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Edward Jones vrs Vanguard
Old 01-23-2021, 10:14 AM   #1
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Edward Jones vrs Vanguard

Hi all, been sitting in a money market for a few years with my retirement fund ( untaxed till I take it out) and am thinking of moving it to either Edward Jones or Vanguard. I am 67 years of age and am already withdrawing $3000 a month from the acct.
With Vanguard I would partner with an advisor .
I believe Edward Jones fees are around 1 1/2 % where Vanguard would be around .45%.
I realize that the market is at all time highs and I think there is uncertainty in the country today.
Any thoughts would be appreciated.
Thank You
The acct has about $900 K in it.
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Old 01-23-2021, 10:24 AM   #2
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Go with Vanguard. EJ will probably try to sell you their loaded funds and do whatever else they can to extract the maximum in fees. The 1-1/2% really adds up over time.

If you're interested and have the fortitude to deal with the money yourself, you can learn a little about managing your own accounts and skip the 0.45% with Vanguard. It's really not too difficult if you're into doing some research online and keeping good notes and records.
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Old 01-23-2021, 10:25 AM   #3
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I would recommend going with Vanguard; as I would prefer that extra (fee) money to go into your pocket.

I suspect that EJ will give you a wonderful speech about how great they are, after all, look how much money they will be making off your account. (Also take a look at the fees in their funds.)

I have to wonder if that huge AUM fee, since it is defacto raising the withdrawal rate from your account, increases your risk of running out of money in this climate of "uncertainty in the country today."
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Old 01-23-2021, 10:27 AM   #4
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Nearly everyone here will tell you that EJ is the very last place to consider.

Search for them in threads here and you'll find loads of discussion regarding them (including at least one funny video).
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Old 01-23-2021, 10:33 AM   #5
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I have 529s at EJ but everything else at other brokerages. Since I have a lot in American Funds, I pay 1.5% up front but given how long I've held those funds (over 15 years) it averages out to something tiny. I get that break on the 529s even though most of my American Funds are at other brokerages.

My issue with EJ is that they're pretty limited on their product offerings. Most of my money is at UBS and I have a Separately Managed muni bond account that did well last year (Lord Abbett manages it and I own the individual bonds), a "sector rotation" of ETFs that had internal rate of return of 23% last year, and some exotic "structured notes". I also really like my advisor (yeah, flame away) because he knows the market and makes good recommendations.

I also have a "sandbox" with Fidelity- I like their research and the ability to buy/sell on-line. UBS and EJ still require phone confirmations.

As with any brokerage, SO much depends on the individual advisor if you have one. Both my EJ advisor and my UBS advisor know what's in the other accounts and do NOT badger me to move the amounts over to them. If they did, they'd be toast.
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Old 01-23-2021, 10:37 AM   #6
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My DW inherited her fathers 401K that was in Edward Jones. We found a local office and the representative help my wife and her brother divide into separate accounts without creating taxable events. So far so good. A year later, the representative moved on to Well Fargo and was replaced with Dan. We endured the sales pitches and bad ideas to sell certain single stocks in the account for a couple years. The higher fees and attempts to generate transactions eventually got me motivated to move to Vanguard.

Returns are better, fees are lower. I wish I would have gone through the hassle to move sooner. Vanguard makes it pretty easy. My wife decided to invest mostly in VTSAX. It is not such a big number as you are doing, but sure happy we moved over.

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Old 01-23-2021, 10:38 AM   #7
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Fast Eddie's reputation is that they gouge their customers in many ways. One is selling expensive annuities, which I know to be a fact from what they did to a financially naive friend of mine. Before I got him out of their clutches he owned "four or five" annuities. At least a couple of them were arranged so that they could not be moved to another firm.

I have read that their reps get only sales training, no investment training at all.

I think your best alternatives are VG, Schwab, and Fidelity. All three have good reputations here and many happy clients. Differences are minor; VG tends to be less personal and the cheapest, Schwab and Fido are similar in most respects with Fido maybe being a little more aggressive in upselling clients to more profitable products than mutual funds. With $900K, if you want more support than VG offers, I would negotiate for a 1% fee. 1.5% is too much for that size portfolio IMO.

Garret Planning Network and napfa.org seem to get positive reviews around here, but I have no personal experience. Both offer financial planning on a fee-for-service basis. For example, a couple of $K to work with you to develop a plan, then offer less expensive reviews periodically. "Fee only" advisors do not get paid commissions, but most offer "wrap fees" like the 1 1/2% that Fast Eddie is pitching.

Most here would advise you to avoid wrap fees (aka AUM/assets under management). One common aphorism is" By the time you have learned enough to select a good advisor, you don't need one any more."
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Old 01-23-2021, 10:39 AM   #8
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Go with Vanguard, if you want to end up with more $$$ in your pocket.

From your $900K account:
At 1.5% EJ will be taking a minimum of $13,500 from you.
While you are taking out $36,000
In total there will be a taking out $49,500 /yr

After a year or so at Vanguard, you may find you don't need an advisor, as perhaps you will be invested in broad funds that just remain constant, then you can not pay for the advisor. At EJ, you pay all the time, even if they just put you in Vanguard funds
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Old 01-23-2021, 10:52 AM   #9
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My mom went with Raymond James and the first thing the guy did was sell her some American funds with 12b-1 fees, which are the load fees the customer pays for the funds' marketing, sales, and other expenses. She was drawn to the funds because they are "American" and she's been on a patriotic bent since 9-11.

Next, the guy tried to sell her his management services at 1.5%/year. It wasn't too hard to talk her out of that because even she could see that while 1.5% doesn't sound like a lot, it came out to $10,000+ per year. So she passed on that, but now her money is being held hostage. When she had to take an RMD in 2019, she was charged nearly $300 to transfer the money and withhold the taxes.

Of course the guy wants to make some money off her, so he calls me every few months wanting me to talk her into selling some of her tech stock because he thinks she's too much into tech and her AA is too risky. I've explained several times that her AA includes funds outside of her account there, and is actually about 50/50. Of course, he'd rake in a nice fee if we let him push a few buttons and exchange some tech for more American funds or something like them. He's a nice fellow with a lovely family, and we usually have a pleasant conversation, and actually I'm more annoyed with my mom for putting her stock accounts there instead of in a Vanguard account where we could take RMDs and make minor adjustments if necessary for free. Seems like such a no-brainer, but mom wasn't interested in the facts.
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Old 01-23-2021, 10:56 AM   #10
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I just popped over to the Vanguard website.

This was taken from there:

" What does advice cost at Vanguard?

Just as we reinvented investing with our low-cost mutual funds, we've reinvented retirement solutionsóby giving you the chance to get customized advice at a low cost.

The annual cost for Vanguard Personal Advisor Services is only 0.30% of your assets we manage. That's just $3 for every $1,000 under management."

This appears to indicate the AUM fee is .3 percent. From where does the .45 percent come?
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Old 01-23-2021, 11:02 AM   #11
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Here's a third alternative:

Spend some time over the next three months reading the information from Humble Dollar. You can do it yourself in very little time. It's not rocket science. Then go with a low fee outfit like Vanguard, Schwab or Fidelity. If you feel you need some human hand holding now and then, Schwab and Fidelity have offices you can visit.

https://humbledollar.com/
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Old 01-23-2021, 11:07 AM   #12
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Kiplinger and Barron's both do annual reviews of brokerages.Their reviews are available online. Vanguard does not participate, and probably with good reason.

You might check those out. Personally I would not recommend Edward Jones.
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Old 01-23-2021, 11:21 AM   #13
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Deleted after reading post #20.
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Old 01-23-2021, 11:26 AM   #14
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It's like deciding whether you should go with a fishing pole or a sledgehammer in order to cook your eggs.

Listen to Chuckanut on this.
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Old 01-23-2021, 11:26 AM   #15
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Skip the advisor fees and go with one of Vanguards balanced funds.
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Old 01-23-2021, 11:30 AM   #16
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Of the two you mentioned, please go with Vanguard. Fidelity and Schwab are also good options. Never, ever, Edward Jones.
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Old 01-23-2021, 11:32 AM   #17
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Two of my sailing friends are EJ brokers, I knew them both before they hung up their shingles. One sold (junk) promo prizes for school fund raising campaigns and company safety programs. She had a 4 year art degree? I had a beer with her about a year after she began with EJ, asked her some general investing/financial planning questions. She spouted routine stuff you could read for free at the library, but couldn’t tell you the underlying whys at all.

The other was a part time sheriffs deputy and army reservist. Both making much less than $40K/year. He had some sort of 2 year degree in law enforcement.

Neither had any applicable credentials. The “advice” they give us all parroted from the EK back rooms, ask good questions and they’re stumped.

An “expert” is often someone who knows little more than you do, case in point above. Fortunately for EJ and many retail brokers there are millions of people, the vast majority, who can’t or don’t want to understand investing, who are easily fooled.

That coupled with high fees would make Vanguard a no-brainer for me if I wanted an advisor.

EJ isn’t the worst though. AmEx advisors are worse, DW worked as an admin (not a broker) there for a little over a year. They outright fleeced customers, she heard the evidence in meetings and water cooler chatter every day. They talked about how naive customers were in very unflattering terms.

Best of luck.
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Old 01-23-2021, 11:38 AM   #18
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I was going to say 'nuff said regarding the above advice but I think it is difficult to say enough bad things about Edward Jones so let me jump on the pile. Only ever had dealings with them while trying to get my mother out of their clutches and the experience was all bad. Some possibly illegal but was just happy to be out and stop the drain - and the pain of knowing what they were selling was bad.
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Old 01-23-2021, 11:44 AM   #19
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Along with EJ, I give "thumbs down" to UBS. DW had her investments there after UBS bought Paine Weber. They did nothing by mess around when all we wanted was a simple transaction. I moved all her stuff to FIDO. I also did an analysis of the funds she had and discovered some with high expense ratios, so I moved her to lower cost funds.
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Old 01-23-2021, 11:51 AM   #20
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OP was advised against Eddie Jones 5 years ago. https://www.early-retirement.org/for...not-81392.html

A few months later had decided on VG and had an advisor then : https://www.early-retirement.org/for...-in-84459.html

Why is this decision being revisited?

Comments in those threads referred to past threads with similar uncertainty and advice that wasn't taken.

Not gonna spend more time on this.
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