Article: The Executives at Edward Jones Should Feel Humiliated...

[arebelspy]

Joshua Kennon has an interesting look at Edward Jones' Mutual Fund practices.

http://www.joshuakennon.com/executives-edward-jones-feel-humiliated-mutual-fund-practices/

An excerpt:

The combined cut, ignoring the sales load that smaller investors would face, could be as high as 3% to 4% of net worth per year, meaning that the only safe withdrawal rate to survive even a Great Depression for the portfolio owner is 0%.  As in nothing.  Nearly all of the after-tax, after-inflation rewards are being confiscated by this abomination of an arrangement.

(Emphasis original.)

tl;dr: Stay away.

[bluecheeze]

Crazy.

When I was 17 I had saved $4k to open up my Roth IRA.  Not knowing much about investing (other then I should be doing it) I went to Edward Jones and told them I was interested but wanted to read up on any costs they had.  He outlined the commisions but emphasized how well the funds were compared to the DOW over some arbitrary period.  I went home read the prospectus and came back the next day.  He recommeneded I took the fund class that had the 12-1b fees rather then the front or backend load and (due to the minimal reading I had done) I asked if this would not be benefecial for me over the long run.  The guy BLEW UP at me and told me I was not an expert and I needed to be listening to him because this is what he does- makes people money.  It was insane how angry he got because I was simply asking about the fees I would be paying....

So I threw a few profane words back at him and walked out.  I then immediately went to the library and got my hands on any book about investing I could find.  The one that stuck out was "The Boglehead's Guide to Investing".  It was because of that experience I learned that you NEVER trust anyone with your money but yourself and it is your job as a prudent investor to learn the in's and out's of anything you invest in.

Big turning point for a young 17 year old....I still remember that day and how pissed off I was at that dude.  In all honesty I owe much of my success to Edward Jones.........or at least 2-5% compouned over several decades...

[arebelspy]

Hah, terrific story bluecheeze, thanks for sharing.

If someone you're thinking about investing with gets upset at your questions, you probably don't want to be investing with them.

[matchewed]

A former coworker had moved to Edward Jones and then kept circling back to his old job looking for "fresh meat" as we had just been bought out (we were an ESOP company). I was quite vocal about how much of a vulture he was and how much of a terrible idea it would be to listen to the man. He even approached me and I just kept asking him if what he offered could outperform simple index investing considering fees. His only response was that I shouldn't worry about fees and that fees weren't everything. RED FLAG! The guy would keep showing up to company functions with his little coffee mugs filled with Hershey's Kisses. I don't have a great deal of negative feelings towards most people. But I had a big gaping hole where my respect towards that man would have been.