguard
« Reply #14 on: April 04, 2016, 10:25:53 AM »
We have money in EJ--I'm still somewhat mad at them due to the Lehman Brothers debacle.  We lost quite a bit, but have recovered some.  But the trust just isn't there for us.

Noahjoe

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Re: Edward Jones vs Vanguard
« Reply #15 on: April 04, 2016, 12:59:51 PM »
Nobody cares more about your money than you. If you take one thing away from this thread, let it be that.

Now, the next step is education and forming your own opinions based on some light reading. I recommend:

http://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/1118921283/ref=sr_1_1?ie=UTF8&qid=1459795868&sr=8-1&keywords=bogleheads+guide+to+investing

Investing is simple, and proven. By data - all the data of the markets. There are two good investing strategies that are often cited here: 100% VTSAX, or the 3-fund, lazy portfolio that is outlined in the above mentioned book. The lazy portfolio is probably most people's best bet.

https://www.bogleheads.org/wiki/Getting_started

I decided to dump Edward Jones a little over a year ago (I was only 21k invested at the time). Not a great time for the market immediately post-breakup, but I'd have really lost my ass if I was still in that portfolio. After reading the bogleheads forum/wiki for a few good days and that book, I took control of and simplified my portfolio. I ended up paying almost $400 in fees to get out, as well as sales loads (5.75%). I think that in 3.5 years I made about $1,000 (the S&P was up like 26% alone in just one of those years).

I was always smart enough to create my own retirement calculator, and that's what started the alarm bells ringing. With EJ I was going to have enough to retire at 55 with about 1.75 million or so. After reading MMM and cutting expenses/investing the difference, I can now retire at 45 with the same amount. But to take it ever further, because I've successfully learned to live on less, I can now retire at 40 with about 1 million.

Taking control of your finances is worth literally years of your working life. Or in my case, about 40,000 hours of work that I won't have to do.

jh830011

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Re: Edward Jones vs Vanguard
« Reply #16 on: April 04, 2016, 05:14:54 PM »
Like you, my 401K has Vanguard funds.  So does my wife's.  I have transferred most of my non-401K assets to Vanguard for similar reasons (lower returns net of fees, questionable value).  I haven't looked back.  No regrets at all!!  And, Vanguard's transfer process for me was great - the transfer person explained the process, then stayed with it until it was verified and done.  Hats off to them!

Noahjoe

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Re: Edward Jones vs Vanguard
« Reply #17 on: April 05, 2016, 08:02:01 AM »
I'll also say that Vanguard has people on the phone that know their shit. They are very knowledgeable, and are very helpful in answering any questions you have. I screwed up my first IRA contribution and put it in Traditional instead of Roth. The guy on the phone walked through the whole process with me in about 10 minutes to recharacterize the contribution, and then explained how the website worked so I could handle things on my own in the future. I've never had an excruciating wait and always, always get good answers from them.

Vanguard 100%. Combine their support with no bullshit fees and you've got a winner, for sure.

FLBiker

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Re: Edward Jones vs Vanguard
« Reply #18 on: April 05, 2016, 08:16:59 AM »
Good advice here.  Ditch Edward Jones.

I started my investing life with them (I was in high school) because my parents used them.  At the time (into my early twenties) I was investing in a few no load, actively managed index funds (like Fidelity Contrafund and CGM Focus) and some individual stocks (E-Trade, Sterigenix, DBCC).  My experience with EJ is that they never told me anything worthwhile.  The guy tried to talk me out of E-Trade (which was by far my most successful individual stock investment, going from $2K to $7/8K in a year or two) and talked me in (totally unsolicited) to DBCC, which went from $2K to $0.  My one and only total loser.  When I got a bit older and wiser, I moved everything to ScottTrade (to save on trades) and exchanged everything for mutual funds.  A bit later, I moved everything to Vanguard / Fidelity in index funds.  And I haven't looked back.

There is absolutely no investment advice you need that can't be obtained in a couple of hours either here or on Bogleheads.  Set up a 3 index fund portfolio (US stock, INT stock, US bond) in whatever ratios make sense for you and forget about it, other than rebalancing once or twice a year.  Add a little INT bond / REIT if you want to be fancy.  Personally, I'm at 49% US stock, 33% INT stock, 10% Bond, 5% REIT, 3% other (a sector fund and P2P lending, neither of which I particularly recommend).  I'm pretty aggressive, though.

ShoulderThingThatGoesUp

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Re: Edward Jones vs Vanguard
« Reply #19 on: April 05, 2016, 09:11:55 AM »
EJ has an office I could walk to, but Schwab's service is simply excellent and their ETFs are fantastic. If you want an office you can go to, I'd pick Schwab.

aspiringnomad

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Re: Edward Jones vs Vanguard
« Reply #20 on: April 05, 2016, 08:24:17 PM »
EJ has an office I could walk to, but Schwab's service is simply excellent and their ETFs are fantastic. If you want an office you can go to, I'd pick Schwab.

Another vote for Schwab. I use Vanguard for certain accounts, but my taxable and Roth accounts are with Schwab. Their web interface, brick and mortar presence, and (most importantly) many of their ETF expense ratios, are all better than Vanguard. EJ, however, is on the opposite end of the spectrum from Vanguard and Schwab - they're pretty much a scam from what I've heard and read. The new fiduciary rule may cause EJ to reassess their entire business model.