Edward Jones vs Fidelity, Ally Invest, Vanguard, Charles Schwab, TD Ameritrade, and Etrade



Edward Jones vs Vanguard and Others: Fees


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Ally Invest $4.95 $9.95 $4.95 + $0.65 per contract $0 $0
TD Ameritrade $6.95 $49.95 $6.95 + $0.75 per contract $0 $0
Fidelity $4.95 $49.95 $4.95 + $0.65 per contract $0 $0
Charles Schwab $4.95 $76 ($0 to sell) $4.95 + $0.65 per contract $0 $0
Etrade $6.95 $19.95 $6.95 + $0.75 per contract $0 $0
Vanguard $7-$20 $8-$35 $20 + $1.00 per contract $20* see

** Vanguard is charging $20 annual maintenance fee (waived if user chooses to receive statements and other information electronically).


Edward Jones vs CHarles Schwab and Others: Services


Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
Ally Invest
TD Ameritrade
Fidelity
Charles Schwab
Etrade
Vanguard
Edward Jones


Edward Jones vs Fidelity and Other Competitors


Edward Jones provides a full-service platform for investors. The firm does not offer discount, self-directed brokerage services like the other firms in this review. Incidentally, the other companies in the comparison are the seven largest discount brokerage houses in the country that offer self-directed accounts. Self-directed means that you are making investment decisions yourself, the opposite of full-service account, where all or most decision-making is handed over to the company.

Edward Jones' two main competitors, Fidelity Investments and Vanguard, are known for their own families of mutual funds and ETFs. But through these firms clients can also buy and sell stocks, options, bonds and other investments.

TD Ameritrade, Etrade, and Charles Schwab are the household names, the largest discount brokerage houses in the U.S. These companies are very popular among all investors - from beginners to institutions. Ally Invest is a twelve-year old brokerage house that's experienced rapid growth and is now big enough to be included in this comparison.


Pricing

There is a huge difference in pricing structure between Edward Jones and its competitors. Like all full service firms, Edward Jones is charging a percentage of all client's assets EVERY year as a fee - anywhere from 0.50% to 1.50%, plus an annual fee of $300. This is a huge amount to pay in fees, especially when added over the years and considering the loss of potential investment gain.

Fidelity Investments, Schwab and Ally Invest are charging for stocks and ETF's $4.95 per trade, which is below the average in the industry. As you see from the table above, Etrade, and TD Ameritrade have higher rate at $6.95 per trade. Vanguard's rate depends on client's amount invested in Vanguard products, and ranges from $20 per trade for investments of under $50,000 and all the way down to $0 for clients with over $10 million invested in Vanguard products.

Ally Invest is, again, the cheapest for mutual fund investors, with low $10 per transaction rate for transaction-fee, no-load mutual funds. Etrade charges $20 per transaction. Other companies have much higher rates: from $50 to $76 for the same trades.

There are thousands of commission-free (NTF program) mutual funds to choose from in all these firms (excluding Edward Jones). Keep in mind, that Fidelity Investments is charging a $75 short-term redemption fee for mutual funds sold less than 180 days after being purchased. There is also a $12 annual Low Balance Fee for any non-core Fidelity fund with balance under $2,000.

When it comes to additional fees, Fidelity Investments does not charge account maintenance (except $25 year for SIMPLE IRA) or inactivity fees, and does not add surcharges on penny stocks, orders with over 1,000 shares, and extended hours trading. Vanguard is charging $20 annual maintenance fee (waived if user chooses to receive statements and other information electronically).


Services

TD Ameritrade and Ally Invest offer their customers access to online investor communities, where users can see what other, more advanced members invest in or trade, create blogs and follow other members blogs, and interact with like-minded individuals. Ally Invest actually pioneered this feature among online brokers, and its community is currently the best in the brokerage industry.

TD Ameritrade and Ally Invest are the best ranking firms in customer service. Fidelity Investments and Charles Schwab also got very high ratings in this category.

All the companies in this review (except Vanguard and Edward Jones) created easy-to-use, powerful trading tools that will satisfy everyone but day-traders. But only TD Ameritrade offers professional trading platform (ThinkOrSwim) that is a must-have for very active traders as well as for forex and futures trading. It is free to use and has no access requirements.

All eight brokerage firms offer good to excellent independent investment research that will please most average investors. Fidelity and TD Ameritrade stand out from the pack, each offering investment research from twelve (!) different companies.

Because TD Ameritrade and Ally Invest created well-designed, intuitive trading screens, offer access to helpful online community (Ally Invest), largest network of local offices (TD Ameritrade), and provide award-winning customer service, we rated them the Best Brokers for Beginners.


Our Recommendations

Beginner Investors: we recommend Ally Invest and TD Ameritrade.

IRA accounts: TD Ameritrade, Ally Invest, Fidelity Investments, Etrade, and Charles Schwab.

Stocks/ETFs Traders: TD Ameritrade and Ally Invest.

Options Traders: Ally Invest.

Long Term, Inactive Investors: TD Ameritrade, Charles Schwab, Fidelity Investments, and Etrade.

Mutual Funds Investors: Ally Invest and TD Ameritrade. Fidelity Investments and Vanguard if investing mostly in their own families of mutual funds.

Small accounts: Ally Invest.

Large accounts ($1 million or more): Vanguard.


New Account Promotions

Ally Invest: Up to $3,500 cash bonus + commission free trades for new accounts.

TD Ameritrade: Trade free for 60 days + get up to $600.

Charles Schwab: Make $100,000 deposit and get 500 commission-free online equity and options trades.

Fidelity Investments: Get 500 free trades with $100,000+ deposit.

Etrade: At E*TRADE, get $6.95 trades + 65₵ per options contract.

Edward Jones and Vanguard Brokerage: None


Detailed Brokerage Reviews

Ally Invest (click here),

TD Ameritrade (click here),

Etrade (click here),

Charles Schwab (click here),

Fidelity Investments (click here),

Edward Jones (click here),

Vanguard Brokerage (click here).


Edward Jones Conflict of Interest


We discuss a conflict of interest at the company in our review of Edward Jones for U.S. customers.


Edward Jones vs Charles Schwab


Edward Jones Overview


Individual investors seeking an investment firm that they can grow into will be familiar with Edward Jones. Jones Financial Companies is the parent firm for Edward Jones Investments and Edward Jones Trust. As investor clients’ needs change, they are able to stay with the full service company through their investing years into their trust years.

Because Edward Jones caters exclusively to individual investors, its business is based on cultivating one-on-one relationships between financial advisors and clients. Edward Jones has over 11,000 offices in the US and Canada serving over 7 million investors, and most of those offices are run by a single financial advisor.


Services Provided


Ideally, the company solicits young investors looking to establish IRAs and aggressive growth investment portfolios, advises them through life changes that precipitate purchase of insurance products, and eventually grooms them for management of their wealth in trusts. But in reality, the clientele tends toward the established investor which drives the conservative style of the company.

As a full service firm, Edward Jones offers brokerage services, insurance policies for life, long-term healthcare and disability, trust management, custodial and account management including checking, debit and credit cards, as well as providing investment advisory and market information and research resources. With a full service firm like Edward Jones, an investor can be as involved in the management of his finances as he chooses from complete autonomy to full dependence upon his financial advisor.


Rates and Fees


But full service will cost the indifferent investor. Like any other full service investment firm, Edward Jones is in business to make a profit, and most of that profit comes from clients. Clients pay for the convenience of having someone else prepare the detailed research, make the recommendations, manage the accounts, etc. For example, Edward Jones charges $40 a year to manage an IRA (plus $20 per each additional IRA) and the normal transaction fees for mutual funds or 2% for stocks. Compare that to a discount broker where there is no annual fee for the account and a stock trade costs only just $4.95 at Ally Invest or $6.95 at TD Ameritrade, but the investor is left on his own to strategize his investments. Clients receive full disclosure of Edward Jones’ fee schedules for whatever type of account they open. Copies of the fee schedules are readily available in any office, and the branch office manager ensures that clients receive any updates.






Edward Jones Canada Overview


For most people looking to invest in the stock market it is a big, confusing world of intimidating terminology and fees. You can go through your bank, a do-it-yourself hosting platform or a designated investment firm like Edward Jones – who offer a variety of ways to invest your money. From fixed-income investments, individual stocks, the mutual funds that own them, to exchange-traded funds and more. If you are new to investing just the different account options can be overwhelming but whichever investment type you choose for your portfolio, it won’t be a decision you make alone.

Edward Jones encourages you to work closely with an advisor and this is a major plus compared to other brokerage firms. There are no shortage of branches in Canada (even in small towns) and getting to know your account manager face-to-face is extremely comforting when it comes to something as intimate as investments. As opposed to other bank-managed firms, it feels like a more personal experience.


Edward Jones Minimum Investment


Bonds, certificates, mutual funds, stocks and exchange-trade funds are available through Edward Jones. Some accounts, like GICs (Guaranteed Investment Certificates) are only available to investors with larger amounts of capital, as you need a minimum of $5000 to invest, but Edward Jones Canada doesn’t actually have any account minimums and offers a variety of options to those with small amounts of capital. Even $5,000 CAD for a GIC is small-time compared to the account minimums of other Canadian Banks recently put into effect.

New account requirements are sweeping across the country and are forcing many clients out of their brokerage services with banks whose account minimums now range from $100,000 CAD up to $250,000 CAD. If you have an investment account that qualifies it will continue to be managed by an actual broker, but if you don’t your account will now be placed with the account service manager, who most likely doesn’t have investment experience.

This has caused a lot of clients to seek out Edward Jones brokerage services, where you can walk in with as little as $25 and still have account options available to you. No investment minimums are a huge perk to going with Edward Jones, especially for individuals who may not have a ton, if any, investment experience but are looking to get started. Advisors are thorough when setting up your account – asking questions to learn more about what you want out of your investment (i.e. cash, income, and/or growth) as well as assessing how much risk you want to assume. If you change your mind a few months down the road, this can easily be switched with a phone call to your advisor – again, a much more personal experience than the average investor working with bank brokerage divisions.


Edward Jones Fees and Commissions


Those with an Edward Jones registered account pay an annual fee of $52.50 CAD for a mutual fund up to a maximum of $150 CAD. That means you can have more than 3 stocks or mutual funds in an account but you won’t be charged more than $150 CAD annually per account – another huge perk to going with Edward Jones over other brokerage firms. There are fees for purchasing new mutual funds but don’t expect to receive a bill for them; per trade fees are covered by the fund companies who pay Edward Jones advisors a small percentage for owning their stock.

Recently the Canadian Securities Administrators implemented new guidelines under the Client Relationship Model called CRM2 to clear up any confusion with annual brokerage fees. They now require financial institutions to be more transparent with their fee structure including operating costs, transaction costs, and third party compensation. Edward Jones will be presenting these details in annual client account summary statements.


Edward Jones Services


Of course statements can be mailed, but for those who prefer to access an account online it can be a pain having to login to a different platform than the one you already use for online banking. This tends to discourage investors from checking on their accounts regularly and being involved with their investments. Edward Jones platform is user friendly once you logon but don’t forget your login ID; unlike if you forget your password – which you can reset via email – if you forget your user ID, you’re going to have to call a 1-800 number and go through security questions to receive it. Hopefully these minor issues in user-friendliness will be cleared up with the serge of new clients their sure to see once Canadian banks raise their account minimums.


Summary


Of course no stock or mutual fund is a guarantee and you are always capable of losing – like any other investment – but one of the biggest benefits to using Edward Jones is the diversity in investment options with low account fees. You feel in control when selecting your risk level and investment type thanks to the ample amount of support advisors provide.


Updated on 3/17/2018.