Time for a story, which includes a few valuable lessons about handling money. I hope by sharing that it will prevent someone from getting into a similar situation or staying in this position too long if you could be getting out of it.
About a 15 months ago I opened up accounts with Edward Jones. I thought with the increase in stocks and cash under my control, and the minimal time I had to handle it, that I would like assistance from a financial advisor.
I set up two accounts with Edward Jones at the end of 2017. One was their Guided Solutions Flex Account, in which the client and advisor work together to set a portfolio objective and then keep that portfolio balanced along the established guidelines. The portfolio is diversified according to range of percentages of each of these types of investments: cash, income, growth and income, growth, aggressive, and international. For example, my suggested range for growth and income investments in my portfolio was 50% to 65%. My advisor suggested several stocks, bonds, and mutual fund choices that would balance the risk out across the account to get me started.
I also opened a traditional Brokerage Account with Edward Jones at the suggestion of my Edward Jones Financial Advisor. One reason for this was that I held a lot of stock in one particular company that I didn’t intend on selling all at once. The other, was that I knew I would have a large sum of money coming into the account once I sold my house later in the year. I thought of this more as the holding account and the Guided Solutions as the active account.
At the end of May 2018, I opened a Traditional IRA with Edward Jones to take care of the retirement funds I received from my ex-husband as part of our divorce settlement. This account was set up as a Guided Solutions type account and I let my advisor handle most of the investment decisions. This is not something I would ever do again. I hadn’t quite learned the lesson yet, to know exactly what you are buying into before you buy it and to not trust anyone else’s choices without doing your own research. She made some fine choices, but had I been paying closer attention I would have realized: not all of them were picks that I would have made or ones I would have bought at that particular purchase price or that I wasn’t willing to pay that expense ratio when other similar funds had lower ratios. Yes, she did run everything by me before she made the purchases, so it was completely my own fault that I did not investigate each investment more closely. Always do your own research!
My advisor did me a favor by having me open the brokerage account because of the way that fees are handled in the Guided Solutions account. There were no trading or commission fees, but there was a monthly Program Fee of 1.31% on the account value for the Guided Solutions account. When I opened the account at the end of 2017/beginning of 2018, my fees were just above $100 per month. So when I began it seemed reasonable for the value that was being provided and the help I was getting with diversifying my portfolio and selecting investments.
My house was sold in May 2018 and I moved the profits I earned to my Edward Jones brokerage account. As I worked with my advisor throughout the summer on how to invest this money, large sums were transferred into the Guided Solutions account to buy stocks, mutual funds and ETFs. Stock prices began rising in the summer of 2018, as did the asset value in my Guided Solutions account. Accordingly, my fees increased, and along with the added investments from my house sale profits, I began to see monthly fees upward of $400 in this account. Even when the market dipped down in December 2018 and early January 2019, I paid $420 for the program fee in January 2019. Check out this chart below on the fees I paid in 2018 on my Guided Solutions account. I was shocked when I calculated these fees together and learned I had spent $3230 on fees in 2018!
I wondered if it would be better to be using the brokerage account more frequently and asked my advisor in October 2018 about the trading fees. They were $4.95 flat fee per trade, plus commission of around 2.5% of the value of the stock being purchased. So on a $3550 stock order I wanted to place, I’d be charged a commission of $83.75! At this point, I was beginning to wonder for what? Lesson learned, be aware of all fees!
After my house was sold and my move was completed, in the summer and autumn I did the due diligence on my financial investments that I should have been doing earlier. I picked out a few investments that I wanted to sell. They weren’t things that I would have chosen myself. Then, in December, my Edward Jones advisor left the company. I was assigned to the other advisor in the office. I met with her and we went through the risk assessment process and checked in on my financial goals. She made a few good changes to my portfolio.
But I was getting frustrated with working with Edward Jones, because every single purchase must be confirmed over the phone with the advisor. I missed a couple good stock price entry points because of this delay in getting my orders entered. I also missed getting a limit order filled on a REIT I liked because my original advisor had put the price in 10 cents too low and the REIT only just dipped into (what should have been) my buying range briefly. I wanted the freedom to place my own orders online and I felt ready to take on the full responsibility of my portfolio myself, especially now my portfolio was built up and I wanted to just maintain it. Everything I’d bought already I was planning to hold for at least a few years. Now, I was researching every new purchases myself. I’m not expecting another large lump sum of money to come into my life that would require outside guidance and if it were to happen, I am feeling completely confident that I can handle it on my own now.
Given all of those points, I figured I would look for somewhere to transfer my IRA and that maybe I would transfer some of my investments back to my old unused E*Trade account. But that quickly turned into deciding that I would just close all my Edward Jones accounts and migrate them elsewhere when I realized how much happier I would be to be 100% in control of my investments again. Edward Jones had served the purpose I needed it for — helping me get my portfolio built up and balanced — but I no longer required their expensive guidance. I want to be free of paying exorbitant fees for holding my assets in the Guided Solutions account or paying high commissions when making trades with them on my brokerage account.
Look for my next post discussing what I did with my Edward Jones accounts and the benefits of moving my accounts to different companies.
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