How Edward Jones Benefits From Your Investments

Edward Jones is a full-service investment firm with a wide range of investment advisory services, brokerage services, and other products. The company has a large number of financial advisors and serves millions of clients. While the firm's fees may seem steep when compared to several discount brokers or robo-advisors, some may find the wide range of services and personalized approach of their financial advisors worth the money. The fees depend on the type of program and products chosen. For example, the Guided Solutions Flex Account has a minimum of $25,000, while there is no minimum asset requirement for the Point in Time Financial Planning Service. Edward Jones offers various account options, including taxable brokerage accounts, traditional IRAs, Roth IRAs, 401(k)s, and college savings accounts. The company's investment philosophy typically involves a buy-and-hold strategy, prioritizing long-term growth.

Edward Jones' fees and commissions

Edward Jones is a full-service brokerage firm operating across the U.S. and Canada. The company has a number of fees that depend on the type of account you choose. A Select Account, for example, incurs commissions on investments. For all other account types, the broker charges a Program Fee that's a percentage of the value of your account.

The management fee, also referred to as the "program fee", is based on a tiered system. The more assets in your account, the lower the fee percentage. The fee begins at 1.35% for an investment of $250,000, scaling down to a rate of 0.50% for assets valued over $10 million. So, for example, if you have $250,000 in assets, you will be charged an annual fee of $3,375. If you have $10 million in assets, you will be charged an annual fee of $50,000.

In addition to the management fee, there are also portfolio strategy fees for all broker-provided advisory solutions. These fees are charged at the upper end of the broker's services and won't apply to lower-value investors. They begin at 0.09% for the Advisor Solutions Fund Model and 0.19% for the Advisory Solutions UMA Model, cutting down to a rate of 0.05% for the top AUM band.

Select Account clients are charged trade commissions whenever they buy or sell assets. The commission varies depending on the type of asset.

It's worth noting that Edward Jones' fee structure has been described as "very complicated and abstruse".

There are also some additional costs to be aware of. For example, it costs $75 per year just to have an IRA with Edward Jones, and they charge a 2% load on dividend reinvestment of a stock. There is also a $100 termination fee if you decide to leave.

While Edward Jones' fees may seem steep when compared to several discount brokers or robo-advisors on the market today, some may find the wide range of services and personalized approach of their financial advisors worth the money.

The pros and cons of Edward Jones

Edward Jones is a financial services firm that provides investment advice and guidance to individuals, families, and businesses. The company has a long history, dating back to its founding in 1922, and is known for its reliable track record and independent investment advice. With over 15,000 branches and nearly 19,000 financial advisors, Edward Jones services more than seven million clients in the US and Canada.

The Pros

• Personalised advice: Edward Jones offers individualised advice tailored to each client's financial situation, goals, and risk tolerance.
• Wide range of services: The firm provides a broad range of services, including financial planning, retirement planning, and wealth management.
• Strong client relationships: Edward Jones prioritises building strong client relationships, with advisors available to offer ongoing advice and guidance.
• Diverse investment options: Clients can choose from a variety of investment options, including stocks, bonds, mutual funds, and exchange-traded funds (ETFs).
• Convenience: With branch offices in many locations, clients can easily meet advisors in person.
• Technology: Edward Jones has invested in its digital strategy, offering clients access to tools like Financial Foundation to plan and track their financial journeys.

The Cons

• High fees: Edward Jones charges higher fees and commissions compared to other financial advisory firms, with a 1.35% fee for Flex and Fund Accounts. These fees can significantly impact investment returns and are often considered not worth the level of service provided.
• Limited services: The company only focuses on three main areas: investments, insurance, and personal financial planning.
• Limited website functionality: The Edward Jones website may not offer the same level of functionality as other investment firms' websites.
• Controversies: The company has faced controversies in the past, including a $75 million regulatory settlement in 2004 for not disclosing conflicts of interest and a lawsuit in 2018 for brokers switching customer accounts to earn higher commissions.
• Proprietary products: Edward Jones may recommend proprietary products like mutual funds or insurance, which can limit options and returns for clients.
• Sales tactics: Some clients have reported pushy salespeople and a focus on commissions rather than providing the best products for clients' needs.

Edward Jones' investment philosophy

Edward Jones is a full-service investment firm with a wide range of investment advisory services, brokerage services and other financial products. The firm's investment philosophy is centred around a buy-and-hold strategy, prioritising reliable, long-term growth over short-term gains.

The company offers a variety of account types and service offerings, and its investment philosophy may vary depending on the client's chosen strategy. However, the overarching theme is a commitment to long-term investment prospects.

Edward Jones's investment philosophy is also deeply personalised. The company recognises that no two investors are alike and offers a variety of account options, from hands-on accounts that put the client in control to choices with built-in guidance. The firm is committed to helping clients make smart decisions with confidence and to bringing them closer to the future they envision for themselves and those around them.

The firm reviews the universe of stocks, bonds and mutual funds to select quality options for its clients. It believes that stocks can be an important part of an investment strategy, as they allow investors to buy a small piece of a company and its future. Edward Jones also offers fixed-income investments such as bonds, CDs and other investments that pay interest in fixed amounts at specified times.

The company also helps clients build a diversified portfolio tailored to their financial goals, risk tolerance, asset allocation and timelines. It offers a range of investment products, including exchange-traded funds (ETFs), unit investment trusts (UITs), and insurance products to protect against unexpected events.

In summary, Edward Jones's investment philosophy is centred around long-term growth, personalisation, and a commitment to helping clients make smart decisions and achieve their financial goals.

The types of Edward Jones accounts

Edward Jones offers a variety of account options, allowing you to choose how you want to work with them. These accounts range from hands-on accounts that give you control, to options with built-in guidance. Here is an overview of the types of Edward Jones accounts:

Edward Jones Select Account

The Select Account provides a portfolio framework, allowing you to decide how to build and manage your investments. It offers a wide range of investment choices, including stocks, bonds, certificates of deposit (CDs), mutual funds, exchange-traded funds (ETFs), and annuities. There is no minimum investment for this account, but some investments within the account require minimum purchase amounts. With a Select Account, you pay a commission when you buy and sell certain investments, and some investments may have internal expenses in addition to a sales charge.

Edward Jones Guided Solutions®

This program offers two types of accounts: the Guided Solutions Fund Account and the Guided Solutions Flex Account. Both accounts provide ongoing investment advice, guidance, and services for an asset-based fee. The Fund Account has a minimum investment of less than $5,000 and permits investment in eligible mutual funds and ETFs. The Flex Account also permits investment in eligible stocks, and for accounts of $50,000 or more, individual bonds and CDs.

Edward Jones Advisory Solutions®

This is a wrap-fee program that provides investment advisory services for an asset-based fee. Depending on the client's minimum investment, they can choose between Fund Models and UMA Models. Fund Models allow clients to select a portfolio objective and delegate day-to-day investment decisions to a team of research analysts. UMA Models are designed for clients who want to leave day-to-day investing decisions to professionals and potentially benefit from tax efficiencies.

How to open an account with Edward Jones

Opening an account with Edward Jones is a straightforward process. Here is a step-by-step guide on how to get started:

• Find a Financial Advisor: Begin by researching and browsing the financial advisors at Edward Jones using their search tools. You can find an advisor that suits your needs and preferences.
• Share Your Contact Information: Once you've found an advisor you'd like to work with, share your contact information through their profile page. They will then reach out to schedule a complimentary consultation.
• Meet with the Financial Advisor: During this consultation, you will meet with the financial advisor either virtually or in person. Here, you will discuss your financial goals, assets, investing style, and review account types and investment options available to you.
• Open Your Account: After finding the right financial advisor and deciding on the type of account that suits your needs, your advisor will help you open your account and set up your online access.
• Online Access: To access your account online, you will need to verify your identity. This includes providing information such as the last four digits of your Social Security number, your date of birth, and your Edward Jones account number.
• Explore Investment Options: With your account set up, you can now explore the various investment products offered by Edward Jones. This includes stocks, bonds, mutual funds, exchange-traded funds (ETFs), and more.
• Work with Your Advisor: Your financial advisor will work closely with you to create an investment strategy tailored to your goals and provide ongoing guidance to help you stay on track.

Remember, investing is a personalized journey, and Edward Jones offers a variety of account options to suit your preferences. Whether you prefer a hands-on approach or want to delegate decision-making to professionals, Edward Jones can help you navigate the process and work towards your financial goals.

Frequently asked questions