Edward Jones product paying 6.5%

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Dec 6, 2011 3:14 pm

Has anyone heard of a product Edward Jones is selling that pays 6.5%, monthly check for 5 years and is "safe"? I have a 71yr old client that has some CDs coming due and the local EJ rep is pitching him hard on this product.

Dec 6, 2011 3:27 pm

No such thing.  Must be a mutual fund that pays monthly.

Dec 6, 2011 8:22 pm

The only thing I can think of is that it is a bond with 5 years left..but if it's a 6.5% bond..they are probably going to have to pay a healthy premium.  Don't worry..with EJ's sorry bond inventory..it was probably gone in 20 minutes.  Purely my opinion..

Dec 6, 2011 10:06 pm

Probably the Franklin Income Fund

Dec 7, 2011 8:37 am

thanks for the responses, I asked my client to get something in writing and waiting to hear back. He said it was not a mutual fund, I am thinking a VA product. EJ sells them as A shares so they can walk anytime. If this is true, the EJ rep is pushing his luck on that.

Dec 8, 2011 11:07 am

Possibly an annuity.  if so it has more moving parts than your automobile, and is the most expensive investment product available.  Safe?  Well, after all it is "guaranteed," by the issuing insurance  company.

Dec 8, 2011 9:39 pm

I would guess Annuity or more likely a UIT.  

The annuities are not even paying 6.5 now (not immediates, at least).  I have seen multiple UITs going around yielding 7 and even 8.  Guggenheim has a couple and Blackrock has one as well I think (believe its a utilities one).  

The issue, as you know, is that they push YIELD but don't talk about what the principle is going to do, considering its tied to the market.  

Dec 9, 2011 8:45 am

I am waiting to hear back from some current EJ reps that I used to work with. This is an older client and I do believe he is only hearing the YIELD info, like they teach you at EJ.

Dec 9, 2011 11:11 am

Probably an immediate annuity from PacLife.  The older the client, the higher the payout. I've seen 80 year olds get 10% or more out of the deal.  

Dec 12, 2011 8:16 am

I just found out Friday that he is selling UIT's from First Trust and INVESCO, I am calling both companies to see if they have prinicipal guarantees on these. The UIT's I sell do not. His clients will be in for a big supprise.

Dec 12, 2011 12:58 pm

I'm 99.9% sure they don't. 

Dec 12, 2011 1:34 pm

found out no principal protection. The rep is selling the five year call protection on these. It is a tax exempt municipal income trust series 273.

Dec 12, 2011 2:50 pm

He's also selling the tax eq. yield it would seem.  Shady!  There is also quite a prem. spread on Jones UITs these days.

Dec 13, 2011 9:42 am

so tnrep...what happened when you told them?

Dec 13, 2011 11:16 am


so tnrep...what happened when you told them?


I am letting the CPA tell them, it is the CPA's client. She will be referring them to me after she meets with him.

Dec 15, 2011 12:28 pm

Often times I have found in this business, the "client" hears what they want to hear. This business does have a lot of "bad advisors" but in most situations it is the client who is the snake.