Is Edward Jones a Good Place to Invest?

Is Edward Jones a Good Place to Invest?

Edward Jones Review, Complaints, and Background

The brokerage business Edward Jones offers financial guidance. The company is able to offer a personalized approach to its clients in the regions it serves thanks to its several sites around the United States. Before choosing a company to work with, look into the history and reviews of Edward Jones as well as those of other businesses.

What Is Edward Jones?

Founded in 1922, Edward Jones is a full-service company. By placing advisors in numerous locations across the United States, it adopts a personal approach to invest. It offers retirement planning assistance and financial guidance.

The company established locations across North America to grow its seven million-strong customer base. It operates more than 16,000 locations around the nation with more than 41,000 financial advisors and other staff members. The majority of offices are small.

Edward Jones made an effort to be the “advisor next door.” It aims to establish enduring relationships with its clients based on trust. For clients who are preparing for retirement and other long-term goals, it frequently makes use of mutual funds and a straightforward approach of creating diversified portfolios.

Should You Invest With Edward Jones?

Location is a factor when deciding whether to invest with Edward Jones. Trusting the local advisor should come before trusting the company, and you should get along well with your advisor.

How a potential advisor is paid should be one of your first inquiries. Revenue-sharing agreements with a network of mutual fund companies are used to pay Edward Jones.

Load mutual funds with a wide selection of primarily top-notch funds, like American Funds, are frequently used by Edward Jones. Through different mutual fund share classes, these funds have different pay structures. They could be load-waived funds with 12b-1 fees, front-load funds, or back-load funds.

No-load funds, which may be preferable for investors to load funds with sales commissions, are not the only ones in which Edward Jones invests client money. No matter how much you trust someone, it’s important to understand mutual fund costs before investing.

Edward Jones Reviews and Complaints

Although Edward Jones is a well-known company that represents Main Street investors, its past is not free of scandal or client complaints.

Allegations that the company hadn’t reported conflicts of interest in 2004 were made against it. It was claimed that Edward Jones neglected to inform clients that the funds being recommended to them were chosen as a result of the money they made to Edward Jones. The decision was not reached after a thorough review. With the SEC, Edward Jones reached a $75 million settlement.

A federal case was then brought against Edward Jones in 2018. According to complaints, the company “pressured its more than 16,000 brokers to move their customers’ commission-based brokerage accounts into advisory accounts that charge as much as 2 percent of assets yearly,” who make up the majority of the firm’s clientele. Over 1% of assets is the national average for fee-based advisors.

Although Edward Jones’ corporate culture has changed significantly since these lawsuits, it is still best to exercise caution when selecting an advisor and follow the “buyer beware” maxim.

The Bottom Line

By investigating a company’s history, investors can complete their due diligence. Ask the advisor questions. Inquire about their approach to investing. Find out how they are paid.

Frequently Asked Questions (FAQs)

Is Edward Jones a fiduciary?

Edward Jones provides fiduciary services, but unless the plan specifically states otherwise, you shouldn’t presume that your service has a fiduciary commitment. For instance, the retirement plan services cost covers fiduciary advice for that plan, although other plans may not always do the same.

What is Edward Jones’ source of income?

A variety of fees on its plans and services are how Edward Jones generates revenue.

Trading accounts generate revenue for the company in the form of trade commissions. In addition to other fees and costs, Edward Jones makes money from guided and advisory services through a program charge of 1.35 percent on total assets.

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