$500,000 in No-Risk Savings Account?

[old woman]

My brother and SIL use Edward Jones. I don't get it, what is the benefit? She tells me she withdraws the same amount every month but the account doesn't go down so she is happy, but now it went down. He told me they pay 3% she tells me they don't pay 3%. He keeps asking what I pay and I tell him nothing but he doesn't believe it.
What would Edward Jones charge to manage my money? I don't want to ask them since I am not likely to want to pay anything, just curious.

 

[MRG]

My brother and SIL use Edward Jones. I don't get it, what is the benefit? She tells me she withdraws the same amount every month but the account doesn't go down so she is happy, but now it went down. He told me they pay 3% she tells me they don't pay 3%. He keeps asking what I pay and I tell him nothing but he doesn't believe it.
What would Edward Jones charge to manage my money? I don't want to ask them since I am not likely to want to pay anything, just curious.

Depends normally 1% then they put you in expensive funds that generally underperform basic low cost index funds. If you don't catch on they pitch you a nice variable annuity charging you ~3% in fees annually. Oh yea that annuity sounds real good too see it "returns" x percent every year. Better understand what "return" means, they return the principal.

Best thing to remember about ED Jones is stay away! Those poor downtrodden guys earn six figures a year in commission! That's only a small portion of what they bring in in commissions and fees every year, most gets passed up the chain.

 

[Sunset]

Last yr, I had an Edward Jones fellow stop by my house.
I took as a sign of desperation on their part, trying to drum up business going door to door.

Pretty sad really.... maybe its an office initiation ritual they are forced to do.

 

[ETFs_Rule]

I am amazed at how many people are ignorant of diversification. They think that they have 2 options: Stocks or cash. Ever heard of bonds? Ever heard the phrase "When stocks fall, money runs to the safety of bonds"?

If you can't stomach stock market volatility then you do a mix of stocks and bonds. Ticker symbols VOO and AGG.

The OP also needs to visit this page to test out the failure rates of various stock/bond allocations: https://retirementplans.vanguard.com/VGApp/pe/pubeducation/calculators/RetirementNestEggCalc.jsf
While you're at it, take a look at the failure rate of 100% cash.
https://retirementplans.vanguard.com/VGApp/pe/pubeducation/calculators/RetirementNestEggCalc.jsf

 

[MRG]

Last yr, I had an Edward Jones fellow stop by my house.
I took as a sign of desperation on their part, trying to drum up business going door to door.

Pretty sad really.... maybe its an office initiation ritual they are forced to do.

That's how they all start. After the first year spend on a few weeks to get their license then 6 months of sales training they are throw out to perform. If your not bringing in a six figure commission check after the training, don't worry there's another person that will.

It's all up to them, what a dilemma having ethics(not needed with the suitably standard) or putting food on the table?

 

[O2Bfree]

 

[pb4uski]

^^^^^ Good one!

 

[ETFs_Rule]

With so much to learn on the Internet it's hard to believe that brokers are still in business. I guess if you can't spend 10 minutes to learn that commission-based advisers don't legally work for you and your best interests then you might as well part ways with your money.

 

[samclem]

With so much to learn on the Internet it's hard to believe that brokers are still in business. I guess if you can't spend 10 minutes to learn that commission-based advisers don't legally work for you and your best interests then you might as well part ways with your money.

I'm sympathetic to people who fall into this trap. There's advertising all over the TV, radio, internet suggesting that these advisors are the normal way to get help with this planning, and that these folks can help with a very important (yes) and complex (not really) subject. And, 1% really doesn't sound like much. People are used to seeking and getting professional help with important, complex things, and in other cases (medical, law, accounting, etc) it is generally money well spent.
They have no idea that 1) the amount they are spending is really big. 2) They are perfectly capable of doing it themselves. 3) Many of these advisors are putting their own interests ahead of those of clients, so their investment results (net of investment expenses) will be worse than if they'd done this by themselves. 4) Virtually nobody can predict the market no mater what the EJ rep says), and anyone who could would NOT be selling advice to small-time retail investors, they'd become fabulously rich in a few years by leveraging their own money in the options market.

Who is it logical for these people to believe--all the folks in the commercials with the big offices and glossy brochures, or a few people on the internet and folks they've never heard of who write books on how to do this yourself? The easy and "logical" option is . . . But a few people figure it out and that's a victory we should be happy about.

 

[ETFs_Rule]

Three out of four U.S. investors mistakenly think that financial advisers at brokerage firms are required to put clients’ interests first.

 

[samclem]

Three out of four U.S. investors mistakenly think that financial advisers at brokerage firms are required to put clients’ interests first.

But the ads imply otherwise, and the salient details are put well down into the document. It should be right up front and clear as day: "I will be suggesting investments that maximize the amount our firm earns, they will usually not be investments that will be the very best ones for you. They are only "suitable", which means "not criminally negligent to sell to you." I am a salesman.

 

[ETFs_Rule]

But the ads imply otherwise, and the salient details are put well down into the document. It should be right up front and clear as day: "I will be suggesting investments that maximize the amount our firm earns, they will usually not be investments that will be the very best ones for you. They are only "suitable", which means "not criminally negligent to sell to you." I am a salesman.

Yes. 3 out of 4 fall for the bait.

 

[pb4uski]

Looks like OP is MIA.

 

[braumeister]

He'll probably be back in two years.

 

[aja8888]

He'll probably be back in two years.

Maybe he will be back to work by then.

 

[samclem]

Maybe he will be back to work by then.

He'll probably be back in two years.

Looks like OP is MIA.

Reubenray will probably be fine. The fact that he's come here twice puts him ahead of e majority. The fact that he has questioned his costs/ fees is also a good sign. Taking action can be difficult, and maintaining the status quo is easy and natural. But he knows there's an alternative, and where to get more information from people who are actually doing it for themselves, and who aren't out to enrich themselves at his expense. That puts him ahead of many.
But, if he does nothing, stays with the high priced "advisor",' goes with a "safe" investment that guarantees an annual loss to inflation, etc. then there's still good news: the 1% fee will be less and less.

 

[kcowan]

In Canada, they are enabling legislation that requires client disclosure of how much the firm/salesman is costing them each year. It will be interesting to watch the dance.

 

[Walt34]

In Canada, they are enabling legislation that requires client disclosure of how much the firm/salesman is costing them each year. It will be interesting to watch the [-]dance[/-] squirming, crying, moaning.

fify

 

[Bestwifeever]

I think the OP left his receipt in the ATM machine I used yesterday

 

[NW-Bound]

That's some serious money [-]under the mattress[/-] in a non-interest-paying account. Or perhaps some banks pay 2% and I don't know about?

PS. Oops. My stinkin' I bonds are earning me the same: 0.

 

[O2Bfree]

Looks like Michael got the decimal point in the wrong place again. Lumbergh's gonna freak!

 

[Bestwifeever]

That's some serious money [-]under the mattress[/-] in a non-interest-paying account. Or perhaps some banks pay 2% and I don't know about?

PS. Oops. My stinkin' I bonds are earning me the same: 0.

I know, it was crazy to see it (my balance was in the very low four figures). And only a $200 withdrawal--I hope they are enjoying life! No interest paid on this little bank's checking accounts. Likely that it's a business account or a deposit from a house sale or refi that will soon get moved into other instruments, but I couldn't help but think of this thread.