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Researching fees to sell portfolio
Old 08-13-2015, 09:22 AM   #1
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Researching fees to sell portfolio

Does anyone understand this crapola from Edward Jones?

My question is: Liquidate at EJ and move the cash to a MM account at Vanguard, or move the portfolio to Vanguard, then sell and convert to cash?

Cash will be used in purchase of a new home upon our relocation in next few months.

This is a recently inherited brokerage account,low 6 figures, no capital gains issues. Mix of 6 mutual funds and 6 corporate bonds.

Before I ask the broker the direct questions, I thought someone might have insight how to proceed or even how to phrase the questions to the FA.
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Old 08-13-2015, 09:44 AM   #2
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It's hard to imagine why anyone would do business with Edward Jones if they read the fee disclosure in advance.

To answer your question, you've already paid the expense ratios for the funds, the wrap fees, and any front end loads. The only thing left they can hit you with on your exit is back end loads, or commissions they help themselves to for the privilege of getting out of these funds. You should ask your EJ advisor what fees will be associated with liquidating these funds and transferring the account elsewhere.

There may be a possibility that transferring the funds as is into Vanguard could result in lower fees, but my guess is that if the fees are associated with the funds themselves, there is nothing you can do to avoid them. Ask someone at Vanguard to look at the funds and let you know if there is any advantage to transferring the funds as is and then liquidating them.
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Old 08-14-2015, 01:51 AM   #3
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Yeah watch for the back-end load fees. Did they even have a conversation with you about fees when they sold you their high commission crap?

Good move going to Vanguard or to any deep discount brokerage like E Trade. I've been with E Trade for years. Brokers, insurance agents and other nonfiduciaries give the most expensive "free advice" you will ever get.
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Old 08-14-2015, 05:50 AM   #4
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Did they even have a conversation with you about fees when they sold you their high commission crap?
If it was "inherited" then they probably didn't actually purchase the funds or bonds so there wasn't really much of a chance for a conversation with them, IMHO.
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Old 08-14-2015, 07:21 AM   #5
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My question is: Liquidate at EJ and move the cash to a MM account at Vanguard, or move the portfolio to Vanguard, then sell and convert to cash?
Individual bonds are difficult to sell and Vanguard's bond desk may not be interested in these holdings. The mutual funds will sell at the same closing price no matter where the sale takes place. The fee may be higher at EJ, it doesn't hurt to ask how much they will charge.

Best thing to do is probably sell as soon as you can and transfer the cash to Vanguard.
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Old 08-14-2015, 08:18 AM   #6
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What I would suggest is ask your EJ broker to give you a listing for each issue of the value at the end of a day and what the proceeds would be if you sold at that price. the difference is your cost.

Then talk with Vanguard and see what they say. There may be some issues that Vanguard will not accept (or be willing to sell as Michael suggests) so for those your only choice may be to sell and then transfer the proceeds to Vanguard.
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Old 08-14-2015, 09:02 AM   #7
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lol at the 42 page fee disclosure!
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Old 08-14-2015, 09:31 AM   #8
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lol at the 42 page fee disclosure!
isn't it EXTREMELY telling that the document does NOT have a table of contents? They don't want you to know what's in it and they want to make you slog through it.

FWIW, I just exchanged an email with the broker...she said the MF do not have any fees associated with their sale. She did say that the bonds would be put out to bid and the price she would quote me is the price, less a $4.95 handling fee.
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Old 08-14-2015, 10:59 AM   #9
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It sounds like your best bet may be to liquidate the account while at EJ and transfer the cash to Vanguard.

I inherited an IRA a couple years ago that was at EJ. It included MF, stocks, and bonds. Everything was sold at EJ and I transferred the cash to Vanguard. There was a fee for the IRA management that EJ took as well as exorbitant fees for selling the individual stocks and I think a fee to close/move the account. EJ gets you coming and going.

The person at EJ did some interesting things with the IRA as it was to be split several ways. He sold 1 or 2 shares of each stock so they could be split evenly, but he kept making errors and made purchases of the stocks and then cancelled them and then did the sales. I was able to see these transactions in the account through online access. I was so glad to just get it all moved out and away from EJ after being involved in this IRA for 5 years on the behalf of my relative.
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Old 08-14-2015, 11:57 AM   #10
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. She did say that the bonds would be put out to bid and the price she would quote me is the price, less a $4.95 handling fee.
aha, on further reading of the 42 page disclosure, it appears they take a markdown of .75% of the bonds value when selling... in my case, this would be about $2,200. Guess she didn't feel the need to disclose since I asked about a 'fee' and this is called a 'markdown'.

here is the wording of that disclosure:
If you buy a bond from our inventory or sell a bond that we purchase directly from you, we act as a principal. You will see the markup or mark- down, which is included in the price, displayed as a line item in the trade confirmation. The markup may be up to 2% of the dollar amount you buy and the markdown may be up to .75% of the dollar amount you sell. The price is also adjusted to reflect changes in interest rates and market prices that have occurred since we bought the security.
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Old 08-14-2015, 12:05 PM   #11
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It is .75% at worst.... "up to .75%". I would wait and see what the broker comes back with for pricing.

Do the bonds mature anytime soon or that you would otherwise not mind owning? If so, you could either just leave them where they are and let them mature if the fees of keeping an account there are not excessive. Alternatively, you might be able to transfer them in-kind to Vanguard and then wait for them to mature.
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Old 08-14-2015, 01:05 PM   #12
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It is .75% at worst.... "up to .75%". I would wait and see what the broker comes back with for pricing.

Do the bonds mature anytime soon or that you would otherwise not mind owning? If so, you could either just leave them where they are and let them mature if the fees of keeping an account there are not excessive. Alternatively, you might be able to transfer them in-kind to Vanguard and then wait for them to mature.
at worst, yes.. but what I didn't appreciate from the broker was the answer that there are no 'fees' ... this is a fee with another name...
As for the bonds, these are good bonds that should get a good price... since they are after tax accounts, we're going to use the cash to add to the new-home pile.
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Old 08-14-2015, 01:48 PM   #13
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See if Vanguard can sell some or all of these securities. I would not reward EJ. Never reward shysters.
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Old 08-14-2015, 03:15 PM   #14
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Does anyone understand this crapola from Edward Jones?
Yes it's quite clear. It says "Our mission here at E.D.Jones is to make your assets ours."

In regard to your question, I'd take the tickers call VGI and move everything I could immediately. You know Jones' mission statement, avoid doing anything you can with them.
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