Working within guidelines provided by Edward Jones, you’ll have the flexibility to manage your portfolio the way you’d like, with extensive investment choices, sophisticated monitoring that notifies you when your account needs review and the option to rebalance whenever you’d like.
How Edward Jones Investments Helps Your Portfolio
They help you to understand your goals, comfort with risk and the length of time you have to reach your goals. They will meet with you to discuss this and then work with you to select the portfolio objective that’s right for your situation.
Using your portfolio objective as a framework, you’ll then work closely with your financial advisor to build your portfolio to ensure it aligns to those goals and objectives, and Edward Jones’ guidance. The final decision on all buys and sells is yours.
Flexible Investment Choices
You’ll have access to a wide range of eligible investment choices as you build your portfolio, including stocks, ETFs and mutual funds. Individual bonds and CD’s are also available for accounts with $50,000 or more.
The initial minimum investment amount to open an account is just $25,000.
Staying on Track with Guided Solutions
With Guided Solutions, you should expect to adjust your portfolio periodically to adapt to your evolving investment needs and stay aligned with our guidance.
But you and your financial advisor won’t be the only ones monitoring your portfolio. Advanced technology working behind the scenes will help you stay on track to meet your goals.
If your portfolio moves outside of the range set by your goals, you’ll receive an alert and then you must work together with your financial advisor to make adjustments.
How to Pay for Edward Jones Investments Services
For Edward Jones Investments, you will pay a Program Fee of 1.35% of your account’s value or lower, based on your account value.
This fee includes your financial advisor’s services, trading costs, performance reporting, evaluation and selection of investments for the program by Edward Jones research professionals, and other services to keep your account aligned with our guidance.
It does not include the internal expenses of the mutual funds and ETFs you own.
Your Program Fee may be lower depending on the value of your assets in the program.
Paying an on-going fee can make expenses more predictable but can be more expensive over time.
How They Build Your Portfolio Together
It’s important for them to understand your goals for Edward Jones Investments, comfort with risk and the length of time you have to reach your goals.
They will meet with you to discuss this and then work with you to select the portfolio objective that’s right for your situation.
Using your portfolio objective as a framework, you’ll then work closely with your financial advisor to build your portfolio to ensure it aligns to those goals and objectives, and Edward Jones’ guidance.
As long as you stay within the guidance provided by Edward Jones investment professionals, the final decision on all buys and sells is yours.
Extensive Fund Choices
With Guided Solutions Fund Account, you’ll have the ability to choose from an extensive list of eligible mutual funds and exchange-traded funds (ETFs). Mutual funds and ETFs hold many investments inside of them, providing diversification within your portfolio.
How to Stay on Track
In addition to monitoring by you and your financial advisor, built-in guardrails help you keep your investments aligned to Edward Jones guidance and your portfolio objective. Advanced technology works behind the scenes to automatically rebalance your portfolio once a year.
You can also make changes any time you like and request to rebalance as often as monthly. In fact, with Guided Solutions, you should expect to adjust your portfolio periodically to adapt to your evolving investment needs and stay aligned with our guidance.
Choosing a Model for Edward Jones Investments
First, they will help you select a portfolio objective. This will serve as a guide for your overall investment strategy by determining the target allocation ranges for investments you should have in your portfolio – based on your risk tolerance, timeline and goals.
You’ll work with your financial advisor to determine which model best aligns with those goals.
After that, professionals will manage your chosen model, making the day-to-day investment decisions to keep your account aligned with your portfolio objective and our guidance.
You’ll also have a specialized management team reviewing your model for tax management opportunities.
UMA Models in Edward Jones Investments
Each model contains a mix of mutual funds and/or exchange-traded funds (ETFs) as well as separately managed allocations (SMAs), which are professionally managed individual stocks and bonds. This could provide tax efficiencies and the flexibility to restrict certain types of investments within your account.
Staying on Track with Edward Jones Investments
We will monitor your account and automatically rebalance it if it drifts from your model’s target allocation ranges. This helps ensure your investments stay aligned with our guidance and your needs and goals.
In addition to regular account statements that detail your progress, you’ll receive Quarterly Performance Reports and meet with your financial advisor at least once a year to review your progress.
Edward Jones UMA Model Services
To open an Advisory Solutions UMA Model, you will need a minimum $500,000 investment.
Advisory Solutions fees include a Program Fee of 1.35% or lower and a Portfolio Strategy Fee of 0.19% or lower, based on your situation.
The Program Fee includes your financial advisor’s services, trading costs, performance reporting, evaluation and selection of investments for the program by Edward Jones research professionals, and other services to keep your account aligned with our guidance.
The Portfolio Strategy Fee covers professional portfolio management and overlay management of your model.
The fees do not include the internal expenses of the mutual funds and ETF’s you own or the cost of trades executed at a broker-dealer other than Edward Jones.
Paying an on-going fee can make expenses more predictable but can be more expensive over time.
About: Edward Jones Investments
Edward Jones is a full-service brokerage firm founded in 1922. The investment firm prides itself in taking a personal approach to delivering financial services and products, such as advice and mutual funds. But is Edward Jones right for you and your investments?
They built their seven-million-strong clientele by placing locations in communities all around the United States and Canada. Edward Jones has more than 41,000 financial advisors and other employees located in more than 16,000 branches around the country. Most offices are modest in size and typically have one financial advisor with an administrative assistant.
In summary, Edward Jones attempts to be the advisor next door, so to speak. They seek to build long-term relationships built on trust with clients. They tend to use mutual funds and use a basic model of building diversified portfolios for clients saving for retirement and other long-term goals.
Investing With Edward Jones Investments
As is the case with many brokerage firms, the decision to invest with them is more of a local decision than a national one. In different words, you need to trust the brokerage firm but it is the local advisor that should be trusted first.
One of the first questions you should ask a prospective advisor of any kind is: How do you get paid? One way Edward Jones gets paid is through revenue sharing with their network of mutual fund companies.
For example Edward Jones is a big user of American Funds, which has a large selection of mostly high-quality mutual funds with various pay structures through different mutual fund share classes. These can be front-loaded funds, back-loaded funds, or load-waived funds with 12b-1 fees.
However, Edward Jones does not consistently or completely invest client assets in no-load funds, which are often advantageous for investors. It’s important for investors to understand mutual fund fees before investing, no matter their trust level with the advisor.
Edward Jones Investments Reviews and Complaints
Although Edward Jones is generally a highly regarded brokerage firm looking out for the interests of the Main Street investor, their history is not without scandal or complaints from clients.
In 2004, Edward Jones was hit with allegations that it didn’t disclose important conflicts of interest.
When recommending mutual funds to clients, Edward Jones allegedly failed to communicate to clients that the funds being recommended were selected, not through a rigorous fiduciary screening, but because the funds offered Edward Jones payment.
Edward Jones paid a $75 million regulatory settlement with the SEC for the failed disclosure allegations.
In 2018, Edward Jones was sued in a federal court, where complaints claimed that the investment advisory firm has “pressured its more than 16,000 brokers to switch their largely middle-income brokerage customers from commission accounts into advisory accounts that charge as much as 2% of assets annually.”
The national average for fee-based advisors is just over 1% of assets. The culture at Edward Jones may be vastly improved since the lawsuit but it is still the responsibility of the investor to heed the “buyers beware” philosophy when choosing investment advisors.
Can Your Edward Jones Financial Advisor Really Serve Your Best Interests?
In 2004, highly regarded investment firm Edward Jones stumbled over allegations that it didn’t disclose important conflicts of interest. The question of whether its model possesses too many conflicts still bedevils the company and much of the financial advisory industry today.
Edward Jones agreed, without admitting any wrongdoing, to a $75 million regulatory settlement with the SEC for allegedly failing to disclose that it received tens of millions of dollars from preferred mutual fund partners each year on top of commissions and other fees.
Today, Edward Jones Investments continues to receive revenue-sharing payments from its preferred mutual fund partners, but it provides a detailed disclosure of those payments on its website.
The company earned $98.1 million in revenue-sharing payments from mutual funds and another $54.1 million from insurance product partners in 2011. It earned approximately $4.6 billion in overall revenue during the period. The company admits that those payments, which are common to the industry, represent potential conflicts:
“We want you to understand that Edward Jones’ receipt of revenue-sharing payments represents a potential conflict of interest in the form of additional financial incentive and financial benefit to the firm, its financial advisors and equity owners in connection with the sale of products from these partners.”Edward Jones
In another document titled “The Fiduciary Dilemma” — a memo produced by Edward Jones and circulated among congressional staffers in February 2010 — the company conceded that there were potential conflicts of interest inherent in the broker-dealer model in general, but that its model served investors well as long as those conflicts were disclosed.
In a nutshell, the broker-dealer advisory model is one in which financial advisors provide advice and assistance to customers in return for commissions, fees, and other payments that result from financial transactions.
Edward Jones argues that this model benefits ordinary investors by offering them counsel and guidance that is free, unless there is a transaction. As long as potential conflicts are disclosed, everyone wins, according to the company.
As a result of our research, we disagree with this view about Edward Jones Investments, and while we’re great believers in disclosure, it’s not enough of a protection for the ordinary investors who often see their investing returns diminished by high costs they don’t always understand.
And any model that incentivizes the sale of expensive mutual funds to investors with relatively small portfolios is particularly flawed.
Financial advisors at Edward Jones are primarily compensated on a straight commission basis. They get paid by selling customers financial products in Edward Jones Investments that generate commission revenue to the firm and themselves.
Most financial advisors in the broker-dealer industry are paid on a roughly similar model. Unfortunately, academic research in behavioural ethics is pretty clear that “when people have a vested interest in seeing a problem in a certain manner, they are no longer capable of objectivity.”
Edward Jones Door-to-Door Process
The door-to-door process is distinctive to Edward Jones Investments, and it inspires love or hate from those in the field.
When asked if newly hired agents were qualified to approach people’s homes and discuss their investments, James Weddle (managing partner of Edward Jones Investments) says it’s not just the new people who go door to door.
Weddle says that going door to door is the best way to build a career at Edward Jones, and that’s a necessary part of serving customers. “I wouldn’t invest with someone I hadn’t met,” he says. “I think that would be crazy.”
“Of the 14 people who were in my class from the very beginning, I think there are only four, including myself that are still in the field” says Koos.
“Everyone else moved into banking or some other non-advisory role. It’s a great career — one where you can do wonderful things for your clients all while making a fantastic, unlimited amount of income — but it’s not easy, especially getting started.”
Alan Canton was one Edward Jones Investmentscustomer whose broker left for another firm. Canton opted to follow his broker, and says he was surprised that no one tried to stop him.
“No one at Jones ever bothered to call me to ask me to stay until a new broker came to the office,” he says, “or to offer me an interview with other Jones brokers in the area. I was going to follow my broker anyway, but I was surprised that Jones never made any effort at all to retain me.”
Koos says that most customers don’t notice the turnover of agents. “Edward Jones does a good job of keeping it from their customers. Clients have learned unless you’re working with someone who’s been there at least three years, they won’t be there long.”
Lutz-Kiser, who has been with Edward Jones for four years, says that for some, finding a comfort level at Edward Jones seems to take a while.
“There’s definitely a hump. If someone makes it through the first three to five years, they’re likely to stay.”
When asked if she would recommend potential clients avoid brokers who had been with Edward Jones less than five years, she says, “No, because that would mean they wouldn’t work with me.”
Dan Weedin, of Toro Consulting in Poulsbo, Wash., has been with his Edward Jones broker for at least 10 years. He takes an active role in his portfolio management and largely steers the planning, with his brokers’ implementation.
“I do also trust he is always acting in my best interest. I just like to be the one who makes the decision with his help and advice,” he says. “This is a business relationship and it hasn’t failed me.”
Koos considers his time with Edward Jones well-spent. “At the end of the day, if I had to do it all over again, I’d still start at Jones,” he says. “
Advanced technology working behind the scenes in Edward Jones Investments will help you stay on track to meet your goals. If your portfolio moves outside of the range set by your goals, you’ll receive an alert and then you must work together with your financial advisor to make adjustments.
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