Merrill Lynch or Edward Jones??

[Sarah in SC]

Thank you for the response. This is the first mature response to my question that I've received, and I appreciate it!

Confirmation bias (also called confirmatory bias or myside bias) is a tendency of people to favor information that confirms their beliefs.

This is why the OP liked that one answer from 67, because it was favorable to the position they'd already adopted.
Trouble with confirmation bias is that when you so very want to believe something, it is hard to hear anything else as anything but noise.

 

[brewer12345]

These folks take too much pleasure saving pennies, but I never read anything about how much growth they are experiencing.

EJ and all the others don't have access to any special investments that nobody else can get: this stuff is all a commodity. So using ML, EJ, etc. is a significant additional drag on your portfolio (due to their cost) without the addition of anything to offset it in the way of return. If you want to pay up for additional services, have at it. But you will be poorer over time than if you had DIY, without a doubt.

 

[shooter]

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.

 

[Karloff]

One thing to consider: if you have more than $25K in combined Bank Of America checking and/or saving accounts, Merrill Lynch offers 30 (thirty) $0 trades per month. I have a few ETF's in my ML account and have paid literally NOTHING when it comes to fees. That is the only reason why I have an account with them (on top of other accounts with different companies and banks). You can also buy Vanguard funds through them. I love Vanguard like the saver next door, but in SOME instances, ML could be convenient and even free (I'm talking about the transaction costs only, of course). Am I missing something here?

 

[brewer12345]

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.

I am glad you are happy. You might compare your net worth growth to an indexed equivalent with the same asset allocation before you get too happy.

 

[REWahoo]

. Now when I post I'm a heathen without a brain.

The first step to recovery is recognizing the problem.

 

[frayne]

I officially notified my employer of my intent to retire on August 31st (at age 55!). I have been working with both Merrill Lynch and Edward Jones, and both have come up with almost identical plans, both of which are acceptable to me.

How do I choose? Does anyone have any bad or good experiences with either of these firms?

Thanks in advance for any help.

Either company will be glad to take your money, charge you an annual fee, put you into managed funds with loads & high expense ratios and send you pretty print outs showing how well your investments are doing.

Or you could invest for yourself with a company like Vanguard or Fidelity and stick pretty much to no load index funds and beat by one or two percentage points on average what you would have made with EJ or ML. Somebody has to pay for the brick and mortar store and sales force salaries.

I know an EJ employee and yes, he is a good person, has a decent understanding of investing and finance but first and foremost he is a retail salesperson. That is how he earns his money.

My advice is educate yourself and take responsibilty for your financial future. It is not nearly as hard or as difficult as the financial industry would lead yo to believe.

 

[LOL!]

.... I retired at 53 three years ago and our entire retirement is from savings. It has grown over 35% above our monthly draw in those 3-1/2 years. ....

35% is kinda out of context. That could be a bad number or it could be a good number. The 3.5 year return of the S&P500 is about 81%. The 3 year return is 56%. Numbers for a small-cap value index fund are 94% and 65%. Presumably your number comes from a portfolio of stock and bond funds which along with the high fees of Edward Jones would help explain such low performance.

 

[travelover]

Either company will be glad to take your money, charge you an annual fee, put you into managed funds with loads & high expense ratios and send you pretty print outs showing how well your investments are doing.........

And birthday cards. Don't forget about birthday cards.

 

[Nords]

Thank you for the response. This is the first mature response to my question that I've received, and I appreciate it!

Haven't had to say this for a while, but you've earned it:

You have a nice life now.

 

[nvestysly]

... I have been working with both Merrill Lynch and Edward Jones, and both have come up with almost identical plans, both of which are acceptable to me.

How do I choose? Does anyone have any bad or good experiences with either of these firms?

I don't have experience with either one. I do have experience with JP Morgan/Chase and Ameriprise. If ML and EJ is similar to JPM or Ameriprise I would stay away... but that's just my opinion. I'm a do-it-yourself guy. When I am ready for a financial planner it will be the NAPFA (fee-only) type. But be careful - I called one person listed on NAPFA and later found they were an Ameriprise rep - when I spoke to the rep on the phone she insisted she only made money on fees - yeah I know but that's not the kind of fee I was talking about!

...I clearly stated that my net value has grown over 35% in the last 3-1/2 years...

Portions of my portfolio track the Dow - those accounts have grown well over 100% in approximately the last 3-1/2 years depending on which dates I choose to look at. In the past 4 years it's worth nearly the same now as it was then. Those numbers don't tell the real story though - I've been using the dividends to live my life. That makes sense to me although that may not be the right formula for everyone.

 

[ERD50]

Originally Posted by shooter
...I clearly stated that my net value has grown over 35% in the last 3-1/2 years...

35% is kinda out of context. That could be a bad number or it could be a good number. The 3.5 year return of the S&P500 is about 81%. The 3 year return is 56%. Numbers for a small-cap value index fund are 94% and 65%. Presumably your number comes from a portfolio of stock and bond funds which along with the high fees of Edward Jones would help explain such low performance.

And something of a more balanced nature, pssst Wellesley, also available to anyone w/o any help from an FA, returned ~44% and 55% in the 3.5 and 3 year periods.

So depending what those withdrawals were, shooter might be doing poorly. But like the OP, I suspect he will want to believe this is good.

-ERD50

 

[FinanceDude]

Thank you for the response. This is the first mature response to my question that I've received, and I appreciate it!

Ok, let's reframe this..........you posted on a DIY forum, and asked ML or EJ?, and you had people telling you neither? The big question is do you want someone else to take responsibiltiy for your own investments or not? Once that question is answered, the next steps are pretty easy.

 

[Lsbcal]

Thank you for the response. This is the first mature response to my question that I've received, and I appreciate it!

Hi rdjrn, I think you may be falling into the "conformation bias" trap.

Here is a link: Confirmation bias - Wikipedia, the free encyclopedia

The posters here really want to help you. May have been a bit of snarkiness that crept into some posts, but this is the internet.

 

[Sarah in SC]

Confirmation bias (also called confirmatory bias or myside bias) is a tendency of people to favor information that confirms their beliefs.

This is why the OP liked that one answer from 67, because it was favorable to the position they'd already adopted.
Trouble with confirmation bias is that when you so very want to believe something, it is hard to hear anything else as anything but noise.

Hi rdjrn, I think you may be falling into the "conformation bias" trap.

Here is a link: Confirmation bias - Wikipedia, the free encyclopedia

The posters here really want to help you. May have been a bit of snarkiness that crept into some posts, but this is the internet.

Is there an echo in here?

 

[Lsbcal]

Oops, you scooped me Sarah! Sorry, I did not read all the responses before opening my big fat keyboard.

 

[Sarah in SC]

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.

 

[Nords]

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...

 

[uofmbish]

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!

 

[uofmbish]

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.

 

[FinanceDude]

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..........

 

[haha]

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

 

[Animorph]

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.

 

[67walkon]

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?

 

[FinanceDude]

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........