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Old 06-21-2012, 10:27 AM   #41
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Oops, you scooped me Sarah! Sorry, I did not read all the responses before opening my big fat keyboard.
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Old 06-21-2012, 10:32 AM   #42
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Oops, you scooped me Sarah! Sorry, I did not read all the responses before opening my big fat keyboard.
Or...great minds think alike!
But that is my all time fave term from behavioral finance--if our boat hadn't already been named, I wanted to call her Confirmation Bias.
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Old 06-21-2012, 09:37 PM   #43
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Is there an echo in here?
And, look, it combines the concept with snarkiness, too!

If I want a mature response from a poster, I'll go to Bogleheads...
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Old 06-21-2012, 10:19 PM   #44
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I have no experience with ML, just EJ, so I'm not sure how helpful this will be as a reference point.

I've had horrible experiences with EJ. They were who my parents used, so as a teenager they were my introduction to the investing world. It didn't go so well.

My first investment with them resulted in a class action lawsuit . But on the bright side, the few thousand they cost me as a teenager will probably save me hundreds of thousands over the course of my life by pushing me to become a DIY investor.

After a decade of pleading I was finally able to convince my parents to leave EJ as well. They had my parents, who were 63 at the time and working part time as they wound down into retirement, 100% allocated to growth equity funds! How's that for diversification??! For some reason all of those funds had something else in common...a 5% load. Maybe just a coincidence?

Then 2008 happened, and I was finally able to show my parents how poorly EJ was looking out for their interests.

Good luck with your decision, but my vote is also for neither!
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Old 06-21-2012, 10:36 PM   #45
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As I said, saving pennies. I clearly stated that my net value has grown over 35% in the last 3-1/2 years. That is above what we draw monthly to live on. I should also mention that because of the way my draw is done I haven't had to pay any income taxes. That alone pays for my Edward Jones advisory fees. When some of you offer advise I pay heed and listen. Now when I post I'm a heathen without a brain.
Everyone makes their own choices and you seem happy with yours, so good luck and I hope it continues to go well. I'll just add for other readers that unless you have a portfolio worth less than a dollar you'd likely be saving a whole lot more than pennies!

My parent's portfolio with EJ was being churned every 3-5 years, incurring 5% loads each time. When I went through the exercise of seeing how much being with EJ had cost them, I found that they would have had about 40% more after a decade with a simple, low cost, well diversified portfolio. So what you see as pennies, I see as hundreds of thousands of dollars.

Also, the portfolio that I moved my parents into that consists entirely of broad index funds and treasuries is up 67% over the last 3.5 years. It takes about 30 minutes for me to rebalance it each year and make their annual withdrawal to a checking account.
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Old 06-22-2012, 09:27 AM   #46
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I wanted to call her Confirmation Bias.
I think I got slapped once in a bar for saying that to a member of the opposite sex..........
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Old 06-22-2012, 10:44 AM   #47
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One of our most frequent threads is about managed accounts. Here is a new book by Dan Ariely discussing dishonesty, and how it is baked into the cake in many situations by the incentives in place.
Amazon.com: The Honest Truth About Dishonesty: How We Lie to Everyone---Especially Ourselves (9780062183590): Dan Ariely: Books

I think once a person reads this, he will no longer expect to get a fair shake from people who stand between him and his money. If some cost or rake-off or kickback or whatever is possible, it will happen. And it is always possible.

Ha
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Old 06-22-2012, 02:36 PM   #48
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Isn't EJ all independent offices, essentially a franchise operation? Could be decent in some places and bad in others. Of course the fee structure is probably the same for all.
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Old 06-22-2012, 03:09 PM   #49
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I'm now curious about whether some of the more educated and sophisticated diy posters are talking about getting screwed by firms churning accounts and/or putting people into proprietary (expensive) funds. It seems overly obvious, making me think I might be missing something, that if you're putting all or most of the money in a fund, an indexed fund at the lowest cost is the way to go. I think EJ or ML or whoever else is out there would probably be taking advantage of you.

But if you've got a bunch of long term muni bonds that aren't being wildly traded, and some dividend paying stocks that don't get bought or sold unless you say so, and if EJ or ML or whoever waives any annual fees, how do they do screw us? The kind of young EJ guy that handles our office 401k and our stuff for now told me that if I really want to actively trade, I should get an E-trade account because it would be silly to pay EJ the higher commissions they charge. I liked that advice.

Maybe it depends on the person at the EJ or ML or whatever branch you're dealing with. While the young guy we're dealing with for now has taken a couple of half hearted runs at selling us something we don't want, he hasn't been pushy.

Maybe when I'm fully out of the work place, I need to seriously re-evaluate. But at the risk of being called a knucklehead or worse, I haven't seen any major screwing from this particular EJ guy in the 4 or 5 years we've had accounts there. What am I missing?
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Old 06-22-2012, 03:51 PM   #50
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Isn't EJ all independent offices, essentially a franchise operation? Could be decent in some places and bad in others. Of course the fee structure is probably the same for all.
No truly independent, big brother EJ has a heavy hand in telling the reps what products and platforms to use........
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Old 06-22-2012, 04:03 PM   #51
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I'm now curious ...

But if you've got a bunch of long term muni bonds ...

What am I missing?
How do you know if you get a fair price when you buy or sell a bond? The mark-ups and mark-downs on these things are horrendous since they are not that transparent to the retail investor. If the broker skims 5% from you, would you even know it?
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Old 06-25-2012, 01:39 PM   #52
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If you think it's pennies... consider this example presented by the department of labor. The article is talking about fees on 401ks, but it applies more broadly.
A Look At 401(k) Plan Fees
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Why Consider Fees?

In a 401(k) plan, your account balance will determine the amount of retirement income you will receive from the plan. While contributions to your account and the earnings on your investments will increase your retirement income, fees and expenses paid by your plan may substantially reduce the growth in your account. The following example demonstrates how fees and expenses can impact your account.



Assume that you are an employee with 35 years until retirement and a current 401(k) account balance of $25,000. If returns on investments in your account over the next 35 years average 7 percent and fees and expenses reduce your average returns by 0.5 percent, your account balance will grow to $227,000 at retirement, even if there are no further contributions to your account. If fees and expenses are 1.5 percent, however, your account balance will grow to only $163,000. The 1 percent difference in fees and expenses would reduce your account balance at retirement by 28 percent.
So 1% extra in fees costs you 28% over 35 years. That's real, tangible, and significant.
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Old 06-25-2012, 01:46 PM   #53
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If you think it's pennies...
But Rodi, it's still only pennies...6.4 million of them in your example, but still only pennies.
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Old 06-25-2012, 02:12 PM   #54
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That's why I dislike those target date fund of funds. Not only are you paying a management fee to some group to determine which mutual fund to invest in, if you read the prospectus closely, you are also paying the management fees for each individual mutual fund. The annual fees added up came out to about 2.5% a year. Of course, with those fees, they were nice enough to waive the fees to purchase the shares.
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Old 06-25-2012, 02:43 PM   #55
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But Rodi, it's still only pennies...6.4 million of them in your example, but still only pennies.
You're so right!
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Old 06-25-2012, 10:17 PM   #56
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That's why I dislike those target date fund of funds. Not only are you paying a management fee to some group to determine which mutual fund to invest in, if you read the prospectus closely, you are also paying the management fees for each individual mutual fund. The annual fees added up came out to about 2.5% a year. Of course, with those fees, they were nice enough to waive the fees to purchase the shares.
No! Vanguard's TD 2045 charges 0% for the top-level fund, and the underlying fund's ER's average to 0.19%. While I'm sure someone offers an ER of 2.5% to some captive audience, the major companies will be competative with typical ER's.
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Old 06-28-2012, 11:41 AM   #57
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No! Vanguard's TD 2045 charges 0% for the top-level fund, and the underlying fund's ER's average to 0.19%. While I'm sure someone offers an ER of 2.5% to some captive audience, the major companies will be competative with typical ER's.
Unfortunately, those are not options for us and since it is a 401(k), I want to keep my money in there for 55+ withdrawal rather than roll it into a IRA and deal with a 72T.
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Old 06-28-2012, 02:59 PM   #58
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Don't know, LOL, but at least I'm better educated..
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Old 06-28-2012, 10:45 PM   #59
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But if you've got a bunch of long term muni bonds that aren't being wildly traded, and some dividend paying stocks that don't get bought or sold unless you say so, and if EJ or ML or whoever waives any annual fees, how do they do screw us? The kind of young EJ guy that handles our office 401k and our stuff for now told me that if I really want to actively trade, I should get an E-trade account because it would be silly to pay EJ the higher commissions they charge. I liked that advice.

Maybe it depends on the person at the EJ or ML or whatever branch you're dealing with. While the young guy we're dealing with for now has taken a couple of half hearted runs at selling us something we don't want, he hasn't been pushy.

Maybe when I'm fully out of the work place, I need to seriously re-evaluate. But at the risk of being called a knucklehead or worse, I haven't seen any major screwing from this particular EJ guy in the 4 or 5 years we've had accounts there. What am I missing?
You raise a reasonable point. You'll pay a higher commission to buy the dividend stocks, an almost certainly a higher mark up for the bonds. However, if you are not actively trading and don't have money in the hot ML or American Fund of the month, then you probably aren't spending a fortune sticking with EJ or ML. Especially if they are waiving the annual account fees, custodial fees etc etc. More like paying an extra percent or two when you buy or sell but not every year.

On the other hand you are paying for a full service broker and they are suppose to provide you valuable investment advice. If you aren't taking their advice and buying the stuff they recommend aren't you really being a DIY investor?
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Old 06-28-2012, 11:48 PM   #60
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For what's it's worth, I like the quality of service I get at Edward Jones. Others will disagree...
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How do I choose? Does anyone have any bad or good experiences with either of these firms?

Thanks in advance for any help.
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