Changes at Edward Jones

[Z3Dreamer]

To comply with DOL rules, EJ is changing accounts and fee structure. I have heard they are dropping mutual funds and going with an AUM fee approach (>1%) with possibly some 2 year credit for existing funds. They will have Guided and Advisory Solutions.

Most really hate EJ and their high fees. Seems like this is jacking them up even more.

Anyone know more?

 

[MooreBonds]

Don't know anything about specifics, but I would expect many customers to leave, since many "advisors" use the line of "But my services don't cost you anything!" (because the rube clients never realize that the MFs they own have fees out the wazoo to compensate the 'advisor', and often lead to subpar performance). Now, however, it will be a hard sell to tell those same people "But my services are worth the extra 1%+ that you pay per year".

Or, perhaps they will try to show how the previous funds the clients were in had expense ratios of 1.5%+, and their "new" arrangement is just 1.2% AUM fee on top of a razor thin 0.05% index fund?

"Hey, we are SAVING you 0.25%! Because Edward Jones cares about you!"

 

[Bestwifeever]

Do you have a source for this?

 

[MRG]

I'd seen this a while ago and there was a thread not too long ago about another advisory company doing same. That's there way around the fiduciary rule.

I have also read the pres elect, didn't like the fiduciary rule, so we will see.

ETA Here's a link to one of many articles saying the same thing:
http://time.com/money/4459130/edward-jones-bans-funds-etfs-in-iras/

 

[Bestwifeever]

I found this WSJ link: Watch Out, Retirement Savers, Your Choices Are Poised to Shrink - WSJ (an ad window opened that I had to close to be able to read it). It sounds like other firms will have to do something similar for retirement accounts (looks like only retirement accounts are affected, not others) but are waiting til they have to, in 2018--it's not that EJ got spanked for concealing fees.

 

[DrRoy]

I am among those who will not pay an advisor, and who chooses low fee investments like ETF's.

 

[MRG]

it's not that EJ got spanked for concealing fees.

This time. They have a long history..........see google

 

[Bestwifeever]

This time. They have a long history..........see google

Oh, I well know (and have laid into DH about it, as he has $50k in a non-retirement account there, but it's his choice, his money--and EJ advisor knows full well that Vanguard has everything else), but in this case, pending legislation isn't aimed solely at EJ but at the whole industry.

 

[Bamaman]

My cousin's son is an Edward Jones financial advisor. He just moved from a nice house to a much nicer house. They take 3 kids everywhere, and seem to seldom stay in town on weekends--unless the university is playing football. I see'em in the east running in a big marathon, Jackson Hole and luxury resorts in Florida. And they spend money like there's no end. But his wife has a good medical sales job.

It's almost like Edward Jones wants their people to be highly visible in the community--like coaching baseball and soccer. Meetings may be taking them to nice places, too.

MegaCorp used to take me to February meetings in Milwaukee.

 

[ls99]

Deleted a reply of mine.

 

[Ready-4-ER-at-14]

Search did not seem to find a more current thread so adding on to yours. I apologize if I missed a newer thread.

Edward Jones seems to be doing unusual things to our accounts.

Edward Jones has now "grandfathered" my iras and other than dividend reinvestments it seems cash generated in the IRA account will have to be send to yet another newly created non grandfathered IRA account to buy stock or bonds. My understanding is if I sell stock in old account, I have to transfer the money to the new account to use it.
It seems any IRA future contributions must also go to the new accounts.

My understanding is there will possibly be a new IRA created in the future if you want to buy a mutual fund or etf. Sounds like the decisions are evolving at the corporate headquarters.

I imagine there are legal reasons why they are doing this but as a consumer it seems they are using this as an excuse for shoving both hands into retirement accounts and grabbing $$. The reason I say this is each new account has an annual fee (may be waived for larger accounts I assume). Also each new account has a termination fee per the contract I saw and signed. Not sure if they consider a total regular IRA conversion to a Roth IRA an account closing. Broker didn't know either. Maybe they will merge old and new accounts some day?

So it seems by a three way split of one account that is blamed on the Feds they could triple annual revenue and triple termination fees when each customer eventually dies.

It made me wonder if the company has cash flow problems or if they might be tweaking cash income flow before selling out to larger brokerage firms. It might be that they expect to be sued by the Feds and are simply preventing money comingling to limit the amount of the judgement to certain moneys.
Above is speculation trying to explain why it seems I can do all the things I used to be able to do re stocks and bonds but not in the original accounts.. It makes no sense to me that they can have a better standard of care to the customer by doing this. It is bewildering to me. Maybe small and larger accounts are being handled differently?

 

[MRG]

I believe what your seeing is Eds way to deal with the fiduciary rule.

Do yourself a favor and run away from fast Eddie.

 

[braumeister]

I believe what your seeing is Eds way to deal with the fiduciary rule.

Do yourself a favor and run away from fast Eddie.

Exactly.

 

[target2019]

Only way to escape Fast Eddie Jones is to CUT AND RUN!

 

[samclem]

I believe what your seeing is Eds way to deal with the fiduciary rule.

Do yourself a favor and run away from fast Eddie.

+4. It's bad enough when you know your retirement funds are being siphoned off. If they make the siphoning even more opaque, that's worse. There's no reason to put up with it.

 

[Blue Collar Guy]

I did a google search of Edward Jones. The founder originally sold bonds. Instead of going door to door, they gave him a single property. The Woolworth Building in Manhattan . At one time it was the tallest building in the world, and once served as the headquarters of the mighty five and dime organization. My pension office was located in this grand old building, the elevators were magnificent, brass & mahogany, you get the picture. Shame seems now nothing can be left on autopilot. Let me know if Vanguard starts "to turn", then i will need to shop around for another custodian of my small empire.

 

[HadEnuff]

I had a relative who worked for EJ, straight out of college. Most of the training was on sales techniques, not in understanding the various advantages and disadvantages of investment vehicles, and fitting them into a particular individual's circumstances. IOW, the training was all about learning how to gain someone's trust, and then turning the funds over to whatever the corporate bigwigs were pushing.
It was also a bit of a pyramid game, in that he was given a "mentor", who was take him under his wing and advise him. What he really did was push him to bring in more clients so he could take a pull of it.
I wouldn't touch EJ with with someone else's ten foot pole.

 

[6miths]

+4. It's bad enough when you know your retirement funds are being siphoned off. If they make the siphoning even more opaque, that's worse. There's no reason to put up with it.

+5

 

[audreyh1]

Search did not seem to find a more current thread so adding on to yours. I apologize if I missed a newer thread.

Edward Jones seems to be doing unusual things to our accounts.

Edward Jones has now "grandfathered" my iras and other than dividend reinvestments it seems cash generated in the IRA account will have to be send to yet another newly created non grandfathered IRA account to buy stock or bonds. My understanding is if I sell stock in old account, I have to transfer the money to the new account to use it.
It seems any IRA future contributions must also go to the new accounts.

My understanding is there will possibly be a new IRA created in the future if you want to buy a mutual fund or etf. Sounds like the decisions are evolving at the corporate headquarters.

I imagine there are legal reasons why they are doing this but as a consumer it seems they are using this as an excuse for shoving both hands into retirement accounts and grabbing $$. The reason I say this is each new account has an annual fee (may be waived for larger accounts I assume). Also each new account has a termination fee per the contract I saw and signed. Not sure if they consider a total regular IRA conversion to a Roth IRA an account closing. Broker didn't know either. Maybe they will merge old and new accounts some day?

So it seems by a three way split of one account that is blamed on the Feds they could triple annual revenue and triple termination fees when each customer eventually dies.

It made me wonder if the company has cash flow problems or if they might be tweaking cash income flow before selling out to larger brokerage firms. It might be that they expect to be sued by the Feds and are simply preventing money comingling to limit the amount of the judgement to certain moneys.
Above is speculation trying to explain why it seems I can do all the things I used to be able to do re stocks and bonds but not in the original accounts.. It makes no sense to me that they can have a better standard of care to the customer by doing this. It is bewildering to me. Maybe small and larger accounts are being handled differently?

Open an IRA with Vanguard, Schwab or Fidelity and get them to transfer the IRA from Edwards for you. Then you don't have to deal with the Edwards mess any more.

 

[Sunset]

Transfer all your holdings "IN KIND" to some other brokerage like: Vanguard, Schwab, Fidelity, TD-Waterhouse, Scottrade.

Just call up the other brokerage and say you want to transfer and they will make it smooth and easy, and depending upon your balances, some will offer you hundreds of dollars to do the transfer. So you will actually make money doing it.

 

[redduck]

Transfer all your holdings "IN KIND" to some other brokerage like: Vanguard, Schwab, Fidelity, TD-Waterhouse, Scottrade.

Just call up the other brokerage and say you want to transfer and they will make it smooth and easy, and depending upon your balances, some will offer you hundreds of dollars to do the transfer. So you will actually make money doing it.

The problem is that (at least it's the case with my friend who is with Raymond James) he can't transfer all his holdings "IN KIND" because some of the investments are idiosyncratic to Raymond James--therefore Vanguard (for instance) can't accept them. These investments can be cashed out, but what they are worth is not exactly specified--and there's a fee for early termination. Anyhow, it's not quite as simple as it should be, but I think it's still worth the effort and cost to move to Vanguard, Fidelity, etc.

 

[MRG]

The problem is that (at least it's the case with my friend who is with Raymond James) he can't transfer all his holdings "IN KIND" because some of the investments are idiosyncratic to Raymond James--therefore Vanguard (for instance) can't accept them. These investments can be cashed out, but what they are worth is not exactly specified--and there's a fee for early termination. Anyhow, it's not quite as simple as it should be, but I think it's still worth the effort and cost to move to Vanguard, Fidelity, etc.

Right you probably can't transfer anything with a 12b-1 fee or loads as Vanguard's system doesn't do them.

Still I believe you quickly realize that back.

 

[redduck]

I called Vanguard a few weeks ago. They can accept funds with 12b-1 fees and/or loads. It's the investments that Raymond James creates solely for their clients that Vanguard can't accept. (IIRC). That makes leaving much more of a hassle.
note: I just called Vanguard and yes, IR'dC. However, that rep. I talked to a few weeks ago said that Vanguard moves funds with 12b-1 fees and/or loads into that fund's counter-part that does not have those fees. The rep. today said Vanguard just takes in the transferred funds and leaves them exactly as they are.

 

[ERD50]

...
Edward Jones seems to be doing unusual things to our accounts. ...

It makes no sense to me that they can have a better standard of care to the customer by doing this. It is bewildering to me. ...

Why, oh why, after all that, are you not just moving away from EJ? There are far better options, that won't pull this cr@p and won't bewilder you.

It seems so obvious, why try to decipher this? Just move. Or is this one of those "It's not about the nail" things? You just want to tell us about the pain? I am confused.

-ERD50

 

[MRG]

I called Vanguard a few weeks ago. They can accept funds with 12b-1 fees and/or loads. It's the investments that Raymond James creates solely for their clients that Vanguard can't accept. (IIRC). That makes leaving much more of a hassle.
note: I just called Vanguard and yes, IR'dC. However, that rep. I talked to a few weeks ago said that Vanguard moves funds with 12b-1 fees and/or loads into that fund's counter-part that does not have those fees. The rep. today said Vanguard just takes in the transferred funds and leaves them exactly as they are.

That surprised me. When they wrote their transfer system they had no requirement to do that. Huh, I guess it's a nop for them nobody to pay just the ER.