Edward Jones and my remorse

[pdxgal]

I live in a city with a population of 14,000. Have 7 EJ offices in town!

Would be fascinating to learn EJ's selection criteria for where to have offices. No doubt some combination of age, HH income, home values, etc.. An office recently opened in my neighborhood too, right next to Trader Joe's. Wouldn't surprise me if there's high correlation between customer base of TJs, Starbucks and EdwardJones.

On a recent outing we drove through a small town about 40 miles east of Portland, population ~2,000. Used to be a blue collar timber town but now there are lots of vacation homes there and I suspect also high earners who work remotely (this was WA state, so no income tax). EdwardJones office on the three block long main street through town. That's gotta say something about the demographics.

Found out he was a prison guard prior to joining EJ.

OMG, that is hilarious! And scary.

A woman friend who's in her 60's sold a home last year and is sitting on the proceeds because financial stuff is both boring and scary to her. The other day she said "Maybe I'll just go into that Edward Jones office and have them help me." From the other room I cried out "No, no, no, no, no!". My reaction was so spontaneous and from the gut that my friend took notice. I explained many of the points folks have made here, and suggested she go to Schwab or Fidelity instead (which both have offices here). Think I managed to talk her down If she mentions EJ again, think I'll print out this thread transcript for her.

 

[SecondCor521]

Thanks to everyone for your advice! They live in Iowa, which offers Vanguard Funds. If EJ won't let me open an Iowa account, I'll do it directly.

There is a tax benefit in Iowa on up to about $6,948 of contributions apparently. It's not much but it's better than a kick in the pants.

It looks like that $6948 goes up by inflation every year, which is probably why it's a weird number.

 

[ExFlyBoy5]

I just checked the EJ locations and there are three of their offices within a 2 mile radius of our house! But there are several 55+ communities around here for them to feed on.

Oh, and the EJ advisors like to cruise the neighborhoods looking for "big trees, long cars, and fat squirrels"

 

[aja8888]

Oh, and the EJ advisors like to cruise the neighborhoods looking for "big trees, long cars, and fat squirrels"

We have all of the above here!

 

[rodi]

To get the state benefit, you must buy plans in your state. If the plan does not offer cheap funds, it's a dilemma.

If your state offers any benefit/tax break.... Mine doesn't. So I have no loyalty to any specific 529 plan. I'm in the Utah (vanguard funds). My dad started the 529's for my sons when they were born - each kid got a seed amount ($5000) He wasn't happy with the performance of the CA based 529 plan so he moved it to the Utah plan. When he died (the boys were still pretty young) we started contributing monthly to the accounts... Now they are in college and spending it down. The plan has target funds as well as total stock funds and other index funds. The ER on the vanguard funds is slightly higher than if it weren't in a 529 plan. I haven't figured out a way around that. But the ERs are still lower than I've seen in other plans.

 

[dtbach]

Oh, and the EJ advisors like to cruise the neighborhoods looking for "big trees, long cars, and fat squirrels"

Yeah, I've had a couple stop by to offer me their services. Generally nice young men with an upbeat personality. I'm sure they will be great salesmen. I chat with them a bit, drop enough hints about my NW to get their mouths salivating, and then bid them goodbye with a small possibility that I might stop by their office. I can imagine what they tell their boss later.


Suppose i could be nice and not waste their time, just tell them to get off the grass and be on their way.

 

[OldShooter]

Yeah, I've had a couple stop by to offer me their services. Generally nice young men with an upbeat personality. I'm sure they will be great salesmen. I chat with them a bit, drop enough hints about my NW to get their mouths salivating, and then bid them goodbye with a small possibility that I might stop by their office. I can imagine what they tell their boss later. ... .

Sounds like a good way to get on a prospecting list and eventually have your name sold to a list broker. Not for me, thanks.

 

[foxfirev5]

Sounds like a good way to get on a prospecting list and eventually have your name sold to a list broker. Not for me, thanks.

Yep. A simple "Go on now - git " worked in a number of situations when I was growing up back in Appalachia.

 

[ExFlyBoy5]

Yeah, I've had a couple stop by to offer me their services. Generally nice young men with an upbeat personality. I'm sure they will be great salesmen. I chat with them a bit, drop enough hints about my NW to get their mouths salivating, and then bid them goodbye with a small possibility that I might stop by their office. I can imagine what they tell their boss later.


Suppose i could be nice and not waste their time, just tell them to get off the grass and be on their way.

The "new guy" in town left a can of black eyed peas and a business card on our porch last new year's eve. He also took several snacks that we leave for the DELIVERY drivers.

edit: Out of curiosity, I looked up the "new guy" and he's been at EJ for about 10 years as well as his wife. The live in a very nice house and just had a building permit issued for a pool. Estimated construction cost: $150,000.

 

[athena53]

More research: Fidelity doesn't offer the Iowa 529 but they have one from Massachusetts that's also open to non-residents and offers a few Fidelity Index funds. That may be the way to go with new money. Even if I bought into the Iowa plan I doubt there would be any tax benefit- the grandchildren live in IA but I don't. So...maybe $8K/year in the MO plan through EJ so I get the MO tax benefit and the rest in Fidelity. This is where 90% of the money that Dad, may he rest in peace, left me, will go over the next 10 years, so it will add up. The rest will go to charity.

 

[SecondCor521]

More research: Fidelity doesn't offer the Iowa 529 but they have one from Massachusetts that's also open to non-residents and offers a few Fidelity Index funds. That may be the way to go with new money. Even if I bought into the Iowa plan I doubt there would be any tax benefit- the grandchildren live in IA but I don't. So...maybe $8K/year in the MO plan through EJ so I get the MO tax benefit and the rest in Fidelity. This is where 90% of the money that Dad, may he rest in peace, left me, will go over the next 10 years, so it will add up. The rest will go to charity.

There probably would be no tax benefit to you if you bought an Iowa 529.

But there probably would be if you gifted money to your Iowa resident children and they used it to open 529s for their kids.

I can imagine several very legitimate reasons why you might not want to do that, so I'll drop it at this point and leave the ball in your court if you want to continue the thread here.

 

[NW-Bound]

I always though the ideal "job" would be to find 20 individuals with $5 million each and be their financial advisor at 1% AUM. Put their money in index funds and answer an occasional call.

Lemme see... $5M x 20 x 0.01% = $1M.

One million dollars! It sounds like a lot less work than my option selling, which did not make me as much. I would make my wife answer the phone too. She has to, if I am going to pay her a salary.

How do I sign up? There's yet no EJ office at my high-country boondock home, whose unincorporated town has almost 3,000 inhabitants, and more if you count the weekenders like myself with a 2nd home, but not claiming permanent residence there in the US Census survey.

The problem I see is that the locals are not well-heeled enough to provide a good customer base, while the weekenders would have their own broker down in the big cities. Oh well.

 

[PatrickA5]

I remember calling Eddie probably 15 years ago. I had some questions on local municipal bonds - but he didn't have any answers. He was REAL friendly until I told him that I wasn't interested in moving our retirement accounts - at which point he more or less hung up on me.

 

[CoolRich59]

… It became apparent very quickly in our conversations that before joining EJ had zero background, experience or education in finance and consumer investment management. Found out he was a prison guard prior to joining EJ.

LOL. My neice married a fellow who worked as an HVAC installer.

A couple of months later my son tells me he’s now an FA with Edward Jones and hitting up all the aunts, uncles and cousins to offer his services. We declined the opportunity.

I just plugged my zip code into the EJ website: 11 advisors within a 5-mile radius.

 

[Chuckanut]

I'm not a big fan of EJ or other advisors for all the reasons mentioned previously.

But..... I recall a relative who used an FA. The FA set things up for her to easily invest in an IRA account automatically every monthly, and held her hand through the 2008 market crash. The FA kept her from panicking and selling near the bottom. Without the FA my relative would have been of those people who in their mid 60's walks out of the SS office wondering "How in the world can I live of this pittance for the rest of my life?"

For some people they are a necessary lesser of two evils. No everybody is a LBYM investing maven like those in this esteemed group. Sad, but true.

 

[travelover]

I'm not a big fan of EJ or other advisors for all the reasons mentioned previously.

But..... I recall a relative who used an FA. The FA set things up for her to easily invest in an IRA account automatically every monthly, and held her hand through the 2008 market crash. The FA kept her from panicking and selling near the bottom. Without the FA my relative would have been of those people who in their mid 60's walks out of the SS office wondering "How in the world can I live of this pittance for the rest of my life?"

For some people they are a necessary lesser of two evils. No everybody is a LBYM investing maven like those in this esteemed group. Sad, but true.

There is absolutely no doubt it can be an honorable "profession". I think it is just such a huge temptation to dip in to someone else's honey pot when they totally trust you and you can make it look like you are their savior when you are at the same time fleecing them. We used to have a regular poster here that was the kind of advisor I'd want, but I have not seen her post in a while.

 

[NW-Bound]

Lemme see... $5M x 20 x 0.01% = $1M.

Hah! Just saw my mistake. Meant to say either 0.01 or 1%, not 0.01%.

I make mistakes like this more and more often. I am getting old.

 

[FloridaJim57]

Close out your IRAs with EJ and go to Vanguard. Put half in Wellesley and other half in Wellington. There you are set for life.

 

[Badger]

Close out your IRAs with EJ and go to Vanguard. Put half in Wellesley and other half in Wellington. There you are set for life.

Whether this is a good idea or not I just hope it is since this is what we have done with our IRAs. So far it has worked out well for us but I have to add that we also have a few individual stocks with TD Ameritrade.
I have not done business with EJ but there is no need to. I had similar bad experience with ML who was trying to convince us to put my wife's 403b in their hands to buy and sell their loaded funds as they pleased. Sadly they were the best of her selection for investing in her 403b. Sounded like churning to me so I had her money placed in a MM account and twice a year had it moved to Vanguard. Fidelity or TRowe Price would have been fine with me too.
I may not be the smartest bear in the woods but I have always managed our investments. It took a couple of years to realize my limitations and rely on the advantages (for me) of a more simplified approach.


Cheers!

 

[athena53]

There probably would be no tax benefit to you if you bought an Iowa 529.

But there probably would be if you gifted money to your Iowa resident children and they used it to open 529s for their kids.

I can imagine several very legitimate reasons why you might not want to do that, so I'll drop it at this point and leave the ball in your court if you want to continue the thread here.

Ooh, that's something to investigate! DS and DDIL are very responsible with money so if I give them $$ to put into a 529 that's where it will go. Those balances may affect their eligibility for needs-based scholarships but I doubt they'll qualify anyway. The max deduction is $3,474 per kid but there are 3 of them.

 

[aja8888]

I'm not a big fan of EJ or other advisors for all the reasons mentioned previously.

But..... I recall a relative who used an FA. The FA set things up for her to easily invest in an IRA account automatically every monthly, and held her hand through the 2008 market crash. The FA kept her from panicking and selling near the bottom. Without the FA my relative would have been of those people who in their mid 60's walks out of the SS office wondering "How in the world can I live of this pittance for the rest of my life?"

For some people they are a necessary lesser of two evils. No everybody is a LBYM investing maven like those in this esteemed group. Sad, but true.

This above is a good story. The guys I hang out with at the ROMEO club and my three golf buddies are all retired. Collectively, ages run from late 60's to mid 80's. Several are multi-millionaires and all are well off enough to not have to worry where the next buck is coming from.

Of the group, only two of us (myself and a guy who is 85 years old) are managing our stash without an FA.

Two guys are with Ameriprise (UGH) and it's a mixed bag with the others.

Two others, however, are with FA's that hold their hand a lot and send then annual detailed market analysis reports which I have read and they are quite well done. These two guys have well into 10+ figures under management.....one was a successful business owner for decades and the other a C suite exec with a large oilfield services firm that sold out years ago and he walked away with part of $5 Billion.

We meet pretty much daily in the mornings for coffee and breakfast as also play some golf and take short distance group trips together. There is very little discussion of three subjects:

1. Politics
2. Religion
3. Money (investments, etc)

Sometimes money talk pops up and that is usually something like who owns Tesla/other stock and is the market going to go up or down, but that kind of talk goes flat very soon.

It appears to me that a large number of successful and probably not so successful people use FA services.

 

[CRLLS]

Holy Cow. Just for fun I checked Fidelity and EJ offices near me (10 miles radius) Fidelity = 2; Edward Jones =81

 

[aja8888]

Holy Cow. Just for fun I checked Fidelity and EJ offices near me (10 miles radius) Fidelity = 2; Edward Jones =81

After the next market meltdown and recession, check again and see how many of those EJ offices are still there.

 

[ExFlyBoy5]

This above is a good story. The guys I hang out with at the ROMEO club and my three golf buddies are all retired. Collectively, ages run from late 60's to mid 80's. Several are multi-millionaires and all are well off enough to not have to worry where the next buck is coming from.

Of the group, only two of us (myself and a guy who is 85 years old) are managing our stash without an FA.

Two guys are with Ameriprise (UGH) and it's a mixed bag with the others.

Two others, however, are with FA's that hold their hand a lot and send then annual detailed market analysis reports which I have read and they are quite well done. These two guys have well into 10+ figures under management.....one was a successful business owner for decades and the other a C suite exec with a large oilfield services firm that sold out years ago and he walked away with part of $5 Billion.

We meet pretty much daily in the mornings for coffee and breakfast as also play some golf and take short distance group trips together. There is very little discussion of three subjects:

1. Politics
2. Religion
3. Money (investments, etc)

Sometimes money talk pops up and that is usually something like who owns Tesla/other stock and is the market going to go up or down, but that kind of talk goes flat very soon.

It appears to me that a large number of successful and probably not so successful people use FA services.

Not surprising at all. I used to hang out with my Dad's ROMEO group (although it was really happy hour at his house a couple times a week) that normally included 4-5 folks. All of them (except for me and an occasional interloper who visited for the entertainment) were at least 80 years old. They could all be considered to be financially successful in life and money was rarely discussed. I don't recall the use of a FA ever being discussed, but when one of the bankers that they ALL used got charged with embezzling from the bank, there was a LOT to talk about that!

 

[OldShooter]

With all the negative thoughts about Fast Eddie, I did find something in their SEC 10-K (annual) report that warmed my heart:

LITIGATION AND REGULATORY INVESTIGATIONS AND PROCEEDINGS — As a financial services firm, the Partnership is subject to litigation involving civil plaintiffs seeking substantial damages and regulatory investigations and proceedings, which have increased over time and are expected to continue to increase.
​

Maybe there is hope for at least some victims.

https://www.sec.gov/Archives/edgar/data/815917/000156459021012829/ck0000815917-10k_20201231.htm