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Get your financial info from a random guy on a message board or someone who got an education and a license to do it?
How did this thread evolve into bickering about financial advisors?
Wasn't trying to ruffle feathers. It's been my experience that EJ overcharges their clients. There's plenty of lawsuits which articulate this is detail. Jones vs. Schultz from 2016 is one example.
In terms of actual returns, they might occasionally outperform in terms of % gains, but that's long before the fees are considering as well as the compounding interest applied to said fees over time. It adds up very quickly.
Sorry ~ It's 5.75% front loads.
I'm actually close friends with John Bachmann's son. Before John passed, we had plenty of conversations about this topic and EJ fee structures. His overarching belief was that EJ provided an invaluable service for those would otherwise not be in the market.
It’s that for some fund companies. Not all and again. The more you have the cheaper it is. EJ does provide a very valuable service. My clients mean the world to me and there’s nothing more rewarding that sitting with a husband and wife and being able to tell them yes you are going to make it.
Only a portion. The individual I just turned to Vanguard entered EJ in 2015 and invested $1.4mil. When we compared his performance over 6 years at his liquidation price with EJ, he had underperformed SPY by over 106% during that period.
Ah, the fond memories of a heel telling a dookie how basketball works🤣
His goal, like most, was not to underperform the market. Between QE and non-transitory inflation, we're losing between 15-18% per year on our money {conservatively.}
If you're not keeping up, your wealth is headed South. He was averaging under 6% per year return after the fee and opportunity costs associated with compounding interest with EJ.
Financial Planning Cheat Sheet that works for most:
62% - S&P ETF Index
30% - Blue Chip Fund (Dump dividends back into ETF if possible)
6-8% - Cash and Cash Derivatives
(Expense Ratio should be .05-.06% on average depending on the fund.)
This formula is updated online regularly based on FED moves and other factors. Bonds are largely dead thanks to QE and Obama.
Get in a ROTH 401k.
Don't do trusts with brokers. If you feel like you need a family trust (most don't), head to an attorney. Should run you about $1,500 {a one time fee only.}
What am I missing?
The only time one would use a full-service broker is if they are financially uncertain, don't spend much time on the web and would otherwise have money under a mattress.
If you're seeking alpha, there might be a full-service broker with some insider info on a niche market, but that's not going to last long (everything corrects to mean quickly) and you'll once again get chopped up with fees.
The example I posted above isn't an exception. It's the norm.
From the lawsuits I've read, it's clear that most agents are just following instruction guidelines from St. Louis. Many only know to compare pre-cost returns on funds. They also have no idea what they are making off any one individual b/c their paycheck comes broken down in fee structure format vs. individual accounts. This way, if Dr. Davis asks them how much they are paying in fees to the agent, the agent can confidently state that particular small portion of a much larger bag of fees that comes from many different directions.
What am I missing?
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Good....As long as he is never involved in our's at any capacity ever again would be too soon for me.
Could be wrong but everyone should get ready to be let down if they want Miller.
Why would you put it into the SPY ETF when I have hundreds of actively managed funds that out perform it?
some Jones and other Brokers are only able to vomit the green kool aid we are told to drink constantly. But, don’t lump us all together. I run my business very differently than most and I always do what’s in my clients best interest. Which is rarely what most do, which is plop everyone into a 6 pack of American funds…yuck.
I also despise those brokers that push high cost annuities and insurance products.
I love Roths, they’re great, unless you make too much to put into one, then one must get a little creative.
Because few funds outperform SPY or VOO over any length of time, especially once you consider all associated fees. The ones that do are either short-term outliers or a niche market where most times you end up buying the top. As I sure you well know, there's over 500 billion investors in SPY alone, and most fund managers are just tweaking that basket in order to add "signature" on their specialized fund and upcharge.
Yep. American Funds are the worst offenders and he was placed in those and it was also moved 3x over the 6yrs. When compared to SPY, my friend's fund above was $1.48mil lighter over the six year period than if he had just chosen SPY and a comparable blue chip fund. It honestly was just a sea of fees over time from EJ and their revenue sharing partners.
I'm reading today that Xavier has entered the fray or Miller. If a Catholic school is willing, then we ought to be.
I would think that Xavier would be in the market for Marshall as well - as a Catholic school has no problem with someone putting their hands on kids.
Zing!!
(Allegedly)
They probably wouldn't mind Marshall, but Miller was an assistant there in the early 2000s. [Edit: And then head coach for awhile].
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I am sorry he had that experience. Please know we don’t all run our business that way. I use both active and passive investments and more often than not we out perform the market. My job, when selective active managers is to find the biggest spread between up and down capture of their benchmark. Then I look at the beta. Are they taking additional risk versus the benchmark and is it paying off. Sharpe ratio.
older advisors swear by American funds, and some of them are OK, but theyre not what most think they are. Perfect example, I see a ton of American funds American mutual in the large value space….it underperforms it’s benchmark, the Russell 1000 value by almost 2% on the upside, but it only see 7% of a 10% drawdown. In my book that’s not a win, but in many seasoned vets eyes, they can convince clients they’re right.
I prefer the JP Morgan Us value fund, which will outperform on the up and down.
sorry to ramble, but don’t paint us all in a bad light, some of us actually do our due diligence to put our clients in the best possible position to improve them, and not ourselves.
He's only been to places already established. I don't see him working here. Plus he was getting fired for not doing well wins/loses even without all the off the court issues being considered.
He had already coached there and had success. That was his first job before he went to Arizona.
What? This is frustrating. ETF/Index Funds are specifically for the unsophisticated investor. Good luck outperforming for these funds any length of time, especially after fees and compounding are considered. There's 30 years of data now to back that up.
If Edward Jones wanted to help the unsophisticated investor, they would sit down with the client for that face-to-face they desire, determine their needs, and direct them to these funds and charge a modest rate (.02%) on top. That's how you uncomplicate things. Not via financial jargon and fees all over the place.
Also, agents have to operate within a framework set forth by headquarters. They aren't some savant in a box who can freelance.
I've traded for over 15 years. Institutional investors are not investing in Edward Jones endorsed products.
The funds they place pp in. If they go outside the network, there's typically some backend arrangement between Jones and that fund.
There is no network. I open my office to anyone who wants to come in and ask questions.
I'm talking about when you place people in JP, Goldman, etc Funds.
I didn't mean to pile on here. Bachmann's comments were my focus.
All mutual fund companies pay advisors for placing money in their funds. ALL. If you work with fidelity or vanguard they make money off your money. It’s vanguard dot com. Not dot org. No one does this service for free it’s a pay for knowledge business.
if you’re savvy enough to follow it and pick your own investments and are happy with that great. If you have the time to place trades and the knowledge to know when, good. But many folks don’t.
I don’t do my own taxes. I have the ability and the knowledge. But I don’t have the time. So I outsource it and gladly pay the cost of doing business to save me the time and the headache.
some folks enjoy having a professional advisor who guides them in their decisions and is fully licensed and trained in the business. Some, not so much. And to those I say, have fun.
Ed Jones and it’s advisors or any other full service brokerage firm is not by and large evil and greedy like this thread has painted it. Are there bad people in my business yeah there are. There are also crappy doctors and lawyers and other service folks who are only in it for the $. But to lump everyone together or to paint one company in a bad light to make us all look bad is short sighted. Some of us got into the business to genuinely help others reach their goals.
Thanks for the response.
I'm referring to EJ superfluous fee system and the fact it requires someone with a healthy moral compass like yourself even to come close to what these index funds doing (post expenses.) Otherwise, the entire business model is predicated on extracting funds from a client's account and into their own account in creative ways. You've seen plenty of EJ statements. Transparency is a big issue if you don't know what to look for. And it's not like an Edward Jones office has a agent rating on the front door.
Also, there's nothing saavy about investing since index funds arrived. That was the point and full-service brokerage fought it tooth and nail because they believed it would kill the industry. Index funds have Quant analysts working around the clock with set, transparent fees and have outperformed most funds over most time frames since inception. Attempting to outperform these funds and also keep fees in check is like going to Vegas. Well, unless you're going to personally going to try to hedge with asymmetrical assets like BTC (no spot) and gold.
Turncock's example above is brutal. That's over $200K lost each year in opportunity costs due to an unscrupulous agent pushing underperforming funds with max fee structure. That's a lawsuit if it was me and many have sued. The SEC should not allow companies to charge front-loads (especially 5.75%!) or backloads or revenue sharing in 2022.
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Ha. Hard to disagree with anything you've said here. Although one thing I can say with confidence - John would have a response. He was one of the best salesmen I've ever seen. Top-shelf emotional control and could talk for hours about anything.
Yeah. God forbid anyone try to make a living.
hopefully I never get to explain to you how I can do your job better than you and your whole industry. Then call your baby ugly
Apologies. Wasn't directed at you at all and tried to make that clear in the first paragraph. Also, I was originally responsing to a comment from another poster. Nothing was directed at you whatsoever.
There's plenty of threads on Reddit and in investing forums which specifically call them out so I'm not really stating anything novel here. Was just amazed at JB's comments because the system is not setup to protect the unseasoned investor and they've settled lawsuits directly related to this as a result. There's also a big distinction between making a living and deception. Glad you take the high road.
Thanks!I got a 2 for 1 deal. Joined the thread for mbb coach news and got a free finance lesson and who we are not gonna get for a coach....life is good.
Same way all the other threads devolve into political garbage.
So who is going to be the next coach? Beth Mowins? Another reason women should stick to women sports. Can’t watch a game she calls.
My EJ is very upfront with me. Trys to educate me on my finances showing me details of my finance portfolio. He holds me accountable to my personal monthly budget. Very happy with EJ!
I've used EJ for about 10 years now. I was given a choice when it comes to fees. I elected to be charged by transaction since I only do stocks and mutual funds with them. No monthly fee or whatnot. Since I only do a couple of transactions a year, my fees seem reasonable.
My agent is pretty knowledgable when it comes small business owners like myself. I look at it like my transaction fees pay for the advise he gives me. In my mind, it's well worth it.
Make sure to compare your bottom line (liquidation amount) to the original amount you brought to them to determine your actual APR. Don't go at it from an angle of trying to track down all of the fees and opportunity costs tied to those fees over time.
I'm sure there are good guys like Ratheolcoach out there. My frustration was what happened to my friend and a few others who have come to me in the past with concerns. I do agree with Thirdcat that the system and statements are confusing for those who don't have a financial background. It also provides ample room for manipulation if you run into an unscrupulous agent (as Ratheolcoach referenced) and that's on EJ itself.
I'm a former CPA and also have an MBA from the University and it took me some significant time to figure out exactly why my friend's return over those six years was underperforming the most popular index funds in the world by that large of a margin. As mentioned previously, it all had to do with needless front/back/12.b1/turnover fees, opportunity costs and compounding interest. His statements were very confusing and did not report all of the fees - especially from funds that were outside of the network. At the time, my financially illiterate buddy was just happy that his balance was "going up each year" in a hot multi-year market with the FED printer running 24/7. Little did he know he was drowning once you factor in inflation and 12 years of QE pressure.
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Can your EJ folks coach basketball? Cuz we could really use somebody who can.
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