Author Topic: Preparing to leave Edward Jones  (Read 7245 times)

gsd802

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Preparing to leave Edward Jones
« on: August 20, 2017, 04:18:37 AM »
Hello,

I am 27 and still trying hard to understand investing and what to do vs what not to do. I set myself up 4 years ago with Edward Jones with a ROTH and SIMPLE IRA. I max my ROTH and have 3% match for simple through employer.

So far Jones has gotten me 4% return on investments. I'm not happy with that. Friend of mine uses Vanguard and last year he earned 12% back. I just signed up for Vanguard and am investing $5,000 of my cash into a non retirement savings account, and reinvesting in what I earn with them. I was going to monitor for a few months and then transfer Jones accounts to Vanguard if I'm happy with them.

I decided to do the non retirement account because from what I understand I can pull money out if needed. Currently I have housing through my employer, but I may be changing careers in the next 12 months and will need money for down payment and closing costs.

Am I doing it "right"? Should I invest more with them? I am also thinking about doing a power account with my credit union, which is only .35% interest, but at least I know the money is there.

Thanks

Silverado

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Re: Preparing to leave Edward Jones
« Reply #1 on: August 20, 2017, 08:38:48 AM »
A good place to start is the bogleheads wiki. Simple search will find it. You need an investment policy statement.

A couple months is likely not the right time period. 15 years maybe. And it will show that low cost index funds will beat whatever EJ tries. By a large margin.

max9505672

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Re: Preparing to leave Edward Jones
« Reply #2 on: August 20, 2017, 09:30:17 AM »
Quote from: gsd802 link=topic=78009.msg1666502#msg1666502 datet=1503224317
Hello,

I am 27 and still trying hard to understand investing and what to do vs what not to do. I set myself up 4 years ago with Edward Jones with a ROTH and SIMPLE IRA. I max my ROTH and have 3% match for simple through employer.

I am not so familiar with IRA (Roth or simple) being Canadian. But what I can tell is, if you have employer match, maximize your contribution in order to get the full employer contribution as this is free money. Let's say that if you put 3%, the employer puts 3%, well that's 100% return on your 3% investment right there (+ the return on the total 6% depending on the investment product you chose). But basically, even if the return was 0% or negative, you would still be winning.

The balance of the money you were investing with Edward Jones is what you are going to stop investing with them. You didn't mention the management fees they are charging you and I encourage you to look at them in details, but they most likely are very high (2%+) and are a big part of the reason why there's less money in your pocket. Please read this for more details on this subject :

https://www.mrmoneymustache.com/2011/05/18/how-to-make-money-in-the-stock-market/

Quote from: gsd802 link=topic=78009.msg1666502#msg1666502 datet=1503224317
So far Jones has gotten me 4% return on investments. I'm not happy with that. Friend of mine uses Vanguard and last year he earned 12% back. I just signed up for Vanguard and am investing $5,000 of my cash into a non retirement savings account, and reinvesting in what I earn with them. I was going to monitor for a few months and then transfer Jones accounts to Vanguard if I'm happy with them.

I decided to do the non retirement account because from what I understand I can pull money out if needed. Currently I have housing through my employer, but I may be changing careers in the next 12 months and will need money for down payment and closing costs.

Am I doing it "right"? Should I invest more with them? I am also thinking about doing a power account with my credit union, which is only .35% interest, but at least I know the money is there.

Thanks
First, you have to understand the difference between investment and saving. The philosophy of investments through products like what Vanguard proposes (generally ETF's) is for long term goals / buy and hold philosophy. As you can read in the article I linked earlier, we know that historically the market always goes up in the long run, but can be quite risky in the short term. So if you plan of needing the money you are investing soon, then that's called saving.

I don't know all the products Vanguard offers, but you should not be saving through stock or bonds ETF's. You should save this money in an account with guaranteed return (generally pretty low, but better than nothing). I am sure someone here is going to give good advices on these kind of products since I'm personnaly not in this market. If you also have money you are ready to invest long term and ''forget'' about it, then take a look at ETF's (Vanguard or others) with low MER's.

Also keep in mind that comparing your investment return with your friend is not ideal, because you probably have a very different profile than he has. Yes, 12% vs. 4% is attractive, but what are the products you guys are invested in? What is the goal (investment or saving)? What is the risk? What happens in there's a crisis tomorrow? Is your 4% going to become -10% and his 12% become -30%? Each and every person has is own ''profile'' and asset allocation (AA%). There are many great posts on this subject on the forum.

Also, investing for the long term / buy and hold strategy, you won't have to monitor the return and take any decision based on the short term results. All you are interested to know is, long term, it is going up (around 7%/year historically), that's what you should be aiming at and planning with.

I suggest you do a little more reading before making a move. You are at the right place and don't hesitate to ask questions, but don't stress things out to make a move.

A good place to start is by going through the MMM Classics articles, you'll learn a lot :

http://www.mrmoneymustache.com/category/mmm-classics/

Max

Mighty-Dollar

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Re: Preparing to leave Edward Jones
« Reply #3 on: August 22, 2017, 12:57:46 AM »
So far Jones has gotten me 4% return on investments.
It's about comparing to the benchmarks, not eyeballing it. How did you do versus the benchmarks? And is this a wrap account whereby they're charging you an asset management fees or are they selling you expensive commission based products? With EJ it's gotta be one or the other if not both. Learn how just 1% can throw a wrench in your retirement. https://www.youtube.com/watch?v=tnLiz-h65iI

Mr Mark

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Re: Preparing to leave Edward Jones
« Reply #4 on: August 22, 2017, 01:40:43 AM »
To test your returns (in Edward Jones or any other investment) against other options this free online tool is tremendous.

https://www.portfoliovisualizer.com/backtest-asset-class-allocation

You can select a specific historic period, assign and compare returns from different asset allocations, specify a whole heap of potential options (like VTSAX, bonds, gold, cash, etc), withdraw regular payments, set rebalance timing, etc etc etc.

highly recommended!

It does seem Edward Jones is very good at exploiting ordinary people's financial illiteracy and fear of the stock market to rake in large fees for the company and their franchisees. In my opinion they are evil financial parasites who are knowingly acting in their own best interest.

par·a·site
/ˈperəˌsīt/

noun
plural noun: parasites

an organism that lives in or on another organism (its host) and benefits by deriving nutrients at the host's expense.

•derogatory
a person who habitually relies on or exploits others and gives nothing in return.

synonyms: hanger-on, cadger, leech, passenger; 



Chesleygirl

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Re: Preparing to leave Edward Jones
« Reply #5 on: August 23, 2017, 05:30:37 PM »
You are probably paying a 1.35% AUM fee on the IRA with Edward Jones. If they didnt' inform you about these fees, they should have. The fee can eat away at your earnings.

I had IRAs with Edward Jones and transferred it all to Fidelity. They have low cost index funds and no AUM fee.

gsd802

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Re: Preparing to leave Edward Jones
« Reply #6 on: August 24, 2017, 10:53:38 AM »
Thank you all for the responses. I will definitely read up on everything you have mentioned.

Chelseygirl yes I believe that is the interest rate they are charging me right now, and when I do the simple math, no wonder I'm not getting the gains I thought I would be. I went to Edward Jones because I was thinking hands off would be safer for me but I'm regretting it.

toganet

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Re: Preparing to leave Edward Jones
« Reply #7 on: August 24, 2017, 12:47:57 PM »
Good news is, you're learning from this experience and you are young so you have a lot of time to build a big 'stache :)

Chesleygirl

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Re: Preparing to leave Edward Jones
« Reply #8 on: August 24, 2017, 02:58:08 PM »
It's worse than that. They charge the 1.35 AUM fee on each separate account you have with them. So for example, if you have two IRAs with Edward Jones, there is the AUM fee on the Roth and an AUM fee on the traditional IRA. They also charge a $40 yearly administrative fee on each IRA, so that is $80 per year.  In my case, I had several accounts with EJ so I was paying a lot more than $80 a year.

Get out as fast you can.

With This Herring

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Re: Preparing to leave Edward Jones
« Reply #9 on: August 24, 2017, 04:22:57 PM »
Thank you all for the responses. I will definitely read up on everything you have mentioned.

Chelseygirl yes I believe that is the interest rate they are charging me right now, and when I do the simple math, no wonder I'm not getting the gains I thought I would be. I went to Edward Jones because I was thinking hands off would be safer for me but I'm regretting it.

If you like Vanguard, then call them ASAP and ask them to help you roll your IRAs over to new Vanguard accounts.  Fidelity and Schwab are also good.  Edward Jones robs you blind on many fronts (expense ratios, assets-under-management fees, huge loads, etc.).  Best of luck to you.

Chesleygirl

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Re: Preparing to leave Edward Jones
« Reply #10 on: August 24, 2017, 07:36:09 PM »

If you like Vanguard, then call them ASAP and ask them to help you roll your IRAs over to new Vanguard accounts.  Fidelity and Schwab are also good.  Edward Jones robs you blind on many fronts (expense ratios, assets-under-management fees, huge loads, etc.).  Best of luck to you.

I love, love, love Fidelity. They have low cost index funds like Vanguard has. And much better customer service. With Vanguard, I had problems with my calls being transferred repeatedly, being put on hold, etc. This has never happened when I phone Fidelity.

toganet

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Re: Preparing to leave Edward Jones
« Reply #11 on: August 25, 2017, 06:59:44 AM »

If you like Vanguard, then call them ASAP and ask them to help you roll your IRAs over to new Vanguard accounts.  Fidelity and Schwab are also good.  Edward Jones robs you blind on many fronts (expense ratios, assets-under-management fees, huge loads, etc.).  Best of luck to you.

I love, love, love Fidelity. They have low cost index funds like Vanguard has. And much better customer service. With Vanguard, I had problems with my calls being transferred repeatedly, being put on hold, etc. This has never happened when I phone Fidelity.

+1 this.  I had a SIMPLE IRA at AmeriPrise (employer choice, not mine), which charged outrageous fees.  When I left that job I contacted Fidelity, who explained the options and process for doing an asset transfer from AP to Fidelity.  Once the "waiting period" was over I filled in a web form and Fidelity handled the whole operation.

With This Herring

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Re: Preparing to leave Edward Jones
« Reply #12 on: August 25, 2017, 02:56:37 PM »
I had Vanguard roll two separate company employer plans over to my Vanguard IRAs with no issues.  I have been happy with their customer service, but there have been longer waits near big tax days (April 15th and the quarters).

Chesleygirl

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Re: Preparing to leave Edward Jones
« Reply #13 on: August 25, 2017, 03:45:55 PM »
My financial adviser at Edward Jones, still contacts me wanting me to change my mind. This is after I transferred my accounts to Fidelity. Recently he called my husband to see if he could get my husband to invest with him. Crazy.

talltexan

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Re: Preparing to leave Edward Jones
« Reply #14 on: October 19, 2017, 02:30:47 PM »
Re-bumping this thread because I've started to do my own fact-finding to try to disentangle myself from Edward Jones, and I was approached by a rep from AXA financial. Do the people here have an opinion about this organization?

Another Reader

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Re: Preparing to leave Edward Jones
« Reply #15 on: October 19, 2017, 02:36:07 PM »
Re-bumping this thread because I've started to do my own fact-finding to try to disentangle myself from Edward Jones, and I was approached by a rep from AXA financial. Do the people here have an opinion about this organization?

Insurance salesman looking for a sucker.  Don't waste your time.  Fidelity if you need a little help, Vanguard if you like the model and don't need good customer service.  Schwab is fine as well.

MDM

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Re: Preparing to leave Edward Jones
« Reply #16 on: October 19, 2017, 02:38:03 PM »
Re-bumping this thread because I've started to do my own fact-finding to try to disentangle myself from Edward Jones, and I was approached by a rep from AXA financial. Do the people here have an opinion about this organization?
AXA is primarily an insurance company.  They may be a fine insurance company - I don't know.

One should insurance companies for insurance, not investing.

See also AXA site:bogleheads.org - Google Search.

hadabeardonce

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Re: Preparing to leave Edward Jones
« Reply #17 on: October 19, 2017, 05:01:13 PM »
To test your returns (in Edward Jones or any other investment) against other options this free online tool is tremendous.

https://www.portfoliovisualizer.com/backtest-asset-class-allocation

You can select a specific historic period, assign and compare returns from different asset allocations, specify a whole heap of potential options (like VTSAX, bonds, gold, cash, etc), withdraw regular payments, set rebalance timing, etc etc etc.

highly recommended!

It does seem Edward Jones is very good at exploiting ordinary people's financial illiteracy and fear of the stock market to rake in large fees for the company and their franchisees. In my opinion they are evil financial parasites who are knowingly acting in their own best interest.

par·a·site
/ˈperəˌsīt/

noun
plural noun: parasites

an organism that lives in or on another organism (its host) and benefits by deriving nutrients at the host's expense.

•derogatory
a person who habitually relies on or exploits others and gives nothing in return.

synonyms: hanger-on, cadger, leech, passenger; 

FINRA's fund analyzer only works for single funds, but it will account for fees. It looks like the one you linked to doesn't factor in front loads and expenses.

https://tools.finra.org/fund_analyzer/

TomTX

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Re: Preparing to leave Edward Jones
« Reply #18 on: October 19, 2017, 08:00:28 PM »
Re-bumping this thread because I've started to do my own fact-finding to try to disentangle myself from Edward Jones, and I was approached by a rep from AXA financial. Do the people here have an opinion about this organization?

Choose a different organization.

Indexer

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Re: Preparing to leave Edward Jones
« Reply #19 on: October 19, 2017, 09:42:18 PM »
Re-bumping this thread because I've started to do my own fact-finding to try to disentangle myself from Edward Jones, and I was approached by a rep from AXA financial. Do the people here have an opinion about this organization?

They are similar to Edward Jones in structure, and their advise is probably even worse. Since they are insurance agents they are more likely to sell you an overpriced annuity with 10 year surrender charges. If the AXA rep approached you that means they are prospecting for new clients. Easy rule: Avoid any financial advisor who finds you. The good advisors/investment firms have people coming to them.

Example: Over the past 3 years Vanguard brought in more new assets than all of their competitors... combined... TIMES 8.5!!! Good word of mouth goes a long way.
source: https://www.nytimes.com/2017/04/14/business/mutfund/vanguard-mutual-index-funds-growth.html

It sounds like you like having an advisor to work with. If that helps you make decisions there is nothing wrong with that. Just don't use someone who is going to overcharge you for mediocre advice. Well Vanguard, Fidelity, and Schwab have advisors you can talk to. You could shop all three. That will be far more productive than talking to EJ or AXA.

talltexan

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Re: Preparing to leave Edward Jones
« Reply #20 on: October 20, 2017, 08:33:37 AM »
Thank you guys. Indeed there were several bumps toward insurance (one of them, yes, toward whole life) as part of the initial call.