Parents have accounts with Edward Jones. Switch them to Vanguard?

[bpage12]

My parents don't know much about investing and asked me to look at their accounts.  They have $239K in a couple Roths and Traditional IRAs.  I saw their fees for 2018 were almost $2,400 if I added it up correctly.  Is it an easy process to roll these over into Vanguard and make the switch? 

[nereo]

My parents don't know much about investing and asked me to look at their accounts.  They have $239K in a couple Roths and Traditional IRAs.  I saw their fees for 2018 were almost $2,400 if I added it up correctly.  Is it an easy process to roll these over into Vanguard and make the switch?

Edward Jones - Run away! Run Away!

Yes, it is a very easy process to roll over those accounts into Vanguard, provided that your parents are on board.
Call Vanguard and ask them to set up the transfer.  They will draft all the paperwork and execute the transfer, and it will be a non-taxable event. You shuold not need to deal with EJ at all.  Given the amounts in question your parents might need to get a "medallion signature guarantee" on the documents Vanguard generates, which is available at most banks - often free of charge if you are a member.  All this does is guarantee your parents signatures are genuine (must like a notary - but specific for financial transactions).

Just be aware that Vanguard can be on the slow side when doing such transfers and all you'll get is a "transaction pending" during the process. - it's one of the few criticisms I have of VG.

[Dare2Dream]

This is on my goals for 2019 list also.

- talk SO into moving her assets away from EJ

although that might be next years talk depending on how our other talks go.

[jinga nation]

OP: Do it.
The biggest hurdle will be the EJ muppets calling your parents and pouring sweet honey-laden words to prevent the switch. Expect resistance. And delays with the paperwork.

Had a tenant who was a EJ financial advisor. Guess what he invested in for himself?
Vanguard index funds, using a lazy portfolio.

When he pitched to me, told him I'm good. As soon as I mentioned the magic words VG and index funds, he gave me a thumbs up and said we don't need to talk anymore.

[nereo]

This is on my goals for 2019 list also.

- talk SO into moving her assets away from EJ

although that might be next years talk depending on how our other talks go.

What is your SO's attachment specifically to EJ? 

There are a number of other brokerages that offer client guidance without the predatory practices, including VG, Fidelity and Schwab.

[bpage12]

Thanks for the info guys! Very helpful.......My grandparents left them some money and it was with EJ.  It was been a few years already and its just bothering me that they are paying so much in fees.  Hopefully we can make the switch soon.  I appreciate the help and good advice!!

[MustacheAndaHalf]

Also, reach out to Vanguard about the switch: the company gaining your business will want to help you.  EJ will have to be dragged along by having no choice when presented with the appropriate forms by Vanguard.

Can Vanguard hold the mutual funds you have at EJ?  Will it cost more to sell them at Vanguard?  It might be worth selling and transferring, but then you risk being out of the market during the transfer.  And that assumes, as you mentioned, everything is in IRAs (where buying/selling doesn't matter - only withdrawing money from the Roth account.  A transfer is not a withdrawal).

[LifeHappens]

We switched my DH's accounts from EJ to Vanguard and it was fairly painless. Vanguard did all the actual work. Your parents have enough in their accounts that they should get the name and direct contact information of an individual advisor at Vanguard to help them through the whole process.

I will caution that if they have any individual stocks in their accounts, which is likely, they'll have to sell those off when they're transferred to Vanguard. It's not an automatic process, but it's easy to sell them and buy index funds with the proceeds.

[h82goslw]

As nereo and others stated....very easy to make the switch.  And if your parents balk at going to Vanguard, simply just show them the math.

They are currently paying 1% AUM fee....$2400 and probably some other fees that EJ is not legally responsible for disclosing.  Assuming they go with Vanguard Personal Advisor Services (PAS) who will manage their money, that fee is 30 basis points (.3%),  which will cost them $720, a savings of $1680 the first year, and even more in subsequent years as the account value grows.  This is a no brainer....you're making the right call.  Good luck.

[Dare2Dream]

This is on my goals for 2019 list also.

- talk SO into moving her assets away from EJ

although that might be next years talk depending on how our other talks go.

What is your SO's attachment specifically to EJ? 

There are a number of other brokerages that offer client guidance without the predatory practices, including VG, Fidelity and Schwab.

It's just been the norm for 40+ years so it's hard to let go of something that's routine. SO has an aggressive allocation and it's been growing very well over the years so it feels like a great deal.  EJ hides their fees very well so it's hard to tell what you are being charged unless you are paying attention.   SO also has a relative that worked for an EJ agent.

[robartsd]

Had a tenant who was a EJ financial advisor. Guess what he invested in for himself?
Vanguard index funds, using a lazy portfolio.

When he pitched to me, told him I'm good. As soon as I mentioned the magic words VG and index funds, he gave me a thumbs up and said we don't need to talk anymore.

The only value EJ adds is encouraging more people to invest. Sounds like this guy knew it and didn't feel bad collecting the fee to provide that service and was smart enough to move on quickly when that service wasn't required.

[Another Reader]

It's not enough money for Private Client status at Fidelity, but if they need someone to talk to and a local office to visit occasionally, Fidelity is a much better choice.  Equally good index funds and much better personal service and website.  Fidelity won't "lose" their rollover money for six weeks as Vanguard did when I rolled over a 457 account a few years ago.  The customer service staff is consistently better at Fidelity, whether in person or by phone.

[nereo]

It's not enough money for Private Client status at Fidelity, but if they need someone to talk to and a local office to visit occasionally, Fidelity is a much better choice.  Equally good index funds and much better personal service and website.  Fidelity won't "lose" their rollover money for six weeks as Vanguard did when I rolled over a 457 account a few years ago.  The customer service staff is consistently better at Fidelity, whether in person or by phone.

Curious, what's the cap for private client status at Fidelity?

[Another Reader]

Minimum is $1M IIRC.

[Indexer]

Read this:   https://forum.mrmoneymustache.com/investor-alley/leaving-ej/


I'll agree with others that you should call Vanguard. The transfer will likely be electronic and the last time I did a transfer they prefilled everything so all I had to do was hit a submit button on the website.


Fidelity(or any major financial institution) VS Vanguard:  One has a profit motive and the other operates at cost. One answers to it's private owners and one answers to it's customer owners(Vanguard is client owned).

I trust Vanguard. I can't say that of any other financial institution. If it was my parents, I would trust Vanguard to help them make good decisions, as opposed to trying to sell them crap like EJ.

[bpage12]

Thanks everyone....you have been so helpful. I just read the thread about a previous couple moving from EJ to vanguard and it answered a lot of my questions! Thanks so much for taking the time to help!!

[Livingthedream55]

OP: Do it.
The biggest hurdle will be the EJ muppets calling your parents and pouring sweet honey-laden words to prevent the switch. Expect resistance. And delays with the paperwork.

Had a tenant who was a EJ financial advisor. Guess what he invested in for himself?
Vanguard index funds, using a lazy portfolio.

When he pitched to me, told him I'm good. As soon as I mentioned the magic words VG and index funds, he gave me a thumbs up and said we don't need to talk anymore.

This - the EJ people will not go away quietly. Perhaps your parents can practice a one sentence rebuttal that they can practice the "broken record technique with" such as : "thanks for your input, but our decision is final."   Good luck!

[BeanCounter]

have to jump in, not that it will help too much but-
RUN AWAY FROM EJ!!!!!!
My mother was a high wealth individual. After her cancer diagnosis she and I agreed to move all over her assets to Fidelity where my assets are. That way it would be easier for me to manage.
Well at least I thought it was all of her assets. Turns out a door to door EJ got ahold of her and convinced her to invest some money with him. In a bunch of individual stocks and bonds. He ended up with about 10% of her total net worth.
When she died all I had to do is drop the death certificate off at Fidelity and they moved everything for me in less than 24 hours. No fees or work for me to do to get it settled.
EJ was a completely different story. Advisor kept demanding to meet with me. I finally agreed to a phone chat so he could get my EJ accounts set up to move them over to. It took two months for them to get the paperwork to me and the first batch had incorrect account numbers on it. Then they wanted $300.00 to processes a TOD. I balked and started complaining about the fees and this guy started mansplaining me. Telling me that the fees were related to it being in a taxable account. Bullshit. And then finally "your mom would have wanted us to work together". And still no fucking paperwork.
I finally wrote a formal complaint to EJ corporate and told them if the paperwork wasn't processed in two weeks I was filling a complaint with FINRA. It was done in 48 hours with no fees. I closed out my account and moved it over to Fidelity in less than eight.
But that wasn't the end of it. Apparently Mr. EJ advisor never bothered to change the address on my mothers old account. So this year when it was time to do the taxes all of the 1099s were sent to her old house which I had SOLD eight months prior. Thankfully the new owner was kind enough to forward them to me. I honestly think i would have forgotten to ask for them when I was doing her final return.
And to add insult to injury because it took him SO LONG TO FILE THE FUCKING PAPERWORK her account earned over $600.00 in dividends so technically I should have opened an estate and filed a 1041 and a K-1 to myself, etc, etc, etc.
ALL BECAUSE HE COULDN'T PROPERLY COMPLETE PAPERWORK TIMELY.

[aspiringnomad]

I will caution that if they have any individual stocks in their accounts, which is likely, they'll have to sell those off when they're transferred to Vanguard. It's not an automatic process, but it's easy to sell them and buy index funds with the proceeds.

Don't think this is true. As long as the shares are publicly traded and widely available (e.g., not private placements or proprietary mutual funds) then you can do an in-kind transfer with no need to sell or buy anything.

[aspiringnomad]

Oh and to the OP: run, don't walk, away from EJ.

[Car Jack]

Do your parents want to talk with someone?

They can do that at Fidelity without being a Private Client (I'm a private client and find no extra value in having someone specific to talk to).  They can go into a Fidelity office and they'll be more than happy to speak with them.

I'd also consider TDAmeritrade and Schwab.  Both also have B&M offices and will be happy to speak with your parents.  Schwab is known for being able to hold just about anything.  Both of these places will offer a cash bonus for a quarter mil and likely free trades.  Fidelity, likely only free trades.  I moved about $300k from Vanguard to TDA recently and got 60 days of unlimited free trades.  If your parents have stocks at EJ, this will save them tons of fees that Vanguard will charge to unload stocks and non-Vanguard funds.

Note....I now have accounts at TDA, Schwab and Fidelity.  I left Vanguard.  My total fees on $2.4M is under $500 a year, including all ERs.

[LifeHappens]

I will caution that if they have any individual stocks in their accounts, which is likely, they'll have to sell those off when they're transferred to Vanguard. It's not an automatic process, but it's easy to sell them and buy index funds with the proceeds.

Don't think this is true. As long as the shares are publicly traded and widely available (e.g., not private placements or proprietary mutual funds) then you can do an in-kind transfer with no need to sell or buy anything.

You're correct. I didn't explain my initial point as well as I could have.

Since the EJ account likely holds individual stocks, those will be transferred in-kind to Vanguard. If the OP wants to get their parents into only index funds, those individual stocks will have to be sold within the Vanguard account with the proceeds used to buy more index fund shares.

[bpage12]

Thanks again guys for the info.  You have been so helpful.  I have talked to my parents briefly and will talk to them again in a week or two and see if we can get things moving!! Thanks so much!!

[FIREstache]

I looked over someone's EJ brokerage statement that was sold to a senior citizen, which showed very low rates of return, and I looked up the fund information online.  There were sales charges of nearly 6% on the purchases of those shares, and the expense ratio was till over .5%.  Mostly the sales charges alone had eaten up all of the return in the year they had the account.

[aspiringnomad]

I will caution that if they have any individual stocks in their accounts, which is likely, they'll have to sell those off when they're transferred to Vanguard. It's not an automatic process, but it's easy to sell them and buy index funds with the proceeds.

Don't think this is true. As long as the shares are publicly traded and widely available (e.g., not private placements or proprietary mutual funds) then you can do an in-kind transfer with no need to sell or buy anything.

You're correct. I didn't explain my initial point as well as I could have.

Since the EJ account likely holds individual stocks, those will be transferred in-kind to Vanguard. If the OP wants to get their parents into only index funds, those individual stocks will have to be sold within the Vanguard account with the proceeds used to buy more index fund shares.

Gotcha - I definitely misunderstood. Thanks for clarifying.