Edward Jones Investment Review

The investment world is awash with many top-quality robo-advisors, offering both low minimum investment requirements and super low investment management fees. Those accounts will work well for the vast majority of investors. But if you’re a high net worth individual, with a large investment portfolio that you don’t feel like managing yourself, you may be better served by a full-service, traditional investment broker, like Edward Jones.

What is Edward Jones?

Edward Jones was founded in 1922 and is based in St. Louis. The company is one of the largest full-service investment management firms in the U.S. They have nearly 7 million customers, and according to their website, they have more offices than any other investment firm in America. Globally, they have more than $1 trillion in assets under management.

With the appointment of Penny Pennington as the firm’s managing partner in 2019, Edward Jones is the only major U.S. brokerage firm led by a woman.

The company focuses primarily on individual investors and small business owners. They operate through a network of offices staffed by financial advisors and offer both commission-based and fee-based financial products. When you work with Edward Jones, you’ll be appointed a financial advisor then work with that broker exclusively.

Edward Jones’ one-on-one business model is similar to investment brokerages before discount brokers became popular. As an investor, you’ll work with an advisor who will provide investment advice and portfolio management for you, as well as financial planning advice and coordination if it’s needed.

Related: Best Online Financial Advisors

Edward Jones Product Features

The specific features offered by Edward Jones depend on the service you select, and the level provided.

Edward Jones Guided Solutions

This service level gives you the advantage of being able to make decisions about your investments, but with guidance from your financial advisor. You’ll also be provided with tools to help you manage your investments.

There are two programs available under Guided Solutions:

Edward Jones Guided Solutions Flex Account: You’ll work with your financial advisor to create a portfolio, as well as to provide the securities and funds to buy or sell. However, all final investment decisions will be made by you. Edward Jones can assess your investment goals, time horizon, and risk tolerance, and help you to develop a portfolio that will work within those parameters. You’ll be able to invest in stocks, exchange traded funds (ETFs) and mutual funds.

Rebalancing is handled manually by you and your investment advisor, though you’ll receive alerts generated by advanced technology letting you know when to make necessary adjustments.

This account requires a minimum investment of $25,000, but the minimum increases to $50,000 if you also want to hold individual bonds and certificates of deposit in the account.

Edward Jones Guided Solutions Fund Account: The investment strategy is similar to the Flex Account in that you’ll work with your financial advisor to build your portfolio. And once again, all decisions on what to buy and sell, and when, will be up to you. As the account name implies, you’ll invest exclusively in ETFs and mutual funds.

With this plan option, your portfolio will be rebalanced annually. But you’ll also be able to make changes in your portfolio allocations as often as monthly.

This account option has a minimum initial investment of $5,000 to open an account.

Edward Jones Advisory Solutions

Edward Jones Advisory Solutions allows you to choose from more than 90 researched models, each with a mix of mutual funds and ETFs.

This program level also has two plans:

Edward Jones Advisory Solutions Fund Models: Under this plan, you’ll choose a fund model, after which your investments are chosen and managed for you by a team of investment professionals. Your portfolio can contain a mix of ETFs and mutual funds that will be automatically rebalanced.

The minimum initial investment requirement is $25,000.

Edward Jones Advisory Solutions Unified Managed Account (UMA) Models: This is similar to the Fund Models in that you will work with a financial advisor to determine the best investment model for your investment objectives, time horizon, and risk tolerance. But once you do, your portfolio will be managed by investment professionals.

UMA Models include mutual funds and ETFs, as well as separately managed allocations (SMA), which are professionally managed individual stocks and bonds. The purpose of SMAs is to add tax efficiencies and flexibility to your account. Your portfolio will be monitored and automatically rebalanced when it strays from target allocations.

The minimum initial investment requirement is $500,000.

Trust Company

This is an investment option that provides estate planning and trust services. You’ll work with your Edward Jones financial advisor who can provide you with access to a team of professionals dedicated to servicing your trust account. Edward Jones works in partnership with local professionals to assist in the preparation and management of your trust account.

There is no flat-fee structure since each professional involved in the process will have their own unique fee schedule.

Client Consultation Group

Client Consultation is available for more complex financial situations. Your financial advisor will work with other professionals within Edward Jones, as well as with tax and legal professionals from outside the company.

They provide consulting for specialized areas, like retirement income planning, tax-sensitive portfolio construction, and business sale/succession considerations.

Once again, the fee structure will depend on the consultation level needed, as well as fees charged by outside professionals.

Other Edward Jones Financial Services

In addition to investment planning and management, Edward Jones also provides the following financial services:

Edward Jones Money Market Fund: This is a money market that comes with both check writing and a Visa debit card. You can also make electronic funds transfers and set up direct deposit into the account. Unlike a bank money market account, the Edward Jones Money Market Fund is a professionally managed fund of quality short-term investments.

Savings accounts: Edward Jones offers their Insured Bank Deposit Program offering FDIC insured savings accounts for up to $2.5 million for an individual, and $5 million for a joint account. This is done by distributing your savings to up to 10 or 20 individual banks, to gain the benefit of each institution’s FDIC insurance coverage.

This program also provides access to your funds through check writing and a debit card, as well as electronic transfers to external accounts. There are no initial minimum deposits required.

Interest rates paid on the program are as follows:

Learn More: Best Money Market Rates

Credit cards and loans: Edward Jones offers personal credit cards, debit cards (tied to your Edward Jones Money Market Fund or Insured Bank Deposit account), business credit cards, and personal lines of credit, taken against the value of margin-eligible investments in your account.

Check writing: This capability is also tied to the Edward Jones Money Market Fund or Insured Bank Deposit account. It comes with free, unlimited checking, including one complimentary order of 20 checks. If you’re qualified, you’ll also have the ability to write your own loans using a check.

Edward Jones Pricing & Fees

Edward Jones’ pricing and fee structure depends on the investment program you select. Pricing and fees are as follows for each program:

Edward Jones Guided Solutions – both Flex and Solutions Fund Account:

The above fee structure is all-inclusive, which means it also includes trading costs, performance reporting, and evaluation and selection of investments. However, it does not include internal expenses for mutual funds and ETFs, which is common with all managed investment portfolio plans in the industry.

Please note that the minimum fee is $10 per month on the Flex Account only.

In addition to the advisory fee schedule above, you’ll also pay a Portfolio Strategy Fee for Edward Jones Advisory Solutions plans, as follows:

For Edward Jones Advisory Solutions Fund Models:

For Edward Jones Advisory Solutions Unified Managed Account (UMA) Models:

Promotions: Edward Jones is not offering any sign-up promotions at this time.

How to Sign up with Edward Jones

Because of the one-on-one relationship between investors and financial advisors, the sign-up process with Edward Jones is different from that of many automated investment platforms.

The process often takes place at an Edward Jones branch location. You’ll meet with a financial advisor who will get to know you and your investment goals. You’ll have an initial meeting, which will include questions from the financial advisor to determine your investment goals, time horizon, and risk tolerance.

You’ll then discuss which type of account option to choose, as well as the fees associated with those choices. Since each investment plan is client-specific, your investment portfolio will be personalized.

You’ll need to supply existing investment account statements, tax returns, and even life insurance policies. Your Edward Jones financial advisor will be looking to provide holistic financial advice, which will require a picture of your entire financial situation.

In opening an account, you should expect to provide your full name, physical address, email address, phone number, Social Security number, and a valid government-issued photo ID for identification purposes.

Edward Jones Security

Edward Jones employs various security measures, including standard firewalls, encryption, and detection capabilities. They also test their security systems regularly to address potential weaknesses. All employees are continuously trained in information safeguarding, and the company regularly consults with outside security firms to maintain top-level security.

All accounts are insured against broker failure through the Securities Investor Protection Corporation (SIPC) for up to $500,000 in cash and securities, including up to $250,000 for cash. Additional coverage is provided through Underwriters at Lloyds, for up to $900 million.

Mobile Support and Accessibility

The Edward Jones mobile app is available on the App Store for iOS devices, 10.3 or later, and is compatible with iPhone, iPad, and iPod touch. It’s also available on Google Play for Android devices, 7.0 and up.

The mobile app provides you with access to your account, as well as daily market information, and Edward Jones locations across the country.

Customer Service and Support

Customer service and support are provided primarily at the local branch level. But they do offer toll-free assistance, which is available Monday through Friday, from 7 a.m. to 9 p.m., and weekends, from 8 a.m. to 4 p.m., all times Central.

Edward Jones Pros and Cons

Edward Jones Alternatives

Based on the minimum initial investment requirements and high fees, Edward Jones may not be a suitable investment choice for the vast majority of investors. But not to worry – there are plenty of alternatives, with both lower investment upfront minimums and much lower fees.

(Personal Capital is now Empower)

Empower comes the closest to matching the personalized service level of Edward Jones. They offer a free version that lets you aggregate your many financial accounts on the platform. There, you can take advantage of plenty of tools to help you better manage your finances and your investments. But if you have at least $100,000 to invest, you can take advantage of human-guided investment selection and management, starting at fees as low as 0.89% per year.

Betterment is perhaps the most popular robo-advisor in the industry. You can open an account with no money at all and begin investing as you fund your account. Betterment charges a reasonable annual advisory fee at just 0.25% of your account value. Your portfolio is created after completing a questionnaire to determine your investment goals, time horizon, and risk tolerance.

The portfolio will be constructed of ETFs invested in U.S. and international stocks and bonds. All you need to do is fund your account, and Betterment will handle all investment management for you, including periodic rebalancing. They also offer a cash option that pays much higher interest than Edward Jones.

With an account balance of at least $100,000, you’ll also have access to live financial advisors.

Wealthfront works much the way Betterment does, but with a wider selection of investment alternatives. They also invest your funds in stock and bond ETFs but also include real estate and alternative investments. On larger account balances, you can even include individual stocks in your portfolio. The minimum initial investment is $500, and the annual advisory fee is 0.25% on all balances.

Wealthfront also offers a high-interest cash option, as well as socially responsible investing and smart beta investing.

It should also be mentioned that both Betterment and Wealthfront offer tax-loss harvesting on all taxable accounts.

The alternatives above primarily deal with investment management. One option that certainly should be considered is taking advantage of a robo-advisor for investment management. You’ll get all the same services as a full-service investment broker/financial planning company but at a lower cost and lower net worth requirement.

What Others are Saying About Edward Jones

Edward Jones has an “A” rating from the Better Business Bureau, which is the second-highest rating on a scale of A+ to F. There have been only 53 customer complaints filed against the company in the past three years, which is insignificant considering the millions of consumers the company works with.

The company has 4 stars out of 5 on Consumer Affairs, based on reviews by 104 consumers. The reviews are generally positive, with the stability of a dedicated advisor being cited as the primary advantage. There is some indication, however, that the quality of service varies with the branch and the advisor.

Edward Jones has a rating of 2.3 out of 5 stars based on reviews by 629 iOS users on the App Store. The company has a slightly better rating of 3.1 stars out of 5 from 831 Android users on Google Play.

Honest Recommendation on Edward Jones

In considering the many investment options now available, including online investing, discount brokers, and robo-advisors, Edward Jones is designed for a relatively narrow slice of the investing public. This is probably by design since they continue to cater to higher net worth individuals by providing boutique investment services.

My thinking, however, is that most investors are primarily concerned with investment return. Due to the heavy customization of Edward Jones investment portfolios, it’s not possible to know how well their investing strategies work. There is certainly considerable validation by the fact that the company services accounts for more than 7 million investors.

But the question becomes, how do those investment results stand against other investment services, particularly robo-advisors?

The other two issues are fees and investment minimums. Edward Jones’ fee structure is well above what’s typically offered by robo-advisors. The 1.35% annual advisory fee on accounts below $250,000 is more than a full percentage point higher than the typical 0.25% advisory fee charged by robo-advisors. That has the potential to substantially reduce your net investment returns.

The lowest minimum initial investment of $5,000, which is for the Edward Jones Guided Solutions Fund Account only, is many times higher than the $0 to $500 minimum initial investment required by most robo-advisors.

In general, the vast majority of investors can be better served by a robo-advisor. They provide much the same investment service, but with much lower – and sometimes non-existent – minimum initial investment requirements, and much lower fees.

Who is Edward Jones For?

Edward Jones will work best for the following investors:

• Those who want to invest, but either prefer to turn the job over to a financial advisor, or at least receive substantial guidance in the process.
• High net worth individuals, with larger portfolios, can take advantage of lower advisory fees for larger accounts.
• Individuals with more complex financial situations, who may need the benefit of financial planning and trust services.
• Anyone who prefers good, old-fashioned face-to-face contact with their investment advisor at a local branch.

Overall, Edward Jones seems best suited to those who have large amounts of money to invest but prefer either a hands-off or heavily assisted investment process.

Bottom Line

Edward Jones represents traditional stockbrokers. They were much more common 50 years ago, before the advent of discount brokerages, online investing, and robo-advisors. They rely primarily on direct assistance from a dedicated investment advisor and even offer a large network of brick-and-mortar branches. It’s an excellent choice for anyone who desires the older, more traditional style of investment brokers. But most other investors will be better served by robo-advisors.

Empower Personal Wealth, LLC (“EPW”) compensates Webpals Systems S. C LTD for new leads. Webpals Systems S. C LTD is not an investment client of Personal Capital Advisors Corporation or Empower Advisory Group, LLC

DoughRoller receives cash compensation from Wealthfront Advisers LLC (“Wealthfront Advisers”) for each new client that applies for a Wealthfront Automated Investing Account through our links. This creates an incentive that results in a material conflict of interest. DoughRoller is not a Wealthfront Advisers client, and this is a paid endorsement. More information is available via our links to Wealthfront Advisers.