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I am in a dillema and unsure what to do as I am not very good with finance. I have my ROTH with Edward Jones and lately because of the new rule by DOL, my advisor informed me that they introduced a new flat fee of 1.35% annually of my total fun in my portfolio. Right now, each year I contribute the money, Edward Jones takes 5% commission. So for example, I contribute $10k, EJ takes $500. With the new fee structure, I would pay 1.35% of that $10k plus whatever balance I have in my portfolio. I can't decide what to do. My advisor at EJ said several people prefer that flat fee, but in a long run I just don't feel good about it. If I decide to convert to this new flat fee, EJ will refund the past commission to help pay for the 1.35%. It looks tempting from the sound of it in a short term. To add to it, with the flat fee it will allow my advisor to sell/buy new fund without having to worry about the 5% commission. 

So what you all think? Should I stick with the 5% commission each time I contribute or go with this new flat fee? The 5% seems steep, but my fund has been doing okay to a point that I already earn money and break even. I am not sure really and again I am not very good with finance. 

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Sounds like a bad deal 1.35% of every thing every year or 5% of new money only... if you invest with them for 4 years or... (more)

BPANZER1 (Apr. 10, 2017 @ 2:32p) |

Shortened it to just what we need.

There are no scenarios where either option works out well.

beatme (Apr. 11, 2017 @ 7:39a) |

They do this all over, act like I am your trusted neighbor so let me scam you.  Once had to run circles around the logic... (more)

DamnoIT (Apr. 12, 2017 @ 10:58a) |

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ouch.

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The answer is no.

Lazy index investing has been making a killing for the last 10 years. If you're barely ahead after EJ fees, it's time to move it all out.

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Rollover to someone else.

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You are not very good with finance.  OK.

Here's what you should do.  Move your ROTH to Vanguard and invest it all in no load stock index funds.  Paying 5% to get into a fund and then paying a really high fee on top of it is not good at all.  Edward Jones is no better than any other fund out there.  Ignore their sales pitch.  Your adviser with Edward Jones is not your friend.  He's taking you to the cleaners.

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Scamming 101 - see Edward Jones Fees.  Vanguard Target retirement account has about a .15% expense ratio and you do nothing but let it work.  The 5% buyin that EJ runs is to create an affinity to their products, people think they have bought into it so they don't want to sell.  If you convert you are kicking yourself again with a excessive annual fee.  Time to cut your losses and start getting good at finance or at least going a good direction unless you like giving EJ 10's or 100's of K from your retirement.   

https://investor.vanguard.com/mutual-funds/list#/mutual-funds/na...

Target (fill in your date here)

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Grab your money, take it out of edward jones. Put up a dart board consisting of every major stock symbol, index fund, etc... and throw 10 darts. Put 10% in each symbol. I'm willing to bet at the end of retirement you would come out more ahead than your edward jones' amazing investment skills. And by investment skills, I mean their ability to deceive you into paying ridiculous 1.5% or 5% fees.

But seriously, it's not that complicated - Even if you aren't good with money. Take that money out, deposit it into a new Vanguard IRA account and invest 100% in an S&P500 Index or even better for you - a Target Retirement account. There is no question you will come out 10 steps ahead at retirement time than if you keep it with Edward Jones.

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There are Portfolio Management groups that work for 1% annually of your portfolio. I don't use one as I do my own investing, but they are out there and I was just considering one because I don't want to have to deal with my portfolio as much.

Another thing you could do is just invest in something like T. Rowe Price or Vanguard Funds on your own. It's pretty simple and the fees for most of their funds are less than 1%.

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Does the Vanguard do SEP?

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moneybie said:   I am in a dillema and unsure what to do as I am not very good with finance. I have my ROTH with Edward Jones and lately because of the new rule by DOL, my advisor informed me that they introduced a new flat fee of 1.35% annually of my total fun in my portfolio. Right now, each year I contribute the money, Edward Jones takes 5% commission. So for example, I contribute $10k, EJ takes $500. With the new fee structure, I would pay 1.35% of that $10k plus whatever balance I have in my portfolio. I can't decide what to do. My advisor at EJ said several people prefer that flat fee, but in a long run I just don't feel good about it. If I decide to convert to this new flat fee, EJ will refund the past commission to help pay for the 1.35%. It looks tempting from the sound of it in a short term. To add to it, with the flat fee it will allow my advisor to sell/buy new fund without having to worry about the 5% commission. 

So what you all think? Should I stick with the 5% commission each time I contribute or go with this new flat fee? The 5% seems steep, but my fund has been doing okay to a point that I already earn money and break even. I am not sure really and again I am not very good with finance. 

  
These 5% initial loads are such rip off.  You need to make 5.26% before even breaking it to zero!!
And what exactly are they doing 1.35%?

Either fee structure is total ripoff. 
 

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Ok guys. Glad I asked this question. Here's my thought.

I do consider moving out of EJ to something else. I just contributed 10k and EJ is waiting on my decision whether to do the 1.35% flat rate or continue the 5% commission each time I contribute. My thought is, tell EJ to convert to 1.35% and get all my past commissions that I paid since the beginning of my portfolio refunded to pay for whatever the total comes out from 1.35% of my total balance in my portfolio. Then move the money after a few months to Vanguard. What do you think of this approach? I just don't want EJ to take the $500 commission then I am moving out of EJ soon.

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I always wondered how all these scammy investment/life insurance companies can afford all this TV advertising. Now I know.

Most of them are MLM scams just like all the skincare BS you see on social media.  Any idiot who sits through a class can become a "financial adviser" and get hired into someone's network for one of these companies for almost zero and fleece you on high commission bullshit so they can make a living. 

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Before you close the account, try to have an emergency that requires the money and ask them to refund the money.
If they don't budge, go with the option that gives you more money back and count it as tuition.

I'm going to leave this, if you feel aggreved and have some free time: http://www.finra.org/investors/investor-complaint-center

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This has got to be a troll post.

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moneybie said:   Ok guys. Glad I asked this question. Here's my thought.

I do consider moving out of EJ to something else. I just contributed 10k and EJ is waiting on my decision whether to do the 1.35% flat rate or continue the 5% commission each time I contribute. My thought is, tell EJ to convert to 1.35% and get all my past commissions that I paid since the beginning of my portfolio refunded to pay for whatever the total comes out from 1.35% of my total balance in my portfolio. Then move the money after a few months to Vanguard. What do you think of this approach? I just don't want EJ to take the $500 commission then I am moving out of EJ soon.

  
if you can't withdraw right away, and planning to move money out in few months .. i would say go with 1.35% now.   But know that - even that is a very high fee. That's just their fee, and I'm not sure what type of fund you're invested in - my guess will be Edward Jones probably offering you some funds with high underlying fee as well.

 

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moneybie said:   Ok guys. Glad I asked this question. Here's my thought.

I do consider moving out of EJ to something else. I just contributed 10k and EJ is waiting on my decision whether to do the 1.35% flat rate or continue the 5% commission each time I contribute. My thought is, tell EJ to convert to 1.35% and get all my past commissions that I paid since the beginning of my portfolio refunded to pay for whatever the total comes out from 1.35% of my total balance in my portfolio. Then move the money after a few months to Vanguard. What do you think of this approach? I just don't want EJ to take the $500 commission then I am moving out of EJ soon.

  Tell them you are cancelling your contribution.  Move everything immediately.  Don't be a wimp.  Bail out with force.

They will say they can't cancel.  That's BS.  If they haven't figured the commission then they haven't posted it to your account.  More than likely it's in a holding account earning nothing right now.

The point is, bail out now and don't pay ANY fees.  Stand up to them when they try and run a story on you which they undoubtedly will do.  Just tell them if they don't want to do it they can speak to your attorney.

 

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VentureScout said:   
moneybie said:   Ok guys. Glad I asked this question. Here's my thought.

I do consider moving out of EJ to something else. I just contributed 10k and EJ is waiting on my decision whether to do the 1.35% flat rate or continue the 5% commission each time I contribute. My thought is, tell EJ to convert to 1.35% and get all my past commissions that I paid since the beginning of my portfolio refunded to pay for whatever the total comes out from 1.35% of my total balance in my portfolio. Then move the money after a few months to Vanguard. What do you think of this approach? I just don't want EJ to take the $500 commission then I am moving out of EJ soon.

  Tell them you are cancelling your contribution.  Move everything immediately.  Don't be a wimp.  Bail out with force.

They will say they can't cancel.  That's BS.  If they haven't figured the commission then they haven't posted it to your account.  More than likely it's in a holding account earning nothing right now.

The point is, bail out now and don't pay ANY fees.  Stand up to them when they try and run a story on you which they undoubtedly will do.  Just tell them if they don't want to do it they can speak to your attorney.

 

  +1 on this approach

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Your fund is doing OK right now is because market has gone no where but up. SP has done 20%.

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prozario said:   
moneybie said:   Ok guys. Glad I asked this question. Here's my thought.

I do consider moving out of EJ to something else. I just contributed 10k and EJ is waiting on my decision whether to do the 1.35% flat rate or continue the 5% commission each time I contribute. My thought is, tell EJ to convert to 1.35% and get all my past commissions that I paid since the beginning of my portfolio refunded to pay for whatever the total comes out from 1.35% of my total balance in my portfolio. Then move the money after a few months to Vanguard. What do you think of this approach? I just don't want EJ to take the $500 commission then I am moving out of EJ soon.

  
if you can't withdraw right away, and planning to move money out in few months .. i would say go with 1.35% now.   But know that - even that is a very high fee. That's just their fee, and I'm not sure what type of fund you're invested in - my guess will be Edward Jones probably offering you some funds with high underlying fee as well.

 

  The fund that he invested for me is the American Funds. Commission 5%

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speedracer714 said:   This has got to be a troll post.

Edward Jones does have some big account fees, and indeed does offer a 1.35% account management fee.  On the opposite end, Schwab has some index funds in the 0.03% - 0.05% range.  Being that investment advisers generally don't beat the market and you're paying them extra to do that, I would go with the low-expense index funds.
  

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Ccntact Vanguard, T. Rowe Price, Fidelity, at least one of them with the intent to move the funds. I agree that the money should be moved. But fill out forms from the company you choose for a direct transfer of that money.
What has NOT been said is HOW to move the money. You do NOT want a check made out to you because, EJ would be REQUIRED to hold back 20% and send that to the IRS. YOU would be required to make that up and put the make up money in the investment you choose within 60 days. Failure to do so would result in expensive tax nightmare.

EXAMPLES - how to move the money. Investigate before you act to see what may be best for you.

https://personal.vanguard.com/us/openaccount?acctType=TOA&ELF_EN...

https://www.fidelity.com/retirement-ira/ira-transfer
Fidelity has IRA options to match Vanguard or T Rowe Price. In many cities, they have offices and advisors you can talk to. Most do not get a fee from you as they are employees of Fidelity. IF for some reason, you feel the need for a fee advisor, they have them, but I have never done so.
Often, Fidelity will pay any transfer fees or other costs taken by Edward Jones. Just ask when you do the transfer paperwork.

Disclosure: I have been an investor at Fidelity for almost 30 years. I have NEVER been employed by Fidelity.

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moneybie said:   I am in a dillema and unsure what to do as I am not very good with finance. I have my ROTH with Edward Jones and lately because of the new rule by DOL, my advisor informed me that they introduced a new flat fee of 1.35% annually of my total fun in my portfolio. Right now, each year I contribute the money, Edward Jones takes 5% commission. So for example, I contribute $10k, EJ takes $500. With the new fee structure, I would pay 1.35% of that $10k plus whatever balance I have in my portfolio. I can't decide what to do. My advisor at EJ said several people prefer that flat fee, but in a long run I just don't feel good about it. If I decide to convert to this new flat fee, EJ will refund the past commission to help pay for the 1.35%. It looks tempting from the sound of it in a short term. To add to it, with the flat fee it will allow my advisor to sell/buy new fund without having to worry about the 5% commission. 

So what you all think? Should I stick with the 5% commission each time I contribute or go with this new flat fee? The 5% seems steep, but my fund has been doing okay to a point that I already earn money and break even. I am not sure really and again I am not very good with finance. 

  Are they offering to refund all previous 5% commissions or just this year? If the former, wouldn't it be better to change first and then transfer everything out?

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OP are you employee or employer for this SEP?

I'm in same shit but I am employee and my employer decided to open SEP at EJ and I'm trying to convenience them to move it to Fidelity or Vanguard
I'm not sure if I alone can move or my employer has to move all the employees and himself as well?

Does any small business owner has experience of moving their SEP plan (with couple of employees) to Fidelity or Vanguard?

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DoonGuy said:   OP are you employee or employer for this SEP?

I'm in same shit but I am employee and my employer decided to open SEP at EJ and I'm trying to convenience them to move it to Fidelity or Vanguard
I'm not sure if I alone can move or my employer has to move all the employees and himself as well?

Does any small business owner has experience of moving their SEP plan (with couple of employees) to Fidelity or Vanguard?

  
I am not employee. I own my small business. 

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This reminds me that I need to move away from EJ as well. Have an old traditional that was never moved with my employer (now at Transamerica) and an up to date roth.

Right now my plan is to move the traditional to transamerica to have it all in one place, As for the roth, I am not sure where to move it yet.

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When I replied before, I was thinking IRA. As you are aware, SEPs are another ball game. A basic question is in your SEP IRA, is it just you OR how many employees are also part of the plan?. As I said before, I am a Fidelity customer, so what I show you is what I know. I am sure the other firms have similar capabilities.

https://www.fidelity.com/retirement-ira/small-business/sep-ira

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Holy crap. Why would anyone be willing to pay such high fees? Move your account anywhere else with low fees. Vanguard Vanguard Vanguard. Invest the money in a Target retirement fund. eg https://personal.vanguard.com/us/funds/snapshot?FundIntExt=INT&F...

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If you like the Robo-investing strategy, then look at Schwab's Intelligent Investor robo-investing with ZERO fees and ZERO commissions. Rebalancing occurs automatically. If over $50K, they do tax-loss harvesting at end of year too for no fee.

Vanguard is great too.

I think Edward Jones is a franchise business.  I see them set up in a strip mall here and there.  No wonder they charge a high 1.35% fee.

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Katsup said:   This reminds me that I need to move away from EJ as well. Have an old traditional that was never moved with my employer (now at Transamerica) and an up to date roth.

Right now my plan is to move the traditional to transamerica to have it all in one place, As for the roth, I am not sure where to move it yet.
DON'T move to Transamerica. Their choices are almost as horrible as EJ. Having all in one place doesn't make financial sense -- it will cost you more than it needs to.

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scripta said:   
Katsup said:   This reminds me that I need to move away from EJ as well. Have an old traditional that was never moved with my employer (now at Transamerica) and an up to date roth.

Right now my plan is to move the traditional to transamerica to have it all in one place, As for the roth, I am not sure where to move it yet.

DON'T move to Transamerica. Their choices are almost as horrible as EJ. Having all in one place doesn't make financial sense -- it will cost you more than it needs to.

  and also stay away from ameriprise etc

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1.35%, Really?  Who pays these charges?  Too much EJ Entertainment...

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scripta said:   
Katsup said:   This reminds me that I need to move away from EJ as well. Have an old traditional that was never moved with my employer (now at Transamerica) and an up to date roth.

Right now my plan is to move the traditional to transamerica to have it all in one place, As for the roth, I am not sure where to move it yet.

DON'T move to Transamerica. Their choices are almost as horrible as EJ. Having all in one place doesn't make financial sense -- it will cost you more than it needs to.

  OK, I will look at keeping my small EJ traditional and Roth together at a new place. Need to do some research as to which (Fidelity, Schwab or Vanguard).

Is it possible to only have the employer match go to Transamerica while having the remaining contribution go to a different traditional?  Will look into this as well.

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Katsup said:   
scripta said:   
Katsup said:   This reminds me that I need to move away from EJ as well. Have an old traditional that was never moved with my employer (now at Transamerica) and an up to date roth.

Right now my plan is to move the traditional to transamerica to have it all in one place, As for the roth, I am not sure where to move it yet.

DON'T move to Transamerica. Their choices are almost as horrible as EJ. Having all in one place doesn't make financial sense -- it will cost you more than it needs to.

  OK, I will look at keeping my small EJ traditional and Roth together at a new place. Need to do some research as to which (Fidelity, Schwab or Vanguard).

Is it possible to only have the employer match go to Transamerica while having the remaining contribution go to a different traditional?  Will look into this as well.

  
You really need to do some reading, and quick.  There is no reason to keep anything at Transamerica.

I have my self-employed 401K at Vanguard, and they handle both the employer and employee contributions, and I have my pick of any Vanguard Funds, which include every index you could possibly think of.  I also have some accounts at Fidelity, but moved all my relative's accounts from Schwab to Vanguard last year for lower costs.

There really is no reason to look further than Vanguard.

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EradicateSpam said:   There really is no reason to look further than Vanguard.
 

  True. I'm really surprised that anyone would be paying, or charging, 5% these days.

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People like OP are the ones that will be hurt most by the DOL regs.  The problem with the model OP is being presented with is that Edward Jones is historically a highly transactional business model - in other words, they get paid when they sell something.  Changing they way they're compensated to an annual fee model doesn't change their mindset, they're still going to sell OP a mutual fund, then not look at the account or talk to OP again until it's time for him to buy again with his next IRA contribution.  The net effect to OP is higher fees/commissions than he was already paying by paying a load on a mutual fund.

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Edward Jones guys here go to good neighborhoods, knock on doors and try to recruit people to open new accounts. I once (stupidly) agreed for an office visit, and the pressure to open a new account was unbelievable, just like timeshare presentations that I read about (and I have never been into one). I believe any business that goes door to door to recruit is a business to avoid (just like the roofers that stop by after every major storm). Their fee structure at that time to trade stocks was exceptionally high. Their point was this: "We have high fees, but we always beat the market".

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EradicateSpam said:   
Katsup said:   
scripta said:   
Katsup said:   This reminds me that I need to move away from EJ as well. Have an old traditional that was never moved with my employer (now at Transamerica) and an up to date roth.

Right now my plan is to move the traditional to transamerica to have it all in one place, As for the roth, I am not sure where to move it yet.

DON'T move to Transamerica. Their choices are almost as horrible as EJ. Having all in one place doesn't make financial sense -- it will cost you more than it needs to.

  OK, I will look at keeping my small EJ traditional and Roth together at a new place. Need to do some research as to which (Fidelity, Schwab or Vanguard).

Is it possible to only have the employer match go to Transamerica while having the remaining contribution go to a different traditional?  Will look into this as well.

  
You really need to do some reading, and quick.  There is no reason to keep anything at Transamerica.

I have my self-employed 401K at Vanguard, and they handle both the employer and employee contributions, and I have my pick of any Vanguard Funds, which include every index you could possibly think of.  I also have some accounts at Fidelity, but moved all my relative's accounts from Schwab to Vanguard last year for lower costs.

There really is no reason to look further than Vanguard.

  I will not get my employer match if I do not use Transamerica.

Skipping 14 Messages...
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oko said:   Edward Jones guys here go to good neighborhoods, knock on doors and try to recruit people to open new accounts. I once (stupidly) agreed for an office visit, and the pressure to open a new account was unbelievable, just like timeshare presentations that I read about (and I have never been into one). I believe any business that goes door to door to recruit is a business to avoid (just like the roofers that stop by after every major storm). Their fee structure at that time to trade stocks was exceptionally high. Their point was this: "We have high fees, but we always beat the market".
  They do this all over, act like I am your trusted neighbor so let me scam you.  Once had to run circles around the logic of investing with my neighbor.  Told him I have an IPS and a primary factor is tax sheltering/deferring with the lowest fees with broad diversification based on age and risk tolerance.  All he could counter with is that he had a hot oil stock that will have record performance.  I think this was back in the $140-150 a barrel days.  Needless to say I didn't buy into a frontloaded 5% hot oil stock and now its at 20%-30% of the value.  Saw him a couple years later at a block party, he didn't seem so eager to talk investments anymore .

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