The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: SeattleCPA on August 23, 2019, 07:36:35 AM
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In a post from today (yesterday?), CPA and blogger Mike Piper shared his own brief experience as an Edward Jones financial adviser:
https://obliviousinvestor.com/working-as-an-advisor-at-edward-jones-ethical-qualms/
Anybody who read this (or willing to read) know if they still operate the same way? It'd be interesting to know if the training still includes new advisers trying to sell individual stocks and bonds using this approach.
TLDR summary: Training included trying to sell individual stocks and bonds via cold calls...
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My mother was literally cold called by a EJ guy going door to door in her neighborhood. He chatted her up and then paid several more visits until he got her to invest some money with him. Thankfully I already had majority of her portfolio at Fidelity. So she was just dumping extra cash with him. He put it all in individual stocks and bought some muni bonds. The portfolio was maybe $100k and did fairly well, but was heavily loaded with fees. When she died I had a heck of a time getting the money out of there. They wanted $300 to process the TOD. The advisor constantly wanted to chat me up. He held the funds hostage insisting that I needed to meet with him to get the paperwork processed. I told the advisor that even if I wanted an advisor, he simply wasn't qualified to manage my portfolio and he was wasting his time. He tried to tell me that "this is what your mother would have wanted, for us to work together".
I eventually complained to EJ corp and threatened to file a complaint with FINRA. That got my hostage money moved in 24 hours and they waived the fee for the TOD.
I believe that this advisor prayed on my mother, a widow, living in a nice neighborhood in a beautiful home. He assumed she had money and needed face time with someone. What he didn't realize was that I had control of most of her assets.
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My mother was literally cold called by a EJ guy going door to door in her neighborhood. He chatted her up and then paid several more visits until he got her to invest some money with him. Thankfully I already had majority of her portfolio at Fidelity. So she was just dumping extra cash with him. He put it all in individual stocks and bought some muni bonds. The portfolio was maybe $100k and did fairly well, but was heavily loaded with fees. When she died I had a heck of a time getting the money out of there. They wanted $300 to process the TOD. The advisor constantly wanted to chat me up. He held the funds hostage insisting that I needed to meet with him to get the paperwork processed. I told the advisor that even if I wanted an advisor, he simply wasn't qualified to manage my portfolio and he was wasting his time. He tried to tell me that "this is what your mother would have wanted, for us to work together".
I eventually complained to EJ corp and threatened to file a complaint with FINRA. That got my hostage money moved in 24 hours and they waived the fee for the TOD.
I believe that this advisor prayed on my mother, a widow, living in a nice neighborhood in a beautiful home. He assumed she had money and needed face time with someone. What he didn't realize was that I had control of most of her assets.
That's terrible! Yikes.
BTW, when did this occur?
Piper's experience was 13 years ago. It's relevant to me that they operated like this 13 years ago. It's even more relevant if they're still operating this way...
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My mother was literally cold called by a EJ guy going door to door in her neighborhood. He chatted her up and then paid several more visits until he got her to invest some money with him. Thankfully I already had majority of her portfolio at Fidelity. So she was just dumping extra cash with him. He put it all in individual stocks and bought some muni bonds. The portfolio was maybe $100k and did fairly well, but was heavily loaded with fees. When she died I had a heck of a time getting the money out of there. They wanted $300 to process the TOD. The advisor constantly wanted to chat me up. He held the funds hostage insisting that I needed to meet with him to get the paperwork processed. I told the advisor that even if I wanted an advisor, he simply wasn't qualified to manage my portfolio and he was wasting his time. He tried to tell me that "this is what your mother would have wanted, for us to work together".
I eventually complained to EJ corp and threatened to file a complaint with FINRA. That got my hostage money moved in 24 hours and they waived the fee for the TOD.
I believe that this advisor prayed on my mother, a widow, living in a nice neighborhood in a beautiful home. He assumed she had money and needed face time with someone. What he didn't realize was that I had control of most of her assets.
That's terrible! Yikes.
BTW, when did this occur?
Piper's experience was 13 years ago. It's relevant to me that they operated like this 13 years ago. It's even more relevant if they're still operating this way...
I'm not really clear when she first became a client. I believe it was in the last ten years. My struggle to get the money out was last year- 2018.
I tell everyone I can that EJ is the lowest of the low as far as investment advisors because their sales tactics and fees are just crazy.
I did some online sleuthing of her advisor and he was minimally trained, no finance or accounting degree. He had had several failed businesses in the area (a bread store for example) before becoming an advisor. He had passed his series 7 and 63.
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Edward Jones has an office on almost every corner in Sun City and Sun City West in Arizona. Draw your own conclusions...
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Edward Jones has an office on almost every corner in Sun City and Sun City West in Arizona. Draw your own conclusions...
Also very prevalent in small towns and the rust belt.
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I have my Roth through Edward Jones. About 10 years ago I got a call from a trainee about buying AT&T shares. I said, "they only have an A rating. Why would I buy them?" He had no idea.
I have never once been asked to buy AT&T shares, or anything else.
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Sort of forgot about this thread... but curiously the next day after I posted question I ran into a Edward Jones rep in my home town. I asked her about this and she said they don't do this any longer (since the fiduciary rules)... though they used to train folks this way... Dial and smile, she called it.
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Smile and dial! Brings back memories.
Not of Edward Jones, though. It was a standard catchphrase for all telemarketers when I telemarketed in the '90s. I bought my house telemarketing phone service but moved on to other jobs. Misspent youth...
Sorry for the derail.
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I worked at Edward Jones for a year right out of college. This article perfectly describes my experience. I worked there 9 years ago. I left when I had some of my own money to invest and I didn't want to invest it in the same products we were recommending to clients...
I know a few people who were there more recently, and they described the fiduciary changes. Instead of recommending individual stocks and loaded mutual funds with an up front 4-5% commissions, they recommend a managed account with 1% to 1.5% annual fees(not counting fund expense ratios). Based on how it was described to me the advisor isn't even the one picking what's in the client's managed account nor are they are one managing it. Someone in home office has constructed a portfolio that they are managing, and advisors are putting clients into that managed portfolio.
If this sounds a lot like a mutual fund of mutual funds I agree, but the clients think they are paying these high fees to have customized advice.
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Our EJ advisor used to focus more on individual stocks back when we were. I don't know if that was a business strategy of his, or if it was just trying to sell us what we (incorrectly) wanted. Individual stocks haven't been part of any of the discussions we've had with him over the last eighteen months.
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Sorry for the old thead revival, but I didn't want to start a new thread.
Me: You might want this for your library ( hands EJ adviser a John Bogle book, forget the exact one)
EJ adviser: Who is this person?
Me: errrr. Founder of the Vanguard Group.
How can someone in the retail financial advising world NOT know who Bogle is, at the least to counter the arguments?
2nd story, same EJ adviser.
Me: I'm paying 0 in federal taxes this year in retirement.
EJ adviser: How?
Me: if your income is less than 78k (Married Filing Jointly) than your capital gains (most of our income) is taxed at 0 %. The rest is taken care of by the MFJ 24k deduction.
EJ adviser: Really? where's that found?
Me: line 11 of the 1040 capital gains worksheet
EJ adviser: Mmmmmm (suspicious disbelief)
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How can someone in the retail financial advising world NOT know who Bogle is, at the least to counter the arguments?
Based on how it was described to me the advisor isn't even the one picking what's in the client's managed account nor are they are one managing it. Someone in home office has constructed a portfolio that they are managing, and advisors are putting clients into that managed portfolio.
If this sounds a lot like a mutual fund of mutual funds I agree, but the clients think they are paying these high fees to have customized advice.
This is why. The "advisor" is a salesman who is just there to get you hooked in on an algorithm-built portfolio.
There was someone on here a couple years ago who was offered a job with EJ, but they had to bring a list of 200 friends and family with them to the table (I assume to add to their cold call database). I don't know if sales commissions are still their primary pay model, but it was as recently as 3 years ago.
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I'm actually hoping that--as part of refinancing--I can dislodge some money out of EJ by taking periodic distributions and putting them toward the mortgage.
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I'm actually hoping that--as part of refinancing--I can dislodge some money out of EJ by taking periodic distributions and putting them toward the mortgage.
Or you could just transfer them to Fidelity or Vanguard and be free.
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There are family politics reasons that make that not possible.
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There are family politics reasons that make that not possible.
So your EJ advisor is a family member?
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It was an account that my wife brought into the relationship.
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How can someone in the retail financial advising world NOT know who Bogle is, at the least to counter the arguments?
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Me: if your income is less than 78k (Married Filing Jointly) than your capital gains (most of our income) is taxed at 0 %. The rest is taken care of by the MFJ 24k deduction.
EJ adviser: Really? where's that found?
Me: line 11 of the 1040 capital gains worksheet
EJ adviser: Mmmmmm (suspicious disbelief)
As I described in my previous post, I worked at EJ right out of college. When we took the General Securities license we had to get at least a 72. When I got a 92 I was told I studied too hard, I could have spent more time knocking on doors. Selling>knowledge at EJ.
Tax efficiency/asset location: never covered at EJ.
Backdoor Roth strategy: was covered, and half way through the explanation it was clear 1/3 of the room didn't fully understand how Roth IRA contributions and withdrawals work. These were people who had already been signing up clients for months.
Impact of cost on investing: nope
How to actually pick a mutual fund, pick a stock, or construct a portfolio: "Sell whatever your mentor is selling."
Tax brackets: nope.
How long term capital gains are taxed: nope
Summary: It was a joke. Learn just enough to pass the licensing exam (which isn't much, it's the exact same exam someone would have to pass to work on a customer service phone line at Fidelity), and then start cold calling. People would say they didn't feel comfortable giving advice yet. "It says Financial Advisor on your business card. People will take you seriously." Basically, fake it until you make it.
If the advisor read one of John Bogle's books he would have either quit the following day or come to terms with selling his soul. One of the best decisions of my life was leaving EJ.
There was someone on here a couple years ago who was offered a job with EJ, but they had to bring a list of 200 friends and family with them to the table (I assume to add to their cold call database). I don't know if sales commissions are still their primary pay model, but it was as recently as 3 years ago.
They didn't do that when I was there, in 09-10. Instead, we were given a piece of paper and we had to go door to door collecting phone numbers and information. Going door to door was the expectation for the first few years working there so it was a good interview/expectation setting process.