Edward Jones: The Full-Service Approach
Edward Jones is a full-service brokerage represented by local advisors with the ability to invest, provide
retirement planning, prepare taxes, and offer access to an enormous base of research and qualified
experts. Unlike many brokerages, they do not provide any personal banking services.
With Edward Jones, depending on your local representative, your level of service will depend largely on
how involved you want to be with your investments. Most advisors, in addition to monthly statements,
will offer quarterly or biannual meetings to discuss performance. Some agents are well-known for being
exceptionally proactive and providing great service to their account holders. Each advisor’s asset
management is largely guided by the company’s investment philosophy of maintaining a healthy mix of
stocks, bonds, and actively-managed mutual funds (mutual funds that receive regular updates to
achieve above-market returns). Additionally, Edward Jones steers agents away from advising clients to
take on “hot buys” or companies without long histories of financial stability. The underpinning of every
Edward Jones financial strategy is a long-term investment with a solid return.
One of the best features of Edward Jones is their extensive network of local representatives; in fact, with
over 11,000 offices nationwide, most small- to mid-sized towns will be home to at least one Edward
Jones advisor. Most agents stick to Edward Jones’ open-door policy and if you relocate, it’s easy to move
your finances with you.
Online Account Statements
Edward Jones offers all the convenience of a monthly statement without the waiting or the waste. The firm regularly updates online account
statements, so that account holders can review their investment performance at the touch of a button. Another important benefit of the online
access feature is the ability to export tax information regarding your investment account(s) at any time.
No Online Trading
Edward Jones’ absence of online trading may be irritating to the savvy investors that want to easily
manage their own funds. To the beginner, however, this lack may be a blessing in disguise. The official
company position is to forego online trading to avoid rash or ill-advised investment decisions, which is in
keeping with the Edward Jones philosophy regarding long-term investing.
Edward Jones Fees and Commissions
With a $40 annual fee on IRAs, plus a 2% fee on stock trades, dollar cost averaging and reinvested dividends, Edward Jones' fees and commissions
are comparable to other full-service brokerages (e.g. Wells Fargo, Morgan Stanley, Merrill Lynch, etc.). But when it comes to discount online
brokerages (e.g. TradeKing, TD Amerirade, etc.)
Edward Jones is not competitive on price.
List of all Edward Jones' fees is located under this link.
Edward Jones agents are also “fee-based” as opposed to “fee-only” advisors. In short, Edward Jones
advisors receive commissions for selling their clients stocks, bonds, and mutual funds with a sales load
(as opposed to no-load funds). This compensation strategy may lead to some conflicts of interest in
regard to investment advice, particularly in situations where the best investment strategy for the
account owner doesn’t reflect the best compensation for the advisor.
The other potential conflict of interest lies in Edward Jones’ revenue sharing policy. Edward Jones
financial agents receive revenue sharing payments from certain fund companies; this type of policy
almost inevitably leads to preferential treatment of those funds when agents go to advise their clients.
The Sales Pitch
One of the most distinctive features of Edward Jones is their knack for showing up on your doorstep,
asking for the privilege of managing your money. Advisors undergo intensive training designed to
educate them on how to go door-to-door in their community to discuss their neighbors’ investment
strategies and offer the Edward Jones philosophy as a supplement or alternative. This often breeds a
love or hate relationship with the firm, as it can be perceived as personal attention or annoying sales
Edward Jones Pros
- Local representatives provide expertise through face-to-face service
- Online portal offers instant access to account statements
- Long-term investment strategies promote financial well-being
- No online trading may prevent novice investors from making rash decisions
Edward Jones Cons
- High commissions compared to online discount brokers
- Revenue sharing and commissions create conflicts of interest
- No online trading may frustrate experienced investors
Edward Jones Review Summary
In the world of investing, the only individual that has your best interests at heart is you; however, since
many of us lack the time and/or financial savvy to manage our own investments, we often find ourselves
compelled to turn to an expert. In short, if you are capable of taking a lead role in managing your investments, you can
certainly find a cheaper brokerage than Edward Jones; however, if you are a new or time-strapped
investor looking for a breadth of investing knowledge (and aren’t afraid to say no to biased advice) then
Edward Jones may be the right choice for you.
For anyone who is worried about conflict of interest at Edward Jones, there are a number of alternatives. First, online brokers such as
TD Amerirade which also offers managed portfolios is a great
option. Second alternative is choosing a company from Full service broker list
that doesn't have a conflict of interest, for example Personal Capital.
Updated on 3/28/2017.