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How Edward Jones advisors are compensated
Old 10-17-2011, 09:28 PM   #1
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How Edward Jones advisors are compensated

I just came across this .pdf file which explains how Edward Jones advisors are compensated. It includes a 2% fee to buy or sell mutual funds and stocks, front and back end load funds, 12b-1 fees and a diversification travel awards program.

They talk a bit about rewarding their advisors success. I'm quite sure they don't measure success by how good the customer's returns are.

If I had to go with an AUM or commission based fees, I'd with out a doubt go the AUM route. The Edward Jones reward system does not have the best interest of the investors in mind.

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Old 10-18-2011, 07:47 AM   #2
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A previous coworker had an Edward Jones rep., this rep. seemed to go with the "churn" route. After the rep. worked his magic, the coworker doomed himself as well, "well, I think we should sell X and buy Y", and then turn around and chuckle that it cost him hundreds in transaction costs, fees, or thousands in taxes, etc.

So, that said to me, that AUM is meaningless or less directly compensated and "churn" is the order of the day, at EDJ, anyway.

Run, don't walk away, is the lesson I took away.

Yet, they state:

Our fees and commissions should attempt to reinforce
the Edward Jones philosophy of buying investments

and holding them for the long term.
So, that fee structure should just encourage less trading. And, if you can't fight the urge, EDJ laughs all the way to the bank. So, I don't know if it was foolish coworker, or the rep. pushing harder. I blame both. Even DCA is charged 2%.


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It means for every point you make, your level drops. Kinda like you're startin' from the top..." "Society" - Eddie Vedder
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Old 10-18-2011, 09:11 AM   #3
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Can I say how thrilled I am that DHs 401k is with EJones? And American Funds, which aren't in and of themselves bad, but damn those fees are high, especially in a crappy market.

You know those threads where people post their returns? Yeah, I don't do that, but how's this for what I got in the mail on his the other day? YTD -.94% Nice, huh? Now granted, I only have a couple of funds in there, not remotely diversified by itself, but makes you feel good. Not.
“One day your life will flash before your eyes. Make sure it's worth watching.”
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Old 10-18-2011, 11:38 AM   #4
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Helen, Thanks for posting that! DW has a small IRA with them and I've been telling her lets move it and I'll manage it for her. This provides some extra incentive to make that change.
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