Has Edward Jones changed its practices? (2024)

Next week, I will be attending a session for retirees about Financial and Legal Planning. It's part of a series of sessions to help people get their lives in order. Today's session was about healthcare directives. The fourth will be about funeral pre-planning.

I was dismayed when I saw that the presenter at next week's session is from Edward Jones. I talked with the folks (from county government) who are hosting the series. They know me and heard my concerns. They assured me that they were very clear with their presenters that they could not do anything approaching sales. I explained that my concern was that they would be trolling for leads among the unsophisticated in the audience. They encouraged me to attend next week (I'm already registered) and to ask challenging questions if I saw a need. (Depending on how it goes, I may ask about passive investing and avoiding funds with loads.)

I have emailed the host the link to the lengthy article from 2012 about EJ (http://kronstantinople.blogspot.com/p/e ... -saga.html)

What I'm wondering is whether EJ has done anything to actually polish its reputation. Are their "financial advisors" now getting CFP credentials? Are they working as actual fiduciaries? Do they now include low-cost index funds in their stable of investments? Anybody here have any up-to-date intel about how EJ may have changed in the past decade?

If the EJ Rep didn't step up to provide the presentation for your counties residents who would do it? Your county is trying to provide a valuable service, but they are depending on local "experts" to make the presentations. These experts don't really want to do it.

My guess is EJ hasn't changed their ways. This EJ rep is feeling obligated to do the presentation but is pacifying themselves by thinking maybe they get 1 client out of it.

Eitherway, unless you want to make the presentation, best to just let it go and not throw barbs from the audience.

Their faq says they start at 1.35%.
https://www.edwardjones.com/us-en/worki ... visor/fees

Example:
Guided solutions. Annual program fee of 1.35%, with lower tiers and reduced rates for higher asset levels.

Some investments have third-party internal expenses.

They have a bunch of things. They will be able to say we can put you in low cost index funds. But to get those you will be in an AUM model for retirement accounts.

Many Edward Jones reps are CFPs. I've seen aCcurate and well balanced presentations from EJ. I think their biggest variable are the individual reps. Some are greedy and looking for comissions. Some are decent, but still constrained by some EJ mothership rules. They will say they are a fiduciary, maybe. But even if they are, it is easy to convince yourself of specific approaches when your paycheck is driven by it.

mhalley wrote: ↑Thu Sep 21, 2023 12:16 amTheir faq says they start at 1.35%.
https://www.edwardjones.com/us-en/worki ... visor/fees

Example:
Guided solutions. Annual program fee of 1.35%, with lower tiers and reduced rates for higher asset levels.

Some investments have third-party internal expenses.

If these are the lowered fees, what were they before

suemarkp wrote: ↑Thu Sep 21, 2023 12:20 amThey have a bunch of things. They will be able to say we can put you in low cost index funds. But to get those you will be in an AUM model for retirement accounts.

Many Edward Jones reps are CFPs. I've seen aCcurate and well balanced presentations from EJ. I think their biggest variable are the individual reps. Some are greedy and looking for comissions. Some are decent, but still constrained by some EJ mothership rules. They will say they are a fiduciary, maybe. But even if they are, it is easy to convince yourself of specific approaches when your paycheck is driven by it.

Good to hear that you've seen well-balanced presentation from them. And that they at least acknowledge the importance of a fiduciary relationship.

DoubleComma wrote: ↑Wed Sep 20, 2023 11:51 pmIf the EJ Rep didn't step up to provide the presentation for your counties residents who would do it? Your county is trying to provide a valuable service, but they are depending on local "experts" to make the presentations. These experts don't really want to do it.

My guess is EJ hasn't changed their ways. This EJ rep is feeling obligated to do the presentation but is pacifying themselves by thinking maybe they get 1 client out of it.

Eitherway, unless you want to make the presentation, best to just let it go and not throw barbs from the audience.

No plans to throw any barbs.

mhalley wrote: ↑Thu Sep 21, 2023 12:16 amTheir faq says they start at 1.35%.

Goodness gracious.

Yes. Edward Jones has made adjustments to its business model. It’s still in the same business it’s always been in though, which is to help households with their investments, for a profit. There’s nothing sinister about that, but it’s not a stretch to say EJ probably is a bad deal for the sorts of folks who view time/money the way the typical Boglehead does. Not just EJ, either. All “full-service” investment firms are too expensive for the “own just three low cost index funds” crowd, of which I am one.

Further, it’s not unusual for EJ CFPs to educate the public without any expectation of paying clients resulting from it. My brother is an EJ rep and for a long time he was paid to teach a class, and that payment wasn’t made by EJ. I don’t know the details of what he did but I do know her flew to far away locations to teach groups that wanted to learn more about investments. It wasn’t part of a learning I situation, and if I had to guess he was paid by the federal government- but that’s just a guess. I know they no longer pursue old-fashioned “door knocking” as their primary means of growing their market share, which they did for decades.

I also know that very recently EJ compliance has forced my parents to move a irrevocable trust account from EJ that my brother is cotrustee on. It has been there for years, so I don’t know why all of a sudden they’re cracking down now.

And to answer the question about whether or not EJ reps are fiduciaries, I’m fairly certain they are. I don’t talk to my brother about his work but I’m sure I’ve heard him say he’s a fiduciary at least once.

So yes, Edward Jones has evolved at least somewhat in recent years. I will say he and his wife fly back from Eastern Europe tomorrow where they’ve been for a week, which of course was partially paid for by the nice customers of Edward Jones. That’s when I feel like you can be sure EJ has changed in a big way… when their long standing, dare I say infamous, “recognition trips” go out the window. That would show me a profound change in the cult-ure that makes them profoundly unique in financial services.

I learned a phrase here recently … if you hang around a barbershop, you will get a haircut.

Hang around EJ - you are going to get what they sell.

Out of curiosity I googled it and here is a PDF on their web site which explains all the ways they are compensated. It does not give any details of the numbers but it four pages long.

https://www.edwardjones.com/sites/defau ... rvices.pdf

I don't know if the site is reliable, but this web page, from a... web newsletter?... says

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.

Another random search result says

Advisors at Edward Jones are not bound to the fiduciary standard at the brokerage level. The firm's advisors working with institutional plans are, though. Edward Jones advisors who have earned the right to use the CFP or CFA marks are required to act as fiduciaries.

Edward Jones itself has a long document that contains the single sentence, buried in it,

When you participate in Retirement Plan Services, you pay a Retirement Plan Services Fee to Edward Jones... For this fee, Edward Jones will serve as an investment advice fiduciary at the plan level, and provide educational services at both the plan and participant level, if applicable.

I would not intentionally pester the EJ rep, but if he happens to mention the word "fiduciary" at all, then it would be fair to ask him for details.

The whole question of "who is a fiduciary?" is surprisingly murky, as is the question of whether it makes a difference in real life. I once tried to figure out whether Vanguard's PAS "is a fiduciary" and basically got nowhere. Firms may be fiduciaries, without your individual representative being one.

The situation has only gotten worse since the fiduciary rule was killed in 2018.

nisiprius wrote: ↑Thu Sep 21, 2023 7:03 amThe whole question of "who is a fiduciary?" is surprisingly murky, as is the question of whether it makes a difference in real life. I once tried to figure out whether Vanguard's PAS "is a fiduciary" and basically got nowhere. Firms may be fiduciaries, without your individual representative being one.

Complicating matters, an individual can perform both fiduciary and non-fiduciary roles at different times, even in a single session, right?

I think a number of firms did clean up their acts back when it was expected that the fiduciary rules would be imposed in 2017-2018.

GerryL, I think it would be inappropriate to ask hostile questions of the rep just because he is from Edward Jones. First of all, I think it is unlikely that he will even discuss the firm. Of course, having an "educational" presenter being identified as from EJ gives the firm credibility and I have no doubt that after the session he will give his business card to anyone who asks.

In your position, I would only ask questions that are a) actually relevant to your personal situation--questions for which you don't already think you know the answer, or b) challenge statements that are objectively factually inaccurate (like Ric Edelman, on his radio program, accusing Vanguard of hiding 1.4% fees in its index funds).

Various posters in the past have mentioned EJ reps recommending index funds.

If the presenter is actually from the branch of EJ that manages retirement plans, and if he has CFP after his name, he's probably fine.

No, EJ has not changed their ways.

Fees are buried on page 10 of 10.

Their website will never show a fee or an expense ratio for any fund.

They hire some of the "nicest, friendlyist, swell people" who still take big fees from your precious portfolio.

EJ independent reps are independent. They are a heterogeneous bunch, not clones from the mothership.

So lets not tar everybody with the same broad brush.

Lets put things in perspective. Having worked in this space, it is next to impossible to offer quality personal advice at a reasonable cost to the middle market.

Wanderingwheelz wrote: ↑Thu Sep 21, 2023 4:03 am I know they no longer pursue old-fashioned “door knocking” as their primary means of growing their market share, which they did for decades.

Good to hear that this is the case in some places. However we had one going door to door about 3 weeks ago...

rbd789 wrote: ↑Thu Sep 21, 2023 8:52 am

Wanderingwheelz wrote: ↑Thu Sep 21, 2023 4:03 am I know they no longer pursue old-fashioned “door knocking” as their primary means of growing their market share, which they did for decades.

Good to hear that this is the case in some places. However we had one going door to door about 3 weeks ago...

It’s actually the case in all places, but there’s no rule forbidding it as far as I know. It wasn’t until fairly recently that Edward Jones had a National television ad campaign, for example. EJ is changing with the times just like any growing company would do.

I doubt a traveling companion on an EJ recognition trip has to be a spouse of the opposite sex as used to be the rule. Times change.. companies adapt. In that same era I had no trouble bringing my girlfriend on a Merrill Lunch recognition trip before we were married. EJ knows they’re in competition for the best talent.

Anyway, door knocking might actually work now that a much higher percentage of white collar workers are not at the office.

Thanks all for your input. Just to be clear -- since several have mentioned this -- I have no intention of asking "barbed questions" or being in any way argumentative. (Well, maybe if they made a comment dissing passive investing, I might speak up to challenge that kind statement.)

I do plan on attending the session as it will be interesting to hear both what the rep has to say and what kinds of questions the audience members ask.

Among the things that arise in my mind when I think of Edward Jones are "charlatans," "snake-oil salesmen," and "thieves."

A starting 1.35% fee is supportive of my assumptions.

alex_686 wrote: ↑Thu Sep 21, 2023 8:49 am...Let's put things in perspective. Having worked in this space, it is next to impossible to offer quality personal advice at a reasonable cost to the middle market.

I believe you.

This is the elephant in the room for all advisory services offered to the mass affluent.

It's easy enough to confirm back-of-the-envelope if you just ask "how many hours a year do I think it would take an advisor to give me the level of attention I want/need/expect" and then multiply that by "what is the hourly rate for professional services that seem broadly comparable to what I need from an advisor?"

Charles Joseph wrote: ↑Thu Sep 21, 2023 3:44 pmAmong the things that arise in my mind when I think of Edward Jones are "charlatans," "snake-oil salesmen," and "thieves."

A starting 1.35% fee is supportive of my assumptions.

Note that "starting" fee rate means that is the highest, and it goes lower as you put in more money. Not that 1.35% is any good though...

They also have some leeway in setting fees. I've seen starting AUM fees of 1.1% and this is with less than $50K invested. It may depend on if you're a person who is calling the advisor every week in a panic to buy or sell, or you are more hands off and never call. Not all accounts have AUM fees, but if not they will get you other ways with transaction fees. There are also account fees ($10 to $40/year I think for IRAs), and an account closure fee. Again, they have leeway in some of those depending on the circ*mstance.

Always interesting to read about conflicts of interest.

https://www.edwardjones.com/sites/defau ... terest.pdf

https://www.edwardjones.com/sites/defau ... _Final.pdf

JBTX wrote: ↑Thu Sep 21, 2023 11:31 pmAlways interesting to read about conflicts of interest.

https://www.edwardjones.com/sites/defau ... terest.pdf

https://www.edwardjones.com/sites/defau ... _Final.pdf

Yes - 12 pages of densely worded text.

I'll bet that all EJ clients have read and digested the information.

SmileyFace wrote: ↑Fri Sep 22, 2023 6:49 amThese "free" sessions always have people trying to sell stuff or get leads (without directly advertising such or stating) - don't they? All the other sessions likely have similar vendors to EJ for their fields/areas if you peel back the speakers and who they work for and pay attention to the drops of references/etc. which help these folks with sales or leads. You can't expect free sessions to really be free.

That's certainly true and it does occur in different fields. The free sessions can still be valuable; the sales angle is just something to be aware of.

tibbitts wrote: ↑Fri Sep 22, 2023 7:50 am

SmileyFace wrote: ↑Fri Sep 22, 2023 6:49 amThese "free" sessions always have people trying to sell stuff or get leads (without directly advertising such or stating) - don't they? All the other sessions likely have similar vendors to EJ for their fields/areas if you peel back the speakers and who they work for and pay attention to the drops of references/etc. which help these folks with sales or leads. You can't expect free sessions to really be free.

That's certainly true and it does occur in different fields. The free sessions can still be valuable; the sales angle is just something to be aware of.

Agreed - the audience shouldn't just be aware of the session hosted by EJ being a lead-generator - but all of them. Shop around if you want help versus defaulting to the speaker of the free even (example: OP mentioned a session on Health Directors - usually the free sessions on estate planning and life-event planning documents are local family law firms - their advice is probably sound - but you should be aware they are there to generate leads and may or may not be the best option for legal services in town. Likewise - guessing the funeral pre-planning session was hosted by a funeral home).

Boilermaker82 wrote: ↑Fri Sep 22, 2023 12:16 pmI got my mother out of EJ about 8 months ago. She has a pretty nice retirement nest egg and they had her in 28 (2-8!) different mutual funds, some of them front loaded, all high fee. I've since gotten her transferred to a simple 50/50 index 3-funder at Fidelity. Pretty disgusting tactics - will never trust EJ.

DW & I had accounts at EJ & combined we had over 60 different holdings. That creates the mystique/smoke/confusion.

Boilermaker82 wrote: ↑Fri Sep 22, 2023 12:16 pmI got my mother out of EJ about 8 months ago. She has a pretty nice retirement nest egg and they had her in 28 (2-8!) different mutual funds, some of them front loaded, all high fee. I've since gotten her transferred to a simple 50/50 index 3-funder at Fidelity. Pretty disgusting tactics - will never trust EJ.

Kudos to you for helping your mom to save a ton of money over future years.

SmileyFace wrote: ↑Fri Sep 22, 2023 8:41 am

tibbitts wrote: ↑Fri Sep 22, 2023 7:50 am

SmileyFace wrote: ↑Fri Sep 22, 2023 6:49 amThese "free" sessions always have people trying to sell stuff or get leads (without directly advertising such or stating) - don't they? All the other sessions likely have similar vendors to EJ for their fields/areas if you peel back the speakers and who they work for and pay attention to the drops of references/etc. which help these folks with sales or leads. You can't expect free sessions to really be free.

That's certainly true and it does occur in different fields. The free sessions can still be valuable; the sales angle is just something to be aware of.

Agreed - the audience shouldn't just be aware of the session hosted by EJ being a lead-generator - but all of them. Shop around if you want help versus defaulting to the speaker of the free even (example: OP mentioned a session on Health Directors - usually the free sessions on estate planning and life-event planning documents are local family law firms - their advice is probably sound - but you should be aware they are there to generate leads and may or may not be the best option for legal services in town. Likewise - guessing the funeral pre-planning session was hosted by a funeral home).

Indeed. While the health directives presentation was delivered by a county employee from the Veterans and Aging Office and did not involve a third-party vendor, the next ones all feature speakers with a commercial interest in the topic.

Some years back I attended a session on estate planning that was presented by people from a local law firm. After a few years, I did follow up with the same law firm but interviewed a lawyer there (not one who had been a presenter) and eventually worked with her to make my estate plan. I did not follow up with a different lawyer who was doing monthly sessions at the local senior center as he did not impress me at all.

Charles Joseph wrote: ↑Thu Sep 21, 2023 3:44 pmAmong the things that arise in my mind when I think of Edward Jones are "charlatans," "snake-oil salesmen," and "thieves."

A starting 1.35% fee is supportive of my assumptions.

Boilermaker82 wrote: ↑Fri Sep 22, 2023 12:16 pmI got my mother out of EJ about 8 months ago. She has a pretty nice retirement nest egg and they had her in 28 (2-8!) different mutual funds, some of them front loaded, all high fee. I've since gotten her transferred to a simple 50/50 index 3-funder at Fidelity. Pretty disgusting tactics - will never trust EJ.

Oh but isn't it glorious when they knock on your door with a bean pie? Now that's service!

zaplunken wrote: ↑Sun Sep 24, 2023 4:17 pm

Charles Joseph wrote: ↑Thu Sep 21, 2023 3:44 pmAmong the things that arise in my mind when I think of Edward Jones are "charlatans," "snake-oil salesmen," and "thieves."

A starting 1.35% fee is supportive of my assumptions.

Boilermaker82 wrote: ↑Fri Sep 22, 2023 12:16 pmI got my mother out of EJ about 8 months ago. She has a pretty nice retirement nest egg and they had her in 28 (2-8!) different mutual funds, some of them front loaded, all high fee. I've since gotten her transferred to a simple 50/50 index 3-funder at Fidelity. Pretty disgusting tactics - will never trust EJ.

Oh but isn't it glorious when they knock on your door with a bean pie? Now that's service!

Did someone say bean pie???

I don't see anything wrong in challenging inaccurate information given in a presentation if it becomes obvious that the presenter has a vested interest in steering the audience towards products that they recommend. For instance, alarms should go off if the presenter suggests not delaying SS so as not to lower the amount of investment dollars needed to bridge the gap, for which they may be getting a larger paycheck due to AUM.

The suggestion of "investing" in annuities, such as a SPIA at an inappropriately young age, or any other type that will garner a large commission for the agent should be suspect. Claims of being able to beat the market consistently with special expertise picking individual stocks is also a bogus claim. Statements like "We do better when you do better" are proof that they are charging a percentage based on balance. Statements that "playing the stock market" is a losers game and that there are better ways to grow your wealth are most commonly made by annuity salesmen masquerading as investment counselors.

I've been to many investment presentations, both free with a meal provided, and one that I paid for, which was a month's long college course. Some of the claims that were being made were patently false, even at the college course that I found was being presented by two insurance salesmen from the same firm after I googled their names. They actively discouraged delaying SS and warned of rules that didn't exist, or described existing rules incorrectly, while suggesting various insurance products and variable annuities that they happened to sell.

Those presentations all had one thing in common, they claimed there was no need to use their services, and they weren't pressuring anyone into anything, but encouraged those who were interested to leave their name and contact information on a list that was next to the entrance door where their business cards were located, there for the taking, right next to the donuts. Snacks and refreshments were always provided, even at the college course. There was usually a line of vulnerable seniors waiting to add their names to the list at the end of the presentation.

alex_686 wrote: ↑Thu Sep 21, 2023 8:49 amEJ independent reps are independent. They are a heterogeneous bunch, not clones from the mothership.

So lets not tar everybody with the same broad brush.

Unfortunately it is nearly impossible for the average investor to know if they are getting a good one or a bad one. Prudence suggests assuming they are all bad if they are not going to police their own.

That's according to Nobelist Ackerlof and his "Market for Lemons" regarding information asymmetry.

vested1 wrote: ↑Mon Sep 25, 2023 1:43 pm...The suggestion of "investing" in annuities, such as a SPIA at an inappropriately young age, or any other type that will garner a large commission for the agent...

I have been told that SPIAs do not garner large commissions for agents and I believe it is true.

I believe this is why, when I was trying to buy one, not one agent was actually willing to sell me one. They would promise to send me a quotation and "forget." They would say (truthfully, I expect) "I never recommend them to my clients." They all wanted me to look at variable annuities with fifty-page fine-print onionskin prospectuses.

The only ways to actually buy one seemed to be to go to BRK Direct (which doesn't exist any more), Vanguard, Fidelity, or specialist agencies like immediateannuities.com .