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Old 07-02-2012, 02:39 PM   #81
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... The beating of a dead horse is Nords trying to sway OBGYN from his decision -- ...
When I read Nord's post, all I saw was that he was saying there may be some costs there that EJ customers are not aware of. If any EJ customer is aware of the costs, and still wants to use them, that's their business. But on this forum, I see that people are helpful, and I consider it helpful to point out costs that someone might not be aware of.

What they do after that is up to them, but I think it is nice of people to go out of their way to try to open one's eyes.

Now, if an EJ customer says "Yes, I know I'm paying these spreads or this or that cost, but it's worth it for me for x,y,z", then it's hitting a different level. AFAIAC, this discussion is still in the 'information' stage.

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Old 07-02-2012, 05:08 PM   #82
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One more question. Is it possible that there is someone who has spent considerable time on this board, who is nearing a very early retirement, who is not asking any direct questions, who nevertheless does not know 1)that Merrill Lynch or Edw. D. Jones are not discount brokers, 2)that Fidelity, Schwab, and Vanguard are discounters, and 3) that discounters charge less than "full service" brokers?
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Old 07-02-2012, 05:10 PM   #83
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Personally, I don't like EJ or ML mostly for the same reasons others have mentioned (the cost). If you don't want to do it yourself you can certainly get lower cost and better service from discount providers like TD Ameritrade, Fidelity, Schwab, etc.

My only personal experience is with an EJ advisor who had been "helping" my parents (now retired) for years. Shortly after the 2008 market crash, my parents shared their financial information with me to get a second opinion because they were concerned about their financial security. Turns out the EJ guy had them invested in a portfolio of 80% stocks and 20% bonds years into their retirement. There was no discussion in recent years (since they retired), about risk or need for retirement income. As you can imagine they lost a large portion of their investment value and may not see the day when it fully recovers. I called the advisor and asked when the last time he reviewed my parents risk profile and why he had them in such an aggressive asset allocation. He said, "I thought your dad was always an equities guy." WHAT!??!?
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Old 07-02-2012, 06:07 PM   #84
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There are 3 kinds of buckaroos - the ones that learn by asking/listening, the few that learn by observation, and the rest that have to pee on the electric fence to find out for themselves.

As for me, I'm glad to have found a forum with advice from many folks worth listening to.

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heh heh heh - now I'm working on being a grumpy old ER curmudgeon.
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Old 07-02-2012, 06:12 PM   #85
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One more question. Is it possible that there is someone who has spent considerable time on this board, who is nearing a very early retirement, who is not asking any direct questions, who nevertheless does not know 1)that Merrill Lynch or Edw. D. Jones are not discount brokers, 2)that Fidelity, Schwab, and Vanguard are discounters, and 3) that discounters charge less than "full service" brokers?
I think there may be some that don't fully understand what those cost differences are, and how significant those costs can be over a long retirement.

Heck, I guess you can count me among those (for the first part at least). I know that we often talk about 1% management fees, or mutual funds with 1% or higher fees that probably offer nothing over a low-cost index fund, but I actually have no idea what the spreads/costs are in buying individual bonds. I do recall hearing Bob Brinker ask callers who bought bonds "what did your 'advise' have listed?" (I assumed 'advise' was a term for the bond transaction statement?). He seemed very suspicious that these bond buyers were not getting a good deal.

But that's why I make no recc to the poster regarding stay/go with EJ. I only recc that they might want to have a good understanding of those costs. Heck, maybe they are insignificant for the type of transactions being performed, but I'm skeptical of that.

-ERD50
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Old 07-02-2012, 08:16 PM   #86
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When I read Nord's post, all I saw was that he was saying there may be some costs there that EJ customers are not aware of. If any EJ customer is aware of the costs, and still wants to use them, that's their business. But on this forum, I see that people are helpful, and I consider it helpful to point out costs that someone might not be aware of.

What they do after that is up to them, but I think it is nice of people to go out of their way to try to open one's eyes.

Now, if an EJ customer says "Yes, I know I'm paying these spreads or this or that cost, but it's worth it for me for x,y,z", then it's hitting a different level. AFAIAC, this discussion is still in the 'information' stage.

-ERD50
+1

Much of the advice on the forum falls in the grey area classic example pay of the mortgage or not. On the other hand some advice is about as close to black and white, as the mom telling her 4 year old don't touch the hot stove. Avoiding full service brokers, and Ameriprise pretty much are accepted wisdom. As I said in early post, it is entirely possible that using EJ isn't costing all that much money. One of my best friends still uses Amerprise and I have tried everything to open his his eye, inertia keeps many people from making beneficial changes. Certainly it does in my case.
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Old 07-04-2012, 03:39 AM   #87
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Your points are well taken, Nords. I was just answering the OP's question re: ML or EJ, from my experience only.
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OB, you're happy with them because you don't see how much money they're making on the spreads when you buy the munis.

You're also happy with them because they're not making any money from you on trading stocks, annuities, or other expensive products. In fact I would suspect that they've given up on calling you to offer you "special deals".

You're also happy with them because you don't need to ask them for advice very often, and because you have a very straightforward asset allocation.
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Old 07-04-2012, 03:43 AM   #88
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This is correct. I joined this website to learn and share experiences about financial independence / early retirement. And I have learned a lot since joining two years ago.

Re: SWR, I keep adjusting it since I am still working...
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I don't think this is dead horse beating. In another thread, obgyn thanked the forum for making him aware of some info he did not know about (SS rules). Could have been an expensive omission.

I still do not think he is aware of the costs of dealing with EJ. I don't know myself, but as others have said, I suspect there are spreads on those bonds he buys/sells, or other costs that are not outright listed as 'fees'.

From recent posts, I'm still unsure if he's adjusted his WR for his conservative investments - IIRC, we discussed that a 100% fixed brings you down to ~ to 2.8% for a 30 year 95% success.

-ERD50
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Old 07-04-2012, 03:50 AM   #89
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This is correct also. It's one of the reasons why I don't participate in some discussions about choosing Vanguard funds for example. However, my views about funds may change in the future when I have more time to study different investment options.
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(...) OB-Gyn is certainly capable of asking for information when he wants it. And declining suggestions when they do not interest him.

Ha
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Old 07-04-2012, 03:56 AM   #90
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Yes I would like to stay at EJ for my CDs and munis since I am satisfied with the service I get (even if there are hidden costs in the spreads etc). For the record, I have a 401(k) plan with Vanguard (short term / no shares/ money market only) and my primary account is with Bank of America / ML. Trying to keep everyone happy

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Not to over-belabor this, but it wasn't even 'advice' (not sure if you were trying to be that specific though). It's really just 'have you really considered such and such?'.

If he wants to stay with EJ, it's no skin off my back, I won't 'advise' him to change. But he seems like a nice person, and if he is under a mistaken impression about the costs, it's just something he might want to give more thought to. I'm just trying to be helpful by providing info. The choice is his.

Others have helped me with info on this forum, just trying to return the favors.

-ERD50
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Old 07-04-2012, 04:03 AM   #91
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Correct. I am not recommending that anybody switches to EJ; I was just answering the OP's question. I feel that I get a better service from EJ than from BoA / ML, that's all. For the record, my asset allocation is very conservative, as discussed in other threads.

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One more thing: I don't see where OBGYN is recommending that anybody else switch to EJ. Just let him do what he wants to do.
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Old 07-04-2012, 04:08 AM   #92
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Hello ERD50 - please could you kindly let me know how to look at these costs ? Are there comparative studies I could read ? I don't know and I have very little time to investigate since I still work (patient care and volunteer work), not retired yet. Thank you.
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I think there may be some that don't fully understand what those cost differences are, and how significant those costs can be over a long retirement.
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Old 07-04-2012, 09:09 AM   #93
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Hello ERD50 - please could you kindly let me know how to look at these costs ? Are there comparative studies I could read ? I don't know and I have very little time to investigate since I still work (patient care and volunteer work), not retired yet. Thank you.
With funds it is easy - you look at loads and annual fees. CDs would be any transaction costs, plus comparing yield and terms (early redemption, etc). A couple tenths of % would be significant in the long run.

I have never bought individual bonds, so I'm not sure how to go about determining the costs. The impression I got from Bob Brinker's comments on his radio show, was that many brokers essentially charged a 'retail' price (this might be buried in the spread), and that it should be easy to get something closer to a 'wholesale' price with a discount broker. It seemed that many of these people thought the $15 transaction fee (or whatever) was all they were paying, but they were actually paying this other, un-obvious 'markup'.

I'm sure some others who deal in individual bonds can fill us in on the specifics.

-ERD50
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Old 07-07-2012, 08:44 PM   #94
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A closely related thread for your reading pleasure: Bogleheads • View topic - Edward Jones Advisory Solutions account


And while we're at it, this article discusses "The Perils ..." http://bucks.blogs.nytimes.com/2012/...ncial-adviser/
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Old 07-07-2012, 09:55 PM   #95
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I have never bought individual bonds, so I'm not sure how to go about determining the costs. The impression I got from Bob Brinker's comments on his radio show, was that many brokers essentially charged a 'retail' price (this might be buried in the spread), and that it should be easy to get something closer to a 'wholesale' price with a discount broker. It seemed that many of these people thought the $15 transaction fee (or whatever) was all they were paying, but they were actually paying this other, un-obvious 'markup'.

I'm sure some others who deal in individual bonds can fill us in on the specifics.
-ERD50
That is true.........advisors have the latitude to mark up bonds, and that markup is in the price, lowering the YTM. A discount broker like Schwab is generally cheaper for most.
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Old 07-23-2012, 10:09 PM   #96
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Here's a piece on bond mark-ups that helps complete this thread: How expensive are your bonds? - CBS News

Hint: $600,000 is quite a mark-up!
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