In 2011, I started my investing journey by opening a Roth IRA at Edward Jones. I was in my final year of college pursuing a degree in electrical engineering. Mrs. Nine to Thrive had just graduated and was making decent income as a radiologic technologist at the local hospital, so we decided to start investing our extra savings.
While most people are whining and being complainy-pants about the amount of student loan debt they’re in, we were able to get through college debt free and begin our path to financial independence.
The Start at Edward Jones
In 2011, I opened an account at Edward Jones. Having never invested before, and not knowing what the heck I was doing, I reached out to a family friend who was a financial advisor at Edward Jones. I set up a phone call with him, and we talked about my goals and my risk tolerance. He suggested that I invest in mutual funds from Franklin Templeton.
Here’s the inside scoop on Edward Jones. The financial advisors are trying to balance the needs of their clients with making a commission for themselves. Therefore, the funds they recommend will always have fees associated with them. In this case, Franklin Templeton funds had a 5.75% front end load. Meaning the $3,000 I thought I was investing was actually $3,000 – 5.75% = $2,828. On top of that, Edward Jones charges a $40 annual fee. So really, I was only able to invest $2,788.
Dang. Forking over $212 just to invest my money seemed like a lot to me. But at the time, I didn’t think twice about the fees, believing that’s just how investing works. I was also assured by my financial advisor that the funds recommended to me would outperform the market (Lies! More on that later).
The Problem with Edward Jones
You’d think by using a “professional” and paying all this additional money in the form of fees, you’d have access to the best of the best of mutual funds. The funds they recommend should far surpass the returns of the Dow Jones or S&P 500 right?
Wrong! That’s far from true. 92% of actively managed funds (everything that will be recommended to you at Edward Jones) fail to beat the S&P 500. If you hold your investment accounts at Edward Jones, not only will you be forced into investing in actively managed funds that likely won’t outperform the market, but you’ll be paying expensive fees on top of it!
Take a look at the chart below. In 2011, the “Franklin Templeton Rising Dividends” mutual fund was recommended to me (FRDPX). Compare the gains of this fund versus the S&P 500:
From November 2011 to October 2019, the S&P 500 (GSPC) is up 138.2% versus 95.47% for FRDPX. Note that these returns do not include dividends.
This comparison doesn’t even account for the fact that I automatically started in the hole with all the fees that Edward Jones charged.
See below for what this looks like in real dollars. Note that the returns below include dividends.
Wowza, after seven years, the S&P 500 has already outgained that “professionally” recommended mutual fund by over $1,000.
Still think it’s worth using Edward Jones? After looking at the numbers myself, I didn’t think so.
Why Vanguard is Better
Jack Bogle founded Vanguard in 1975, and the company is client owned and operated at cost. This makes Vanguard unique from every other investment firm out there.
Edward Jones on the other hand, is a privately owned company. The owners (shareholders) of Edward Jones expect a return on their investment. This return on investment comes from the revenue that Edward Jones generates from the fees associated with their accounts and commissions you pay when buying a mutual fund.
When you own a mutual fund at Edward Jones, you are paying for the profit that goes to the Edward Jones shareholders (owners). So obviously the shareholders at Edwards Jones want the fees to be as high as possible, which results in higher returns on their investment, not yours.
Vanguard, is operated at cost. Vanguard has no shareholders to answer to. The profit that the company makes gets redirected back into its mutual funds. Resulting in mutual funds with extremely low expense ratios (an expense ratio is the cost needed to manage a mutual fund).
The average expense ratio at Vanguard is 0.18%. The industry average is over 1%. You may think meh, 1% isn’t that big of a deal, I think I’ll stick with Edward Jones. All things considered equal, here’s what the difference looks like after 30 years:
That 1% expense ratio could be the difference of over $176,000!! And that’s not even considering the front end load fees of 5.75%, or the fact that the funds at Edward Jones underperform those at Vanguard.
Does this Guy Have an Affiliation with Vanguard?
Nope! I’m just trying to help people from making the same mistake that I did by using Edward Jones. I would have been so much further along on my financial independence journey if I would have used Vanguard from the start.
Vanguard doesn’t know I’m writing this and I have no Vanguard advertisem*nts on my blog. Vanguard does not pay me in any fashion.
Transferring Your Money to Vanguard
This past year, I transferred my investment accounts from Edward Jones to Vanguard. It was a relatively straight forward process. You can start the transfer on Vanguard’s site. For my account, I was able to complete the process 100% online. However, for some accounts, you may need to fill out some paperwork and talk to someone at Edward Jones before transferring your account.
Which Vanguard Fund to Invest in?
I personally invest all of my money in Vanguard’s VTSAX mutual fund. VTSAX invests in every publically traded company in the United States. When you buy VTSAX you are instantly diversifying yourself with stock from over 3,000 U.S. companies.
VTSAX has averaged a 14% return over the last 10 years (we’ve been in a “bull” market), and offers an additional 1.8% yearly dividend. The expense ratio, as you’d expect, is low, at only 0.04%.
Some people are hesitant to invest in stock mutual funds because of the day to day volatility, and I totally get it. But instead of worrying about what happens on the day to day, buy yourself some VTSAX and forget about it. History shows that on average you will average an 8% yearly return.
I also highly recommend using Personal Capital to track your investments and your overall net worth. It’s super easy to use, convenient, and you get a $20 Amazon gift card just for signing up here.
Since inception in January 1993, the Edward Jones Stock Focus List has provided an average annual total return of 9.6% compared to 9.5% for the S&P 500. Total returns assume reinvestment of dividends, capital appreciation and an annual management fee of 0.30% (prior to 2009 a transaction fee of 1% was assessed).
The success rate for an advisor in the Goodknight plan (the firm started 636 Goodknight partnerships last year) is about 80 percent compared to about half that when advisors start from scratch at the firm.
The fastest growing fund managed by U.S. asset management company Vanguard is the Vanguard Energy Index Fund. Over the year to January 16, 2023, the ETF generated an annual return of 44.19 percent.
The Program Fee is 1.35% and the Portfolio Strategy Fee begins at 0.19%. These fees are tiered so additional invested assets are subject to lower fees.
Our expectations are for fixed-income returns to average 3% to 4.25%. Therefore, if your portfolio objective is Balanced Growth and Income, for example, you can expect a long-term average return between 4.5% and 6.5%.
A good return on investment is generally considered to be about 7% per year, based on the average historic return of the S&P 500 index, and adjusting for inflation. But of course what one investor considers a good return might not be ideal for someone else.
If you open a brokerage account, such as an Edward Jones Select Account, your financial advisor earns revenue by receiving a portion of the transactional costs you pay for your investments, as well as from certain ongoing payments the firm receives from third parties.
As a broker, Vanguard is best suited for long-term or retirement savers, investors who prefer low-cost investment vehicles, and investors who prefer investing in index funds via mutual funds or exchange-traded funds (ETFs).
A year after Edward Jones suffered its first loss in U.S. financial advisor headcount in a decade, the firm's attrition rate is tapering off and it's deploying an ambitious hiring plan.
What is the average client balance at Edward Jones? While Edward Jones advises clients across a variety of portfolio sizes, the average client balance is currently $200,213. In total, Edward Jones manages $654.2 billion in assets.
Mutual funds and ETFs hold many investments inside of them, providing diversification within your portfolio. The initial investment minimum to open an account is $5,000.
Cons: Edward Jones' fees are higher than the national median advisory fee. The firm has brokerage partnerships established with the mutual funds, 529 programs, and annuities it represents. That means it'll receive revenue sharing payments when it makes purchases on behalf of its clients.
Compare company reviews, salaries and ratings to find out if Charles Schwab or Edward Jones is right for you. Charles Schwab is most highly rated for Work/life balance and Edward Jones is most highly rated for Work/life balance. ... Overall Rating.
Awards and Recognitions. Edward Jones has been named to Fortune Magazine's 2023 list of the World's Most Admired Companies, a recognition of the most respected and reputable companies. (2023 Fortune World's Most Admired Companies list, published February 2023, in partnership with Korn Ferry, data as of November 2022.
High-quality bonds and fixed-indexed annuities are often considered the safest investments with the highest returns. However, there are many different types of bond funds and annuities, each with risks and rewards. For example, government bonds are generally more stable than corporate bonds based on past performance.
According to FIRE, your portfolio should cover 25 times your annual expenses. Then, if you withdraw 4% of your portfolio every year, your portfolio will continue to grow and won't be compromised. We can apply this formula to the goal of making $3,000 a month like this: $3,000 x 12 months x 25 years = $900,000.
Edward Jones financial advisors use a personal, straightforward and long-term approach to investing, focusing first on understanding your unique goals and then on developing diversified investment strategies designed to help you reach your goals.
Edward Jones does not serve as a fiduciary except for at the Plan level of retirement plans. This means that their advisors aren't legally required to put their clients' needs ahead of their own. And Edward Jones' compensation disclosure admits that some of its advisor incentives could lead to conflicts of interest.
Edward Jones has arranged with BNY Mellon Investment Servicing Trust Company for PNC Bank, N.A., to issue Visa® cards to Edward Jones clients. When you use your cards, you will be accessing the available balance in your Edward Jones account.
Edward Jones is the latest firm swept up in the SEC's wide-ranging investigation into communications with clients via unauthorized personal devices. The firm disclosed the Securities and Exchange Commission inquiry in its annual report filed Friday with the SEC.
Does Edward Jones have a good reputation? A 2021 J.D. Power study ranked Edward Jones above average in overall investor satisfaction, with customers praising the firm's people, products, and fees. 8 However, customer complaints frequently center on difficulties accessing funds and receiving company support.
For the 13th time, financial services firm Edward Jones has been ranked highest in the employee advisor segment of the J.D. Power 2022 U.S. Financial Advisor Satisfaction StudySM. Based on responses from Edward Jones financial advisors, the firm earned an overall score of 876 points out of 1,000.
Edward Jones has a lot of sales reps/ brokers/ advisors and real estate. This is one of the primary reasons that fees are so high for clients. Most of their advisors are not a fiduciary for clients. Edward Jones also uses a lot of expensive mutual funds like American Funds and other companies that have 12b-1 fees.
The reason for the high rates is that Edward Jones is a broker that buys CDs in bulk from other banks and resells them at competitive rates. ... Best For.
Some advisors may see commissions as high as 70% of the first year's premium. After that, they may receive an additional 3% to 5% of the premium per year as long as the policy is active. Mutual funds: Typically, advisors making commissions on mutual funds get paid via a trailer fee.
Vanguard is the king of low-cost investing, making it ideal for buy-and-hold investors and retirement savers. But beginner investors and active traders will find the broker falls short despite its $0 stock trading commission, due to the lack of a strong trading platform and accessible educational resources.
Money market funds and other securities held in the Vanguard Brokerage Account are eligible for SIPC coverage. Securities in your brokerage account are protected up to $500,000. To learn more, visit the SIPC's website. Up to $250,000 by FDIC insurance.
Today, Vanguard funds boast some of the lowest fees in the industry. According to the firm, the average Vanguard mutual fund or ETF has an expense ratio 82% lower than the industry average. For retirement investors, this means more money staying in your savings and compounding.
$1,000 for Vanguard Target Retirement Funds and Vanguard STAR® Fund. $3,000 for most actively managed funds. Most Vanguard index funds no longer offer Investor Shares to new investors. For the few that do, most have $3,000 minimums.
Johnson says it could be clients pulling out money because they're retiring, or because they're negatively affected by the pandemic. Perhaps some are opting for active management as the markets become more volatile.
You're a Flagship client at Vanguard, which means you get personalized services reserved for our high-net-worth investors. Helping you look at your wealth holistically is important to us.
Financial advisors are leaving the industry for all sorts of reasons, but in most cases, the root cause can be traced to the same origin: failed training programs. The result is that many advisors struggle to build an enduring practice.
You can move your Edward Jones investments to Vanguard Group by requesting a transfer through Vanguard. You will need to provide personal and financial information to initiate the transfer. Vanguard will take care of the rest, including contacting Edward Jones, confirming information, and transferring assets.
If you are younger than 59½, the IRS will generally consider the payout an early distribution, and you could be assessed a 10% early withdrawal penalty in addition to federal and state income taxes. Even if you are 59½ or older, by cashing out, you will typically pay income taxes on all the assets at once.
How Much Does the Average 70-Year-Old Have in Savings? According to data from the Federal Reserve's most recent Survey of Consumer Finances, the average 65 to 74-year-old has a little over $426,000 saved. That's money that's specifically set aside in retirement accounts, including 401(k) plans and IRAs.
To help you maximize your retirement dollars, the 401(k) is an employer-sponsored plan that allows you to save for retirement in a tax-sheltered way. You can contribute up to $22,500 in 2023. ... The average 401(k) balance by age.
America's ranks of so-called 401(k) millionaires are diminishing following last year's stock market rout. The number of 401(k) accounts with at least $1 million in retirement savings fell 32% last year, to 299,000, from 442,000 in 2021, according to new data from Fidelity Investments.
The success rate for an advisor in the Goodknight plan (the firm started 636 Goodknight partnerships last year) is about 80 percent compared to about half that when advisors start from scratch at the firm.
The IRS does not require tax forms to be issued for every account at Edward Jones. Income less than $10: We do not furnish tax forms if your taxable brokerage account received less than $10 of reportable income or you took a distribution of less than $10 from your IRA.
Many high-yield savings accounts from online banks offer rates from 2.05% to 2.53%. On a $250,000 portfolio, you'd receive an annual income of $5,125 to $6,325 from one of those accounts.
Most investors would view an average annual rate of return of 10% or more as a good ROI for long-term investments in the stock market. However, keep in mind that this is an average. Some years will deliver lower returns -- perhaps even negative returns. Other years will generate significantly higher returns.
The average stock market return is about 10% per year for nearly the last century, as measured by the S&P 500 index. In some years, the market returns more than that, and in other years it returns less.
What is the average client balance at Edward Jones? While Edward Jones advises clients across a variety of portfolio sizes, the average client balance is currently $173,144. In total, Edward Jones manages $593.1 billion in assets.
Even with a well-diversified portfolio and minimal living expenses, this amount is not high enough to provide for most people. Investing this amount in a low-risk investment like a savings account with a rate between 2% to 2.50% of interest each year would return $2,000 to $2,500.
In most cases $300,000 is simply not enough money on which to retire early. If you retire at age 60, you will have to live on your $15,000 drawdown and nothing more. This is close to the $12,760 poverty line for an individual and translates into a monthly income of about $1,250 per month.
Many retirement planners suggest the typical 401(k) portfolio generates an average annual return of 5% to 8% based on market conditions. But your 401(k) return depends on different factors like your contributions, investment selection and fees.
Unlike other methods of investment appraisal, the ARR is based on profits rather than cashflow. It is affected by subjective, non-cash items such as the rate of depreciation you use to calculate profits. The ARR also fails to take into account the timing of profits.
Most companies use a 12% hurdle rate, which is based on the fact that the S&P 500 typically yields returns somewhere between 8% and 11% (annualized). Companies operating in industries with more volatile markets might use a slightly higher rate in order to offset risk and attract investors.
Your financial advisor generally receives between 36% and 40% of the compensation Edward Jones receives from asset-based fees, transactional revenue, ongoing 12b-1 fees, trail commissions and revenue from premiums generated by activity in your financial advisor's clients' accounts.
Introduction: My name is Horacio Brakus JD, I am a lively, splendid, jolly, vivacious, vast, cheerful, agreeable person who loves writing and wants to share my knowledge and understanding with you.
We notice you're using an ad blocker
Without advertising income, we can't keep making this site awesome for you.
