Investing in the Digital Era: Edward Jones Financial Advisors Review
A lot has changed since 1922. That was the year that Edward Jones entered the financial services business. At that time, the creation of the Securities and Exchange Commission (SEC) was still more than a decade away.
In our Edward Jones review, we’ll look at what the firm offers today and how it compares to the digital world we currently live in. Using resources like financial advisor ratings and reviews, our Edward Jones review will provide a broad scope of the firm’s offerings.
Our Edward Jones review will break down the core services it offers and explore each one. We’ll compare the value of these services as stated by the firm with Edward Jones reviews from current and former customers. Finally, our Edward Jones review will examine how these services compare to investing without the firm as well as the impact of any fees and costs.
In total, our complete Edward Jones financial advisor review will cover the following:
- Wealth management and Edward Jones reviews
- Retirement & college planning
- Insurance & annuities
- Loan options
- Fees & costs
- Comparing Edward Jones with DIY passive management
This Edward Jones advisory solutions review will bring to the forefront an understanding of the groundswell of support for alternative do-it yourself (DIY), technologically-driven solutions to investing.
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Edward Jones Review: Wealth Management
Wealth management services should be the primary focus of any Edward Jones review – it is its core business, after all. The $6.3 billion in revenue seen in 2015 flows largely from this source. The firm has built its reputation around a focus on financial advisor ratings and reviews.
Choosing to work with this financial advisor is a solution for those who want to leave investment decisions to someone else. This is inherently risky, as (a) trust must be earned and (b) failure to meet goals incites diffused responsibility. However, Edward Jones reviews instill little confidence.
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A sample of Edward Jones reviews on consumeraffairs.org reveals a bleak picture. Forty Edward Jones reviews yield only a 1 star out of 5 on average. One Edward Jones review explains, “Knowing what I know now and with all the information and choices available today there is no way I would invest with EJ.”
These Edward Jones investments reviews are not uncommon. Another Edward Jones review laments, “The office staff was unprofessional and very rude on the phone when they answered and very demanding.” A number of Edward Jones reviews are uniformly poor. Those considering the service have reason to pause as reviews of Edward Jones are the most predictive way to gauge value.
The wealth management service, known as Advisory Solutions, allows clients to invest in a professionally managed portfolio. The initial minimum investment for this service is $50,000. Another option, the Unified Managed Account model (UMA) boasts “tax-efficient management” for those willing to invest $500,000 or more.
Any Edward Jones review should consider performance, and these services come at a cost. While they do offer some exclusive funds (Bridge Builder Mutual Funds), are they worth it?
Though our Edward Jones review of costs will come later in the article, the answer already appears to be, “no.” How can one know this without understanding the performance of each client’s account and reams of Edward Jones reviews from every customer?
The answer is revealed in the findings of a paper published by the Research Foundation of CFA Institute Literature Review. The author explains what is “important to consider is the extent to which professional traders and money managers are subject to the same behavioral biases that are more commonly discussed in the context of individual (typically assumed uninformed) investors.”
Edward Jones reviews confirm this fact. Active management falls short of indexing the vast majority of the time. When considering your own Edward Jones review, keep this fact in mind.
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Retirement & College Savings
College today is the business of loans, and business is booming. A recent article published in Consumer Reports offered this startling fact: “Almost every American knows an adult burdened by a student loan. Fewer know that growing alongside 42 million indebted students is a formidable private industry that has been enriched by those very loans.”
Those researching Edward Jones reviews should consider how the firm chooses to capitalize on this fact. Edward Jones investments reviews are critical as well, given the high rate of return needed to offset the rising cost of college.
The extent of value revealed by an Edward Jones review for 529 plans is this: “You should talk to your local financial advisor to gain his or her expertise on your situation and your state’s plan.” Much like ordinary investing, Edward Jones reviews provide little reason to believe that the firm can perform the task any better than doing it on your own. In minutes, a 529 plan can be opened and funded without the need for an “advisor.”
For those researching an Edward Jones review on retirement services, you’ll find the common offerings. Traditional IRAs, Roth IRAs, and Roth IRA conversions are all available. A $40 IRA fee applies per person per year. Our Edward Jones review reveals few problems with these options. However, the common nature of an IRA offers little reason to scour Edward Jones reviews on service. These kinds of accounts are qualified by the investments within rather that which firmed opened the account.
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Insurance & Annuities
These complicated entities are rarely seen in Edward Jones reviews. In this less common realm, there may be value in having a face-to-face conversation with an experienced professional. In a case such as this, an Edward Jones financial advisor reviews the specific needs of a retiring couple to set an annuity plan. These plans work by having the individual pay a lump sum to an insurance company. In return, regular payments are made with an agreed-upon interest rate.
An Edward Jones review reveals several offerings in this aspect of retirement planning. These multi-faceted instruments require incredible detail and a deep level of understanding on the part of the investor. Before engaging with Edward Jones, review how costs and payouts might impact your long-term plan. Some of these fees include:
- Insurance fees
- Annual contract fees
- Investment management fees
Over time, all of these fees will have an impact on your total retirement plan value. If you choose to enlist these accounts with Edward Jones, review all pertinent fine print.
A wide suite of life insurance options are available as well. The best course of action would be to use a professional insurance agent to find the best rate. If that individual’s Edward Jones review indicates a superior cost, then go for it. Otherwise, the personal touch of a dedicated financial representative at Edward Jones offers little value. Products include:
- Whole life
- Universal life
- Term life
- Variable universal life
Any Edward Jones review should include a comparison of costs only. Non-financial metrics, like the value associated with a local neighborhood office, should be ignored in your initial Edward Jones review.
Loan Offerings
Those with assets held at Edward Jones have the option of taking a personal loan against holdings. This personal line of credit is a margin account and comes with risks. In our Edward Jones review, we seek to be upfront about the nature of margin accounts.
In a margin account, your invested assets act as the collateral for a loan. Why is this risky? The value of your assets can easily decrease as the market moves day to day. If your collateralized assets drop far enough in value, repayments may need to be made earlier that you’re able.
Worse still, as the firm explains, “You may not be entitled to choose which securities or other assets in your accounts are liquidated or sold to meet a margin call.” Consider this Edward Jones financial advisor review a warning as markets behave in unexpected ways.
In the event of a sharp drop in value, certain underlying assets may need to sold to satisfy a margin call. Your Edward Jones advisory solutions review should consider the following before engaing in a margin account:
- Am I comfortable with the interest rates?
- Can I afford a market downturn?
- Are my needs critical enough to warrant this measure?
- What borrowing limit should I allow myself?
- Am I self-disciplined enough to handle this?
- Do the Edward Jones reviews give me confidence in this service?
Those who anticipate borrowing needs might be better-suited for an Edward Jones Master Card. While all the normal credit card risks exist here, you will not be subjected to the toils of the stock market. Our Edward Jones review shows only some minor benefits to its credit card. There are two cards offered:
Edward Jones World MasterCard
- APR: 13.24%
- No annual fee
- $1 to 1 point loyalty program
Edward Jones World Plus MasterCard
- APR: 15.24%
- No annual fee
- $1 to 1.5 point loyalty progrem
The national average APR reported by creditcards.com is 15.07%. Edward Jones is only slightly competitive here with its World MasterCard. In keeping with most other card offers, the loyalty points can be applied to statement credits, travel, merchandise, and gift cards. Our Edward Jones review reveals that its card service is not designed to be a competative business.
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Edward Jones Review: Costs & Fees
An Edward Jones review shows how fees are a major differentiating factor compared to going it alone. If you choose to enroll in its Advisory Solutions program, be sure you have an understanding of the costs. They include:
- Program fee of 1.35 –1.50% depending on the account
- Administrative fee of 0.09% annualized (0.30% for UMA models)
- Mutual fund expense ratios
Any Edward Jones financial advisor review should be clear: the fees make reaching success more difficult, not less. The firm justifies the fees by explaining the “professionals” involved with your finances. Other reasons include:
- “Ongoing investment advice”
- “Quarterly performance reports”
- “Dynamic rebalancing”
- “Investment model construction”
These are soft values that can be realized with the much lower cost alternative of managing your own investments with the passive strategy of low-expense ratio mutual funds. Furthermore, an Edward Jones review must acknowledge that the investment prowess of the “professionals” yields less value then their absence.
This has been proven: a semiannual report published by Morningstar compares the performance of active vs. passive management. The findings are clear: “Actively managed funds have generally underperformed their passive counterparts, especially over longer time horizons.”
With today’s technology, an investor can quickly communicate his/her goals and risk tolerance to a robo-advisor and achieve better results. Edward Jones reviews from customers show little value in the person-to-person experience.
Edward Jones Review: Comparing with DIY
Online Edward Jones reviews appear to be quite poor. Additionaly, Edward Jones investments reviews aren’t much better. In scouring reviews of Edward Jones, one particularly dissapointed customer recalls, “The Edward Jones ‘Financial Advisor’ never told us what it would cost and consistently assured he was recommending a very conservative investment strategy that was very low risk and would not risk our capital.” Comments and experiences like this lead to poor financial advisor ratings and reviews.
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Can a financial advisor within Edward Jones review your entire financial profile and outperform a simpler DIY approach? Perhaps, but the interests of the advisor will be a factor. The truth: the interests of your advisor are not always aligned with you.
If you have lacking comfort with technology, a distrust for robo-advisors or an unusually complex financial picture, then Edward Jones might be for you. However, be warned – if the financial advisor ratings and reviews don’t dissuade you, consider two chapters from the firms history.
In 2004, the SEC ordered the firm to pay $75 million in revenue sharing charges. In 2015, the SEC, once again, ordered a payment of $20 million. The SEC explained that, “they overcharged customers in new municipal bonds sales.” Make an informed choice and remember: today’s technology can offer more for less.
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