EDJ $25 Rollover Fee

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Apr 6, 2008 9:27 pm

I recently had a former BOA of Edward Jones bring her rollover paperwork to me, giving me yet another reason to despise the Green Empire.  The paperwork asks for you to give your IRA account number at EDJ to perform the rollover.  If you do not have an EDJ IRA, they ask you to name an IR that you would like to have contact you about your rollover.  The last choice on the form is to do a rollover with a custodian other than EDJ.  If you choose this option, they're nice enough to let you know that you'll be jacked $25 on the way out the door for making such a decision.  Un-freakin'-believable! 

 
In all the years I have been in this business, I have never seen any former employee of any company anywhere in the world be charged an additional fee for selecting a custodian of their choosing.  Attention all class action attorneys, I think I may have discovered yet another very, very easy payday for you courtesy of the shamelessly greedy GPs at EDJ........
Apr 7, 2008 4:22 pm

At first I didn't believe you.  But we've switched to a new 401K providor recently, so I had to check for myself.  I have a former EDJ employee as a client and we are rolling over her 401K to American Funds.  You are correct on the $25.  Even with this client if we roll it to American Funds with me as the broker of record the fee gets charged.  I'm shocked too.  I don't know if that money goes to Mercer or to EDJ.  Regardless, it is a little petty. 

Apr 7, 2008 4:33 pm

I had a client call me the other day who had an emergency and needed all of the money from her IRA. (Something like $1500.) My BOA asked me if we should leave $40 for her annual fee that was due, or withold $90 from her distribution and then close the account. 

 
It's been a long time since I've completely closed an IRA, so I'd forgotten about Jones's fee to close one, and I just about lost it when she mentioned the additional $50 we were going to charge the poor lady.
 
At what point does this nonsense end?
Apr 7, 2008 4:35 pm

Move your mf assets to the fund companies...

Apr 7, 2008 4:45 pm
bspears:

Move your mf assets to the fund companies...

 
That's some pretty harsh langauage, Spears. 
Apr 7, 2008 5:10 pm

Most places have a fee to close an IRA. Mine is $75. Doesn't EDJ have a policy against opening new acct's direct?

Apr 7, 2008 5:50 pm

No policy against opening accounts direct.  I do it most of the time for smaller IRAs.  Or for those people who have a fit about the $40. 

 
According to the spreadsheet we have on our system, the Jones annual and termination fees are normal for the industry.  It says the annual fee at LPL is $35 and the termination is $75.  It's $40 and $100 at RJ.  $50 and $95 at AGE/Wach.  I know that I've moved assets from other firms in non IRA accounts and they've dinged them on the way out too.  
 
Borker - did you know that if it bothers you that much, you can pay that fee?  They can take it right out of your earnings if you want them to.    I don't know that I would if I were you, but it is possible.  Every time I open a new IRA account I make sure I point out that schedule of fees and show them anything that might possibly happen in their accounts.  That way if they decide to leave, I can at least say, you know when you opened this account I told you...
 
Maybe you should start referencing that sheet with your new accounts. 
 
Apr 7, 2008 5:57 pm

Sorry Broker24...I will clean up my postings...Borker...call your local LPL recruiter and discuss your options...

Apr 7, 2008 6:03 pm

Yeah, because LPL doesn't have those fees.  They're the perfect firm. 

Apr 7, 2008 6:09 pm

Actually the fee at LPL is 40$...EDJ's needs to update their info, except when you transfer in more than 25k, then it is waived the first year.  Also, you don't pay the fee when initially fund or transfer in your IRA.  Never understood why Jones did this, except to rape the client royally...

Apr 7, 2008 6:19 pm

I'm surprised by that, Spiff. Where I sit, it's a serious offense. I understand we'd be forced to watch our 30 second commercial spots over and over again, but for no more than 4 hours(because more than that could be considered cruel and inhumane).



The firm regards it as a huge liability because all of our compliance rules shoot through our networked system.

Apr 7, 2008 9:33 pm
Spaceman Spiff:

Yeah, because LPL doesn't have those fees.  They're the perfect firm. 

Wow, sarcasm...... It is really weird, all of the things that I used to sell at Jones, I can still sell at LPL in spite of that scary letter they sent to my clients.....Oh, I mean Jones clients until they sign that transfer paperwork.  It would seem the best firm wouldn't have to resort to tactics, but maybe that is just me.....  One day, Spiff, you shall see!!!!!
Apr 7, 2008 11:40 pm
Borker Boy:

I had a client call me the other day who had an emergency and needed all of the money from her IRA. (Something like $1500.) My BOA asked me if we should leave $40 for her annual fee that was due, or withold $90 from her distribution and then close the account. 

 
It's been a long time since I've completely closed an IRA, so I'd forgotten about Jones's fee to close one, and I just about lost it when she mentioned the additional $50 we were going to charge the poor lady.
 
At what point does this nonsense end?
 
Borker, it's possible I'm misremembering this, but if you send her all of the money and wait until the fee comes due next year then Jones will just close the account.  When I was at Jones I was under the assumption that I didn't have to pay a closing fee to close an inactive account.  I did this quite a few times. 
Apr 8, 2008 8:53 am

If you liquidate, they will automatically deduct the fee.  The fee structure has changed a bit in the past year.

Apr 8, 2008 9:58 am

Ashland - you mean your compliance department would get involved if you opened an IRA at the fund company?  That seems strange to me.  I don't open a lot of them at the fund company, but it does happen from time to time.  Nobody has ever questioned it. 

 
noggin - I'm amazed at how much better of an advisor you've become in just the last three weeks since you left Jones.  That Vulcan mind meld you did with spears must have paid off for you.  You know, I don't mind taking some ribbing  from some of the vets who left Jones and have been indy for a long time.  They've earned their stripes and have a bit of history to make an arguement that indy is better.  But, you're so new to the indy world that you don't yet know what you don't know.  Maybe you'll like it.  I hope you do.  But once the honeymoon period is over, you might find out that Jones wasn't a bad place to be.   
Apr 8, 2008 10:03 am

Spiff - yup, it's actually a written company policy.

Apr 8, 2008 10:35 am

When I left Jones and went Indy--Mercer charged me $50 to roll my 401k and $50 to roll the profit sharing--yes, two different charges when you leave Jones!  As for the direct IRA's at the fund companies--if you have someone who is nothing but mutual funds in a Edward Jones 90,000 account--you can move them back to the fund companies without a charge or transfer fee from Jones as long as Jones remains the broker of record.  Then later when you leave Jones and come to my Indy house you pay no transfer fees since all you are doing is a change of broker dealer!  Even if you are going to stay at Jones--if you have someone in nothing but American Funds or Putnam -- whatever, you will be saving them money by sending it back to the fund company!  By the way you can send back the non qualified funds directly on your computer (sorry I mean terminal--Jones doesn't trust you with a computer)!

Apr 8, 2008 4:10 pm

Good move on Jones part to get a real 401k provider. I could never understand why "the force" was out selling the Hartford Cornerstone 401k because it had every preferred fund in it, offered online access and automated statements, turn-key enrollment, etc., and we Jonesites were getting a 401k statement that was printed on a dot matrix printer from 1984.

Apr 8, 2008 4:35 pm
Borker Boy:

I had a client call me the other day who had an emergency and needed all of the money from her IRA. (Something like $1500.) My BOA asked me if we should leave $40 for her annual fee that was due, or withold $90 from her distribution and then close the account. 

 
It's been a long time since I've completely closed an IRA, so I'd forgotten about Jones's fee to close one, and I just about lost it when she mentioned the additional $50 we were going to charge the poor lady.
 
At what point does this nonsense end?
 
My recollection is that if you close the account, they hit you with the fee.  If you leave any amount in the account, say $5, the account it stays open.  When the annual fee is due they give you the option to close the account and forfeit the balance.  They may have closed this loophole in the last couple of years, but it may be worth a try if you are so inclined.
Apr 8, 2008 5:44 pm

Let's see:


Opening a $1500 IRA at Jones:


If a Mutual Fund: 5.75% load, $35 annual fee = 2.33%, $90 closing fee = 6%,
TOTAL = 14% fees already.
 
Earlier poster was right.  Keep it direct at the Mutual Fund company. 
That way when you go Indy, just change the B/D over, no charge. 
Priceless!