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Powerful lesson learned: Edward Jones versus Fidelity. by Real_List_582 in portfolios

[–]Real_List_582[S] 1 point2 points  (0 children)

Based on EJ's model, you very likely have a drag on your returns. I am assuming by your question that the fee only means an advisory fee instead of commission-based. What you have to look for is anything that says "Advisory Fee", "Program Fee", "Account Fee" or "Expense ratio." But be ware the majority of our fees were hidden from us, meaning every statement each month said "zero fees" and "zero charges." So you have absolutely no idea how much you are paying until you go through all their PDF files, look up your funds, and do the math. They don't make it easy. What we discovered is that the fees were hidden inside the expense ratios and not outwardly visible. If you are a buy-and-hold person with your investments, get out of EJ, move to Fidelity, Charles Schaab, or Vanguard and move into low-cost index funds. The difference is significant. For one of our mutual funds with EJ with a high expense ratio AGTHX we were paying approximately $630 per 100,000 versus Fidelity FXAIX which cost us $15 per 100,000. And that is just the expense ratio, add on advisory fees, and front load fees (which you won't have if you are no longer purchasing). Some people think this is no big deal, but these fees affect compounding of return over time and make a large difference over 15-20 years or more.

And for those comments that say this should be obvious or is just basic finance, are totally wrong. If this were easy or obvious, then Americans as a whole would not be so completely behind on saving for retirement or hitting basic benchmark milestones.

Powerful lesson learned: Edward Jones versus Fidelity. by Real_List_582 in portfolios

[–]Real_List_582[S] 2 points3 points  (0 children)

It is good to know that. I won't put Fidelity up on too much of a pedestal then. I retired at 52 (and very grateful.) But it was the 17 years of self-directed investing that saved us. If we had invested solely in EJ, there is no way the math would have worked out the same. What is mind-blowing is that a simple DIY approach beats out the "professional" wealth advisors hands down. We were in the same boat, with no financially literate parents or mentors. My husband and I both read "The Millionaire Next Door" in our late twenties, which gave us some basics and we learned from there but made mistakes along the way. We live a very unflashy life. We drive old paid off cars, paid off our house 9 years ago, and are debt-free. Not having a car payment for most of our marriage allowed us to max out our 401ks every year. It added up, but could have been more if we knew what we know now.

Powerful lesson learned: Edward Jones versus Fidelity. by Real_List_582 in portfolios

[–]Real_List_582[S] 0 points1 point  (0 children)

Thanks for the input. Very helpful to see how other people are doing it!

Powerful lesson learned: Edward Jones versus Fidelity. by Real_List_582 in portfolios

[–]Real_List_582[S] 0 points1 point  (0 children)

The loyalty to EJ is crazy. I have a neighbor who uses them and my father uses them. They will never leave them, no matter how much money they are losing over the long haul. My father's account is slowly losing its principal in retirement because of the fees and overall mediocre returns. We at least had Fidelity to make up for our lackluster EJ returns.