Switch to Vanguard from Edward Jones

[trarmstrong]

Hello All,

Last year, I joined with Edward Jones and opened a Roth IRA account. I really didn't know what I was getting into, to say the least, as they have brick and mortar locations everywhere. Regardless, with $1000 up front and $100/month, I have been investing ever since.

Now, having read into mutual funds and further able to understand little details about IRA accounts, I have come under the conclusion that 1. Edward Jones is expensive (American Funds - while returns are good right now there is still a 5.75% upfront charge) and I find my financial advisor more annoying than helpful (commissioned? Sure acts like it).

I've read on many sites (this one included) that Vanguard beats Fidelity for a more "in control" approach and gets rid of the all-in-one financial advisor fit for more flexibility and less-costly rates.

Question 1: How difficult is it to invest within Vanguard as from a basic investment standpoint and a technical one (website, online vs. in-person, etc.)

Question 2: I know I am going to have to pay a $95 (see, more fees) transfer/closing fee to EJ, will I still have to make my annual $40 fee as well (its due in two months - Dec)

Thanks for all tips, answers, suggestions, snide remarks, and anything in-between.

 

[2B]

The sooner you get away from Edward Jones the better. Their reps are generally poorly educated in investing except for how they can get the most in fees from their clients.

Question 1: How difficult is it to invest within Vanguard as from a basic investment standpoint and a technical one (website, online vs. in-person, etc.)

Vanguard is very easy but you will be doing it all through their website or over the phone. I would suggest you get a simple asset allocation and move forward with that. Call Vanguard and they will help you move your account. You can expect Edward Jones to call you a couple of times and drag the transfer out. You should be able to transfer the American funds to Vanguard and keep them in a brokerage account. Personally, I'd convert entirely to Vanguard index funds and move on. Consider your experience with Edward Jones a low cost tuition for getting you on to a better investment path.

You can set up automatic investing with Vanguard. I'm not sure of the minimums for this -- $50?. Talk to them about what you want to do and they will be very helpful.

Question 2: I know I am going to have to pay a $95 (see, more fees) transfer/closing fee to EJ, will I still have to make my annual $40 fee as well (its due in two months - Dec)

It depends on whether you can get out of there fast enough and whether you pay the fee in advance or not. If its at the end of the year, you'll still probably get hit with at least a pro rated fee.

 

[trarmstrong]

Thanks, I also like to add that I have under $3000 invested (how will that work with Vanguards 3k minimum?)

Also, Is it still worth switching right now and have to potentially pay out $135 in fees?

Guess you could say that with the fees and car-salesman tactics I get sick to my stomach every time I see a EJ around town.

Huge lesson learned I suppose.

 

[2B]

Thanks, I also like to add that I have under $3000 invested (how will that work with Vanguards 3k minimum?)

Also, Is it still worth switching right now and have to potentially pay out $135 in fees?

Guess you could say that with the fees and car-salesman tactics I get sick to my stomach every time I see a EJ around town.

Huge lesson learned I suppose.

Call Vanguard but I don't think you will have a problem especially with your monthly investment. Everybody started small.

What you've paid in loads and other fees is cheap tuition. I pissed away many times what you have before I discovered index investing and Vanguard.

Don't delay. Every month you are paying more loads. It won't cost any less six months from now.

 

[Tractor guy]

I'm a long term Vanguard user who also dealt with Edward Jones. My parents had an account with EJ and I dealt with them on my mother's behalf after my father passed away. When my mother passed away a couple of years later, I stayed with EJ just long enough to transfer my inheritance from them to Vanguard. My experience with Vanguard and Edward Jones is that they are very different. Edward Jones operates on the assumption that investing is difficult and that you have to have an "expert" do everything for you. That expert makes his living from fees and commissions that are taken from your investments with them. The fact that they have an office in every strip mall tells me that they are making a lot of money from a lot of people.

In comparison, Vanguard is a "do it yourself" focused organization. They have a few brick and mortar offices but I've never been in one. All of my contact with them has been via snail mail and internet. I've talked to a Vanguard representative maybe 4 times in 20 years.

When I was helping my mother, her EJ representative would call her about every 3 months to set up a face to face meeting to review her status. Usually, he'd suggest that she move some money from one fund to another. When I dug into it, it looked to me like the prime motivator was that he would get a commission on the purchase.

In comparison, I have just received my first e-mail from Vanguard in 5 years suggesting a phone conference to discuss my goals. This was brought on because I was assigned a new representative and she wants to make sure that I'm happy with them. I've declined the invitation.

Buying and selling funds is very different between Vanguard and EJ. With EJ, my mother had to call the broker, talk with him to explain what she wanted to do, listen to him suggest other options (which would increase his commission), and then wait for him to execute her instructions. To buy or sell funds, I log on to Vanguards website and do it. Buying or selling funds from Vanguard is about as difficult technically as buying something from Amazon.

I am a confirmed believer in the advantages of a do it yourself, low cost, approach to investing. I don't think that it is that difficult and am a strong believer that I need to know enough to make good decisions with my retirement money. Unlike an adviser (who makes money no matter what happens), if I make the wrong choices, I'm going to have to live with them. That tends to focus my mind.

If you want to know more, I suggest you join and post questions on the boglehead blog: Bogleheads Investing Advice and Info

They have many posters who have helped people switch to Vanguard and also have an extensive wiki and recommended reading list to learn more about investing.

Good luck!!

 

[trarmstrong]

thanks

Thanks to all who helped with my questions and decision process.

I called and got great customer service from Vanguard. They set me up a Vanguard Target Retirement 2050 Fund which I feel is a well balanced plan to get me started.

Now I must call EJ and cancel my next months contribution (hate how you have to go directly through an advisor instead of the instant gratification of an internet site).

22 days and I can't wait to start investing again.

 

[travelover]

.........Also, Is it still worth switching right now and have to potentially pay out $135 in fees?...........

Best money that you can spend. You will save this much many times over in the coming years by cutting EJ loose. Congratulations on figuring it out so soon.

 

[target2019]

Thanks to all who helped with my questions and decision process.

I called and got great customer service from Vanguard. They set me up a Vanguard Target Retirement 2050 Fund which I feel is a well balanced plan to get me started.

Now I must call EJ and cancel my next months contribution (hate how you have to go directly through an advisor instead of the instant gratification of an internet site).

22 days and I can't wait to start investing again.

You just made a very wise decision. Congratulations.

 

[Redbugdave]

Armstrong...Your path is how many of us started, too. Advisors in any field depend upon ignorance to make their living. The more knowledge you gain, the more independant you will become.

I have been with Vanguard for almost 23 years. And it was all from being informed and guided by an early BellSouth retiree that got a buyout from the breakup of Ma Bell. I don't know where I would have been if I had not seen the light. Just living in the present?

 

[ziggy29]

Now I must call EJ and cancel my next months contribution (hate how you have to go directly through an advisor instead of the instant gratification of an internet site).

Funny how it's always so much easier to sign up for something than it is to cancel it, yes?

 

[Bestwifeever]

You just made a very wise decision. Congratulations.

Yes. And at least you have $ to move; perhaps without EJ to get you started, you might not, so nothing wrong with what's done.

 

[ziggy29]

Yes. And at least you have $ to move; perhaps without EJ to get you started, you might not, so nothing wrong with what's done.

Sounds like something that some of our numerous Ameriprise refugees can relate to....

 

[2B]

Sounds like something that some of our numerous Ameriprise refugees can relate to....

I doubt there are many here that can't relate to moving from a high cost investment firm. Some would probably be able to relate several moves.

 

[mickeyd]

Bailing out of EJ and moving your funds to VG will insure that you keep more of your money and that your EJ guy will have to scrape up another sucker to help pay for his Lexus lease, and rent on that corner office next month.

 

[Trooper]

Just finishing up doing the same you are doing, trarmstrong. I too had my money with a high cost, low advice 'advisor'. It's now all at Vanguard, except for some cash and my 401k.

Bear with the transfer process; it will all be worth it. It cost me more than you--I even chose to pay VA surrender fees just to be done, and I am not looking back.

It is so liberating to be in control again...thankfully a great fund company like Vanguard exists.

 

[Wishing]

I recently made the move from EJ to Vanguard based on the advice from wonderfully knowledgeable folks on this forum. As predicted, EJ made several phone calls and did their level best to drag their feet on the transfer. When I called corporate headquarters, they rushed to get my financial adviser on the phone. I hung up, called corporate again and told them I would have called my FA myself if I wanted to talk to him. I told them to finish liquidating the last few funds and quit the foolishness which they did. It is such a relief to have "escaped" from EJ, and I'm very happy with Vanguard.

 

[Donzo]

Keep us posted on how the transfer goes. I get a kick out of the shenanigans some of the financial offices pull. Almost hard to believe!

 

[rprun54]

My EJ adviser is wonderful

 

[target2019]

My EJ adviser is wonderful

I myself am looking for a wonderful adviser, someone more wonderful than myself.

What makes your adviser wonderful?

I met an EJ guy once. He challenged me to come by and discuss my retirement. He was peddling a stock portfolio of some sort, with emphasis on the dividends. The fixed income would be provided by bonds (he happened to sell them).

Once he realized I had an asset allocation of low expense index funds, and did not have $1M to invest, he just wanted to give me the $50 gift card to a local steak house, and bid adieu.

 

[travelover]

My EJ adviser is wonderful

An EJ adviser will send you a birthday card every single year.

No birthday cards from Vanguard.

 

[ERD50]

...
I met an EJ guy once. ...

Once he realized I had an asset allocation of low expense index funds, and did not have $1M to invest, he just wanted to give me the $50 gift card to a local steak house, and bid adieu.

Sounds pretty wonderful to me!

My EJ adviser is wonderful

I would also be interested in hearing what makes your EJ advisor so wonderful. Maybe I should seek one out, there's one (or more?) nearby? I wonder if they are all wonderful, or if it varies from office to office? If it varies, how would I determine which office would be best for me?

-ERD50

 

[Walt34]

Once he realized I had an asset allocation of low expense index funds, and did not have $1M to invest, he just wanted to give me the $50 gift card to a local steak house, and bid adieu.

How does one get them to give you the $50 gift card? Is that deal off if I call them?

Hey, I'm retired. I have time to listen to a BS spiel for a free dinner. It could become entertaining when I start asking awkward questions.

 

[target2019]

How does one get them to give you the $50 gift card? Is that deal off if I call them?

Hey, I'm retired. I have time to listen to a BS spiel for a free dinner. It could become entertaining when I start asking awkward questions.

The best answer I can come up with is have the zip code and other demographics that these dudes are looking for. I think they purchase your name, age and zip from a mail order list, and then send the invitation. Most of the advisers freely admit that they know most in attendance are moochers. They only need one or two suckers from each dinner to replenish their client list.

I've sat through maybe a dozen or so presentations, and most are group dinners. The EJ one was most memorable. But hold on, I just checked my notes and he was an RJ advisor.

2nd most memorable was an advisor from ML who took me to a steak house where I had a real nice prix fixe. I learned interesting things about his experience. He had been an advisor to bank manager for Wachovia, and also a video store manager! Quite a combination...

I get one or two of these invitations per month, but really have lost my enthusiasm for the "free lunch."

Don't make me tell you about Fran Tarkenton...

 

[travelover]

How does one get them to give you the $50 gift card? Is that deal off if I call them?...........

I wrangled a "free" companion airline ticket from Ameriprise for letting them give me a consultation. Bottom line was I threw it in the trash as it would have cost me more money to use it than to just go buy two regular airline tickets.

 

[Walt34]

The best answer I can come up with is have the zip code and other demographics that these dudes are looking for. I think they purchase your name, age and zip from a mail order list, and then send the invitation.

Now I know what I've been doing wrong. I get junk mail from investing newsletters and the like and I just throw it in the trash unopened. I'll have to ramp up my idle curiosity a bit next time I get one.