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Tips/warnings when leaving Eddie Jones?
Old 09-13-2017, 04:41 PM   #1
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Tips/warnings when leaving Eddie Jones?

I have a friend who, I discovered, has fallen into Eddie Jones' clutches. He has "four or five" annuities -- he's not sure. He also has an index fund that probably had a load and definitely has 12b-1 fees. And on and on ...

With my encouragement, he has started reading prospectuses and his monthly statements. He is appalled at the fees he's being charged. One thing he found was a mysterious $422 annual charge that no one told him about. (Not a wrap fee --- something else) So he has decided to get out of there and is considering Schwab or Fido. I said I would help him, as he is neither financially savvy nor very assertive. He has to "work up his courage" to tell his rep he is going to do this.

Normally in a deal like this I would expect that we'd simply fill out an asset transfer order at the receiving broker and that would be that. I am nervous, though, having read stories of large fees to transfer assets, proprietary assets that cannot be transferred, etc. This kind of customer hostility is all new to me.

So ... has anyone pulled out or known someone who has pulled out of Eddie Jones and how did it go? Any tips or warnings? Maybe just fill out the asset transfer order and cross our fingers? Then he wouldn't even have to face the rep.

TIA
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Old 09-13-2017, 04:58 PM   #2
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When I moved funds from one financial institute to another, I called Fidelity and they handled the transfer. I went to their office and my rep set up a conference call and I think I had to answer, "yep, I want to transfer my funds." I did check with my Fidelity rep to see if what I had could be transferred "in kind". I've never had an annuity and only time I had to pay a fee ($75) was for transferring a IRA out of TD Ameritrade.
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Old 09-13-2017, 05:00 PM   #3
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I transferred out of Edward Jones probably 12 years ago. Moved everything to Fidelity and it was Fidelity that initiated the transfer. Didn't even have to say goodbye to the old EJ guy (who was a decent guy and actually taught me about the 72t rule which gave me hope for my early retirement plans first hatched around age 24 ).

I don't recall any fees at EJ but there might have been some kind of account closure fee. Pretty sure I transferred everything in kind and then sold/rearranged once at Fidelity (where commissions were much lower, of course).
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Old 09-13-2017, 05:21 PM   #4
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There usually is an account closure fee which is usually about $75. If he's moving enough money, Fido may reimburse him for it.
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Old 09-13-2017, 05:31 PM   #5
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The annuities could have significant early withdrawal penalties, but are probably worth paying ... unless a penalty drops/disappears in a month or so.
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Old 09-13-2017, 05:32 PM   #6
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Many brokers will reimburse reasonable account closing charges.When I've moved annuities I've done 1035 exchanges, but I was beyond the declining charges. That is something you will need to look at when deciding to do something with the annuities.

My present annuity with fido likely needs to be housed at fido as most of the investment are fido investments. I was sold this annuity back when I was young and dumb (now old and dumb). It was a in my mid 20's and had an AG Edwards broker and bought a hartford annuity. Moving this annuity was easy as it was tied to the insurer more tightly than the broker. It was really a paper product.. I could make investment changes without the broker. So look at the type of annuities, how they are set up and where are they housed. If it is really paper, it is easy to move. The bigger question is if they should be changed and when.... many details to check.
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Old 09-13-2017, 05:45 PM   #7
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I moved an account from EJ when my advisor moved to another firm- I followed the advisor and am still with him. The receiving firm handled it all and if there were transfer fees they weren't anything major. No annuities involved.


Besides, I LIKE EJ- they pay to maintain the Katy Trail and I just bicycled some lovely sections of it earlier this week!
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Old 09-13-2017, 06:07 PM   #8
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Quote:
Originally Posted by LOL! View Post
The annuities could have significant early withdrawal penalties, but are probably worth paying ... unless a penalty drops/disappears in a month or so.
So typically an annuity can't be moved? I had assumed that they were contracts with 3rd party insurance companies. No? I know nothing about annuities.

If they are left at EJ as-is, are there account maintenance fees or other fees in addition to what's inside the annuities? He is so mad about the fees he's being charged that he just wants to cash everything, which may not be wise.
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Old 09-13-2017, 06:08 PM   #9
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Rolled over my Edward d jones managed 401 k without incident
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Old 09-13-2017, 06:47 PM   #10
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So typically an annuity can't be moved? I had assumed that they were contracts with 3rd party insurance companies. No? I know nothing about annuities.

If they are left at EJ as-is, are there account maintenance fees or other fees in addition to what's inside the annuities? He is so mad about the fees he's being charged that he just wants to cash everything, which may not be wise.
I think my fido one is kind of stuck with fido, but is low fee. It is a variable annuity and the investments are tied to fido. The previous one with the hartford was not tied to a broker for the investments. You could have the hartford change the investments. You really need to determine what these are. You are right that an annuity is a contract, but choice of investments in a variable annuity could be limited. I guess I might be able to pull my fido annuity out of fido, but would have to sort out how to manage the investments.
Compare the annuities you have, the surrender costs and the cost transfer to something less expensive. Just selling them will likely have a tax issue too. Fido, Schwab and Vanguard offer low cost annuities.
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Old 09-13-2017, 06:51 PM   #11
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I found Schwab helpful (like splitwdw mentioned Fidelity was good). If your moving funds to their account my experience is they can handle best with you right there in their offices. (Not sure about the annuities thing however.)
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Old 09-14-2017, 09:23 AM   #12
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Escape EJ and other high cost advisors as soon as possible. Those "harmless" fees are eating your lunch and knocking some amazing amounts off your retirement accounts.

Compare Investment Fees

Put in .1, .5 and 1.0 (or higher) and see how much difference it makes. That doesn't count the front end sales loads, 12b-1 fees and back end sales charges.

Anyone who "likes" EJ and similar has some research to do. :-)
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Old 09-14-2017, 09:50 AM   #13
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Your friend may/will qualify for a bonus for opening his account and transferring his assets "in kind" (so not a taxable event).

The bonuses are commonly free trades (so after he transfers "in kind" he can sell and buy for free), plus often a cash bonus.

So ask about a bonus when you first call to open the account(s).
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