EDJ $25 Rollover Fee
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........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.
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?Move your mf assets to the fund companies…
That's some pretty harsh langauage, Spears.Move your mf assets to the fund companies…
Most places have a fee to close an IRA. Mine is $75. Doesn’t EDJ have a policy against opening new acct’s direct?
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 $95 at AGE/Wach. I know that I've moved assets from other firms in non IRA accounts and they've dinged them on the way out too. Borker - did you know that if it bothers you that much, you can pay that fee? They can take it right out of your earnings if you want them to. I don't know that I would if I were you, but it is possible. Every time I open a new IRA account I make sure I point out that schedule of fees and show them anything that might possibly happen in their accounts. That way if they decide to leave, I can at least say, you know when you opened this account I told you... Maybe you should start referencing that sheet with your new accounts.Sorry Broker24…I will clean up my postings…Borker…call your local LPL recruiter and discuss your options…
Yeah, because LPL doesn’t have those fees. They’re the perfect firm.
Actually the fee at LPL is 40$...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...
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.
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!!!!!Yeah, because LPL doesn’t have those fees. They’re the perfect firm.
[quote=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?[/quote] 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.If you liquidate, they will automatically deduct the fee. The fee structure has changed a bit in the past year.
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.Spiff - yup, it’s actually a written company policy.
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)!
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.
[quote=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?[/quote] 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.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!Money in motion…That should be Jones’ tagline instead of making sense of investing…MONEY IN MOTION…the devil is in the details…but when you deal with unsophisticated investors…well…lets just say the details are glossed over…except for Spiffy…he tells them everything.
[quote=WestH]
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![/quote] Why would you bother with a $1500 IRA and if you did open one why in the heck would you take it with you? If the answer is that they have $500,000 with in other stuff then the IRA is free to begin with.[quote=Maxstud]
Why would you bother with a $1500 IRA and if you did open one why in the heck would you take it with you? If the answer is that they have $500,000 with in other stuff then the IRA is free to begin with.[/quote]So you're saying that once you waive the IRA fee it's no big deal since those charges now only total about 11% instead of 14%?? I must be misunderstanding your post, Max.
Its all about making it to expensive to transfer an account. If they cared about the client, EDJ would “suggest” that their reps put all mutual fund accounts directly with the fund company. In the case of the IRA there would be a $10.00 annual fee, not $40.00. In addition, as stated earlier, God forbid, clients would not have to pay the latest EDJ fee of $50.00 to transrfer to another BD. If you really care about the client you don’t find ways to add fees, and you sure would not try to keep clients by making it cost prohibitive to move. If they want to move, let them leave on good terms, maybe they will return someday. As they are treated now, most would never return.
the 50.00 IRA closing fee is NOT necessary to charge the client at Jones! Just call Ret Ops, they’ll tell ya: YOU OPEN A SINGLE ACCT AND ATNF TRANSFER THE IRA CASH TO IT. Then you do the distribution from the single account. Presto!!! no 50.00 fee.
C, mon Spiff---beat you to the punch on this easy one.exactly, and same goes for the annual fee (assuming the policy hasn't changed in the last year.)
[quote=Morphius]
[quote=Maxstud]
Why would you bother with a $1500 IRA and if you did open one why in the heck would you take it with you? If the answer is that they have $500,000 with in other stuff then the IRA is free to begin with.[/quote]So you're saying that once you waive the IRA fee it's no big deal since those charges now only total about 11% instead of 14%?? I must be misunderstanding your post, Max.
[/quote]
No my real point is why would you bother to take a $1500 IRA and if you did why in the world would you transfer the business after you left!
[quote=newnew]the 50.00 IRA closing fee is NOT necessary to charge the client at Jones! Just call Ret Ops, they’ll tell ya: YOU OPEN A SINGLE ACCT AND ATNF TRANSFER THE IRA CASH TO IT. Then you do the distribution from the single account. Presto!!! no 50.00 fee.
C, mon Spiff---beat you to the punch on this easy one.[/quote]So EJ ops recommends the client take a distribution from his IRA for the sole purpose of avoiding a silly EJ fee?!
Now there's a tax efficient, tail-wagging-the-dog response!
[quote=Maxstud]No my real point is why would you bother to take a $1500 IRA and if you did why in the world would you transfer the business after you left!
[/quote]
Because that was a specific example cited in an earlier post.
Are you saying who cares what fees EJ assesses clients because you, as the FA, can simply turn down the client’s business or leave them behind when you jump ship? I can see how that might get you as the FA off the hook, but what about the client mentioned in the earlier post?
WestH - First, if I was taking on a $1500 account and that’s all the client had, I wouldn’t be using A shares. I’d most likely be using B shares, possibly C’s. And I’d be doing it at the fund company, not at Jones. Once the account grew to an acceptable size, I might consider moving it back to Jones. But it would have to be worth my time to do it.
BTW, your assumptions are a little off. There is a $40 annual fee. The FA might buy A shares. But if the FA immediately closed the IRA for some reason, the closing fee would only be $50. If you're going to bash Jones, you should at least know what you are talking about. Oh yeah, if we did that same thing at Raymond James it would cost the client over 15% ($40 annual fee, 5.75% A share, $100 IRA termination fee), at LPL it would cost 13% ($35 annual fee, 5.75% A share, $75 termination fee). The fact is Jones is well below the industry average on those kind of fees. Retirement Ops does NOT recommend taking a taxable distribution to avoid a fee. I'm not sure I follow how the moving of the IRA cash to the single account then doing the transfer would solve the IRA closing fee issue. Maybe the caffeine hasn't kicked in yet this morning. You still have to close the IRA, which triggers the $50 termination fee and the $40 fee if it hasn't already been paid. Or you have some empty IRA accounts on your system constantly reminding you of clients who have left you. My thoughts on transfers and IRA closings - I do everything I can to make my clients happy. If something goes so wrong with the relationship that they want to find another advisor, they'll be happy to pay the closing fee just to be rid of me. They're happy that they have a new advisor they feel they can trust and I have one more little chunk that hits my P&L. I don't lose that many clients, so this hasn't been that big of an issue.Try and understand the point Morphius, the example is STUPID!!! Don't take $1500 IRAs, send them to Vanguard! Yes, the FA should turn down $1500 IRAs because the fees DON'T make sense at that level, you are acting in the prospects best interest. By the way every full service brokerage has similar fees if this upsets you so much maybe you can start a movement against the industry, talk to Bill Singer. I try and and stay out of these EDJ threads but when the examples used have absolutely no basis in reality I break down and reply, 9 out of 10 times I don't post it because just like in real life talking with idiots is a waste of time. On the other hand Roadhards post about advising on a HSA and charging an hourly rate is a GREAT example of where EDJ is lacking in services we can offer our clients and a great reason to keep an open mind. I look forward to any logical response you might have, but I expect silence when the point I make is COMPLETELY logical.[quote=Maxstud]No my real point is why would you bother to take a $1500 IRA and if you did why in the world would you transfer the business after you left!
[/quote]
Because that was a specific example cited in an earlier post.
Are you saying who cares what fees EJ assesses clients because you, as the FA, can simply turn down the client’s business or leave them behind when you jump ship? I can see how that might get you as the FA off the hook, but what about the client mentioned in the earlier post?
Assuming there is a reason to accept the $1,500 IRA, I'll agree that it makes sense to do them direct and avoid all the B/D fees that make them cost-prohibitive.
[quote=Morphius] [quote=Maxstud]No my real point is why would you bother to take a $1500 IRA and if you did why in the world would you transfer the business after you left!
[/quote]
Because that was a specific example cited in an earlier post.
Are you saying who cares what fees EJ assesses clients because you, as the FA, can simply turn down the client’s business or leave them behind when you jump ship? I can see how that might get you as the FA off the hook, but what about the client mentioned in the earlier post?
I look forward to any logical response you might have, but I expect silence when the point I make is COMPLETELY logical. [/quote]
mmmm I hear crickets...........join the anti jones pussy brigade when logic trumps rhetoric
you all disappear.
Ret Ops dose not recommend the dist just to avoid the fee-- I was saying that if the client was gonna take out the money ANYWAY, might as well avoid the fee.
Spiff-call 'em.
Imagine the total amount of fees that is earned by IRA custodians for holding mutual fund only accounts. That’s gotta be about the easiest money that has ever been earned.
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