Edward Jones and my remorse

[mhk7]

We're 70 and I have always kinda taken care of the retirement money at Vanguard and our state PEPSICO plan but I don't really know much...I just look at what a fund has done in the last 10 years or so and pick the one with the highest rate of return.

I thought I would just let EJ take over and do a better job. I started with them in 6/22/21...we have three different pots with them...2 Traditional IRAs and a pot of already taxed money.

As of this moment we're making 1.98% on one IRA and 2.78% on the other IRA...the cash is making 1.30%.

When we met with our FA, we told the FA how much risk we can handle...one IRA is HIGH risk, one IRA is MEDIUM risk.

The FA has the cash pot split between 12 different funds. Each IRA has 13 fund holdings. Some of the funds don't have very long track records.

A lot of the funds are income funds...we told him we don't need income from this money, we want growth.

I'd like to transfer the money to another institution and buy ETFs.

Am I right to think we're being mishandled? I know the market has been down the last 6 months and that's how long we've been with EJ so maybe I'm expecting too much but my son and brothers are still making 15-18% this year.

What would you do if you were me? Thanks!

 

[disneysteve]

Yes, you are being screwed. That's their business model (and that of many other firms as well).



Get the money out of there ASAP. Put in back in Vanguard and manage it yourself.

 

[Dtail]

Run fast. Low cost index funds at either Fidelity, Vanguard or Schwab and manage it yourself.

 

[aja8888]

Tally up all the fees you are paying on all those MF's. You may have to ask the FA for a fee analysis. He may not give it to you.

Leave and go to Schwab, Vanguard or Fidelity.

 

[Bryan Barnfellow]

Run far and fast. They are blood sucking vultures. But leave the remorse. It's an expensive lesson that many people go through. It will make you a better investor going forward.

Before my FIL died he had his money "managed" at this outfit. At one point as his mental capacities were declining he asked me to take over oversight of his investments. I looked at some of the monthly reports he had lying around. They were selling him out of perfectly good bonds and repurchasing similar ones, but with a new commission. Same with funds with significant loads. Outrageous. With FIL's agreement, I moved everything into Vanguard index funds immediately and would not take the FA's calls.

With VG we were able to double the value of his portfolio before he died.

-BB

 

[mystang52]

If you wait a few weeks before moving your money, you'll be entitled to their free Christmas card. This confirms EJ's reputation. Consider this an expensive learning experience, and move your money out ASAP.

 

[OldShooter]

I agree with the others. Get out. You are lucky, though, that EJ has not swindled you into buying a variable annuity, though they have probably hit you with some load funds.

Investing it pretty easy. Here's what to do:

Go to Schwab, Fidelity, or Vanguard. Schwab and Fido have many local offices; you may wish to invest where you can have face-to-face contact. VG is pretty much all telephone contact but in some cases they can be least expensive. Interview two or more reps to see if they listen to you and you "click" with them. Pick one.

Your rep can help you transfer your accounts; it's a simple form and the receiving company handles everything from their end. No need to talk to fast Eddie again. (If he calls, hang up.) Where possible transfer "in kind" -- getting the actual fund shares. Then you can sort out the mess at leisure. Where a fund can't be transferred, just liquidate it and transfer the proceeds. You haven't been in any of these long enough to have tax issues.

Read and heed:

"The Coffee House Investor" by Bill Schultheis https://www.coffeehouseinvestor.com/ (This is Bill's first book; read it before reading his second one.)

"The Bogleheads Guide to Investing" by Taylor Larimore et al https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0470067365

That's really all there is to it. You can hang out here and ask questions, too.

 

[travelover]

Yes, leave and go with one of the three recommended houses. EJ will probably gouge you with some kind of account closing fees, but it is well worth the cost of ditching them.

Look at Target Year or Balanced Funds. They are index funds that automatically re-balance to follow a set asset stock/bond allocation. The fees are very low and you get the excellent returns of an index fund.

 

[OldShooter]

Just for grins, here are a couple of videos. The second video is particularly significant because its author and destributor is Dr. William Sharpe, Nobel prize winner in finance and Stanford professor.

Distributed from https://web.stanford.edu/~wfsharpe/

 

[MRG]

Running away from fast Eddie is always a smart move.

If you want to sit back and do nothing use Vanguard PAS for 30bps. You'll see market returns, not some nonsense from their poorly performing funds.

 

[GravitySucks]

Market down last 6 months?
The S&P 500 is up 11% since you started with FastEddie.

 

[ExFlyBoy5]

I used to fly with a fella that went off and became a EJ advisor after he retired from the military. I think we were decent friends, enough that I would let him crash at my house and help him move. At one time, I must of offended him by making a comment about the predatory nature of EJ and he has unfriended/blocked me on Facebook. But, other friends have told me that he gets a new Porsche every couple of years. Tells me ALL I need to know about EJs.

 

[athena53]

OK, Flame away, but...

I have my grandchildren's 529s at EJ. They're in American Funds and I pay 2% off the top on new money since I have over $500K total in American Funds across all my accounts (including other brokerages). 2% is not bad amortized over the anticipated holding period (oldest kid is 7). I like American Funds and *I* tell the guy what to invest in when I put in new money. He's seen the statements for the other brokerages (to back up the $500K claim and has not once suggested I move them over to EJ. YTD Annualized IRR on the accounts is 13.5%.

So much depends on the advisor. I agree the OP has a loser and should get out ASAP.

 

[RobbieB]

I had IRA's at Eddie & Merrill. Both were "stock picks" no funds. The one at Merrill did twice as good as the one at Eddie and was half as large.

Needless to say, I only have Merrill now.

 

[Exchme]

OP:
Don't chase the latest hot performer, that leads to tears. Buy the Vanguard Total Market ETF and Vanguard Total Bond ETF. If you like International spice, add a bit of Vanguard Total Market Ex US ETF. These have broad market exposure, super low fees and you can hold them anywhere. But for heavens sake, pick Vanguard, Fidelity or Schwab, not EJ.

The good news is you figured out the problem before too much time or too many fees.

 

[Exchme]

OK, Flame away, but...

I have my grandchildren's 529s at EJ. They're in American Funds and I pay 2% off the top on new money since I have over $500K total in American Funds across all my accounts (including other brokerages). 2% is not bad amortized over the anticipated holding period (oldest kid is 7). I like American Funds and *I* tell the guy what to invest in when I put in new money. He's seen the statements for the other brokerages (to back up the $500K claim and has not once suggested I move them over to EJ. YTD Annualized IRR on the accounts is 13.5%.

So much depends on the advisor. I agree the OP has a loser and should get out ASAP.

Have you gone to Portfolio Visualizer and checked the risk adjusted performance of what you own vs something simple like a Total Market fund + Total bond fund? Over long periods of time, I know which way I'd bet.

 

[mhk7]

I am so appreciative of all of your good advice...I know a lot of it is 'hard earned' and you're giving it to me for free! I have already set up another brokerage account and will transfer money tomorrow. Really, really happy for your advice!

 

[F.I.R.E User]

Are you paying a load fee on those MF? ER?

 

[mhk7]

I haven’t bought any yet…I was thinking of SPY and a Vanguard ETF…

 

[OldShooter]

OK, Flame away, but...

I have my grandchildren's 529s at EJ. They're in American Funds and I pay 2% off the top on new money since I have over $500K total in American Funds across all my accounts (including other brokerages). 2% is not bad amortized over the anticipated holding period (oldest kid is 7). I like American Funds and *I* tell the guy what to invest in when I put in new money. He's seen the statements for the other brokerages (to back up the $500K claim and has not once suggested I move them over to EJ. YTD Annualized IRR on the accounts is 13.5%.

So much depends on the advisor. I agree the OP has a loser and should get out ASAP.

Well, if you're happy that is all that matters.

My advice to students in my adult-ed investing class is to NEVER pay a load. Time doesn't "amortize" the load; it is always there, reducing the total potential investment value by whatever percentage haircut the initial investment was given. There is also no research showing that load funds perform any better than no-load. In fact, it’s the opposite because the ERs of load funds usually include 12b-1 fees, the advisor gift that keeps on giving. Hence my advice to students.

 

[Scratchy]

OK, Flame away, but...

I have my grandchildren's 529s at EJ. They're in American Funds and I pay 2% off the top on new money since I have over $500K total in American Funds across all my accounts (including other brokerages). 2% is not bad amortized over the anticipated holding period (oldest kid is 7). I like American Funds and *I* tell the guy what to invest in when I put in new money. He's seen the statements for the other brokerages (to back up the $500K claim and has not once suggested I move them over to EJ. YTD Annualized IRR on the accounts is 13.5%.

So much depends on the advisor. I agree the OP has a loser and should get out ASAP.

Accepting invitation to flame:
-The effect of the 2% load compounds over time, it does not amortize
-The expense ratio of an American Fund will likely be a multiple of the expense ratio of a passive fund and will provide no proven added value.
-In my opinion, it's not which advisor at EJ that is the problem, it's the fact he is at EJ at all. Which advisor is worse during any particular period at EJ rotates in a probably random fashion.

 

[Dash man]

OK, Flame away, but…
YTD Annualized IRR on the accounts is 13.5%.

My grandkids (ages 4 and 3yo twins) 529 funds (Vanguard funds from the Utah and Pennsylvania state plans) have returned 18.06% and 17.61% so far this year. They’re in the age based Target funds.
Just sayin…

 

[Souschef]

Unfortunately, as bad as EJ is, you have to careful with non AUM types. I had a broker at MS push QDOC annuities in my IRA. Did some research, and found if I was lucky I would get my principal back at age 85.
The other thing they pushed was a fund that was front loaded. I was told I could get the no load fund, but the ER was higher. I ran a quick spreadsheet calculation, and as Old Shooter said, the load will never amortize it self.

 

[Al in Ohio]

The market has not been down the last 6 months. It’s been up 11.5% over that period (S&P 500). Any decent FA would have put you in funds you really wanted making at least 8-9% returns. He’s fleecing you.

 

[mrfeh]

What would you do if you were me? Thanks!

Educate yourself.

https://www.bogleheads.org/wiki/Bogleheads®_investing_start-up_kit