Fast Eddie Jones strikes again

[athena53]

I tried to post this in a previous thread and the computer ate it because the thread was over 262 days old.

Anyway- I have the grandchildren's 529s at EJ in accounts that can be invested in ETFs. The advisor knows I have my (significant) retirement investments elsewhere but hasn't been pushy about trying to take them over. Monday, however, I got on a Zoom meeting he set up to discuss an investment product. It turned out to be one of those mixes of individual stocks, ETFs and mutual funds determined by some set of high-priced pundits in St. Louis. It's mostly buy and hold. The number featured most prominently was 7.2%, annualized return since 2013, which is when one of the mutual funds in the product started. (Which makes me wonder if that 7.2% is a backtesting of the current mix, not actual returns- but I digress.)

I asked about any fees they raked off- oh, yeah. The 7.2% does not reflect the 1.08% Assets Under Management fee. I asked if he could send me the slides he showed me so I could look into details. He tried and they were blocked. He also didn't know if I'd be able to download values the way I can at Fidelity. (I'm guessing no- not something the typical EJ client wants to bother with. Also guessing that the actual mix at any given time is a Big Secret.)

After the discussion I went back to my Fidelity account data and calculated the annualized IRR from 1/1/2013 to date. It was 9.1%. No brain surgery- mostly a few mutual funds, more in ETFs and some well-chosen individual stocks, pretty much buy-and-hold unless there are compelling reasons to get out of something.

Bullet dodged.

 

[Another Reader]

I tried to post this in a previous thread and the computer ate it because the thread was over 262 days old.

Anyway- I have the grandchildren's 529s at EJ in accounts that can be invested in ETFs. The advisor knows I have my (significant) retirement investments elsewhere but hasn't been pushy about trying to take them over. Monday, however, I got on a Zoom meeting he set up to discuss an investment product. It turned out to be one of those mixes of individual stocks, ETFs and mutual funds determined by some set of high-priced pundits in St. Louis. It's mostly buy and hold. The number featured most prominently was 7.2%, annualized return since 2013, which is when one of the mutual funds in the product started. (Which makes me wonder if that 7.2% is a backtesting of the current mix, not actual returns- but I digress.)

I asked about any fees they raked off- oh, yeah. The 7.2% does not reflect the 1.08% Assets Under Management fee. I asked if he could send me the slides he showed me so I could look into details. He tried and they were blocked. He also didn't know if I'd be able to download values the way I can at Fidelity. (I'm guessing no- not something the typical EJ client wants to bother with. Also guessing that the actual mix at any given time is a Big Secret.)

After the discussion I went back to my Fidelity account data and calculated the annualized IRR from 1/1/2013 to date. It was 9.1%. No brain surgery- mostly a few mutual funds, more in ETFs and some well-chosen individual stocks, pretty much buy-and-hold unless there are compelling reasons to get out of something.

Bullet dodged.

Why put up with any of the EJ nonsense? In your shoes, I would take the hint and move everything to Fidelity.

 

[OldShooter]

Why on earth would you have 529s with Fast Eddie? In our state, we can get a small tax credit regardless of what state 529 plan we are using. DW found a plan that uses VG index funds and that's where we have been. I think you should shop around.

Also, you can bet that there are fees built into this wonderful product that will be in addition to the quoted (and high) 1.08% AUM fee. I tell the students in my Adult-Ed investing class this:

Rule of Thumb: The more complicated an investment product is, the more likely it is that it was designed to make money for the seller, not to make money for you.
​

Edit: Strong odds, too, are that this wonderful product is proprietary to Fast Eddie and cannot be moved to another broker in the event you want to bail.

 

[athena53]

I'm still keeping the 529s in EJ for now- they're ETFs. OTOH, it really does sour me on using them for anything else. I plan to tell the guy that I'm more hands-on (read: financially literate, proactive, detail-oriented) than the usual EJ client and I can do better myself.

 

[Koolau]

Why put up with any of the EJ nonsense? In your shoes, I would take the hint and move everything to Fidelity.

15 years back I actually went to an EJ guy and was impressed - until I joined here. Fortunately, he just seemed a little too slick and my gut told me not to go with him. I think the clincher was that I showed me all these wonderful products, making a lot of money. I asked him "what if they suddenly stop making money" he said "I'll be on top of it and tell you what to switch to." Maybe someone could do that but, if they could, why doesn't he do that with his money and make a fortune with his own money? YMMV

 

[HarveyS]

Why on earth would you have 529s with Fast Eddie?

+100

 

[audreyh1]

Is it not easy to transfer a 529 plan to another brokerage?

 

[athena53]

Is it not easy to transfer a 529 plan to another brokerage?

Sure- but they're ETFs and I'm OK with where they are. They're just never going to get any of my retirement funds to play with.

 

[HarveyS]

OP should certainly do as he/she pleases. Personally, I wouldn't support fast eddie.

So others who may read this thread don't get the wrong idea, according to google, "You can only roll over a 529 to another 529 plan. You can either do this directly, when the funds are delivered directly to a new 529 account, or the money can be disbursed to you as a check, which is known as an indirect rollover. However, you'll need to deposit the funds into a new 529 account within 60 days."

Transferring a 529 to a different custodian is not difficult.

 

[Koolau]

OP should certainly do as he/she pleases. Personally, I wouldn't support fast eddie.

So others who may read this thread don't get the wrong idea, according to google, "You can only roll over a 529 to another 529 plan. You can either do this directly, when the funds are delivered directly to a new 529 account, or the money can be disbursed to you as a check, which is known as an indirect rollover. However, you'll need to deposit the funds into a new 529 account within 60 days."

Transferring a 529 to a different custodian is not difficult.

Does Fast Eddie take a yearly cut? I was thinking they made their money up front. If no continuing fees, why not just let it ride as the "damage" has been done (went through that at Oppenheimer back in the day.) YMMV

 

[TheWizard]

Does Fast Eddie take a yearly cut? I was thinking they made their money up front. If no continuing fees, why not just let it ride as the "damage" has been done (went through that at Oppenheimer back in the day.) YMMV

Fast Eddie also takes a cut whenever you CLOSE an account with them...

 

[MRG]

Does Fast Eddie take a yearly cut? I was thinking they made their money up front. If no continuing fees, why not just let it ride as the "damage" has been done (went through that at Oppenheimer back in the day.) YMMV

Depends but every fund that people say Jones has put them in has a 12-B1 fee so those have a yearly fee. So yeah Eddie gets paid up front, every year, and when you get out. Fast Eddie is always going to be paid.

I worked with a couple guys who were RIFFed and went to work as Fast Eddie salespeople. Both looked good in suits, stuck to the script, and did well. Neither could find their cubes at Megacorp without a map but....

Conversely Megacorp competed with Fast Eddie for programming talent. I had the pleasure of working with some of their programmers and Megacorp managed to hire a few, it was tough. They were well compensated at Jones and did some very challenging work. If you've written MVS subsystems you will understand.

 

[OldShooter]

Not sure ETFs have 12b-1 charges, but Eddie does charge aggressively for trades. For their load funds they also charge the load on every automatic reinvestment. Whether they charge trading fees for ETF div reinvestments I don't know.

 

[tryan]

Little bit funny .... A fast Eddie rep learned I retired while at a BBQ with neighbors. Sooo the next morning he was at my door in a suit ...."just happened to be in the area".

Of course he was pushing me to move my 401k to him .... so I asked about account fees. 5% hit to set up the account .... WOW just WOW. I said "why on earth would I pay THAT" and showed him the door.

 

[MRG]

Not sure ETFs have 12b-1 charges, but Eddie does charge aggressively for trades. For their load funds they also charge the load on every automatic reinvestment. Whether they charge trading fees for ETF div reinvestments I don't know.

+1
12-b1s are a fund thingy, most brokerage systems don't have the ability to that. I think FE has a fee for that.

 

[athena53]

Of course he was pushing me to move my 401k to him .... so I asked about account fees. 5% hit to set up the account .... WOW just WOW. I said "why on earth would I pay THAT" and showed him the door.

Wow. I can't imagine who would do that unless they're unaware of the fee. Yeah, I know I paid a front-end fee on my initial investments in the American Funds I first bought with the 529 contributions (I'm investing only in ETFs now) but at least it was "only" 2% because I own a lot of American Funds.