Edward Jones Review

Edward Jones is a massive private asset management firm with headquarters in St. Louis. It has more local offices nationwide than any other U.S. investment firm, with roughly 15,000 locations in North America. Edward Jones’ primary focus is managing portfolios for individuals and families.

Assets under management (AUM): $654,235,011,481

Minimum investment: Varies by account type

Individual investor-to-advisor ratio: 166:1

Fee structure: A percentage of AUM, other fees

Headquarters: 12555 Manchester Road St. Louis, MO 63131 Phone: 314-515-2000 Edward Jones website and SEC Form ADV

All information included in this profile is accurate as of April 29, 2022. For more information, please consult Edward Jones’ website.

Overview of Edward Jones

Investment banker Edward Jones Sr. created the eponymous firm in 1922 in St. Louis. Edward Jones’ roots are in the brokerage industry, as it first registered with the Securities and Exchange Commission (SEC) as a broker-dealer in 1941, and then as a registered investment advisor in 1993. Edward Jones’ parent company, The Jones Financial Company L.L.L.P, has more than 24,000 Edward Jones associates holding limited partnerships.

Today, the firm has roughly 15,000 locations throughout the U.S. and parts of Canada. The firm’s philosophy is to serve clients through local offices, where advisors live and work in the area and can meet with clients face-to-face. The team includes over 19,000 employees who perform investment advisory or research functions. Many of the firm’s advisors are also licensed as registered representatives of broker-dealers and/or insurance agents.

Types of clients

Today, the vast majority of Edward Jones’ clients are individuals, though it also serves a number of high net worth individuals, who the SEC defines as investors with at least $750,000 under management or a net worth of at least $1.5 million.

Services offered

Portfolio management is the main offering of Edward Jones’ investment advisory division. Depending on how involved a client wants to be, they can choose from a range of account options.

Clients who are looking for guidance on how to invest their money but prefer to call the shots themselves will want to look at the Guided Solutions funds, which steer you to certain investments based on your objectives but leave you in charge of how you allocate your money across those funds, and responsible for all buying and selling decisions. On the other end of the spectrum, clients who prefer to take more of a hands-off approach and leave much of the day-to-day management up to their advisor can consider the Advisory Solutions accounts.

The firm also offers employers assistance in managing their employer-sponsored retirement plans. Advisors do not offer standalone financial planning services, such as creating a written retirement plan.

Most of the firm’s advisors are also registered as broker-dealers, so they can place individual trades for brokerage clients and earn commissions separate from these programs. Many Edward Jones advisors are also licensed insurance agents and can sell annuities as well as life and disability insurance.

Outside of their advisory services, the firm assists families with trusts and estates. Their specialized Client Consultation group provides insight to clients and their financial advisors on complex topics such as retirement income, business sale and succession, and portfolio tax management.

Here is a full list of services offered by the firm:

• Investment advisory services and portfolio management (wrap fee accounts; discretionary and non-discretionary, tax sensitive)
• Education accounts
• Retirement accounts and generating retirement income
• Insurance, annuities and risk management
• Employee benefit plan fiduciary services and pension consulting
• Brokerage services
• Trusts and estates
• Business sales and succession
• Selection of other advisors

Investment strategy

Clients initially fill out a profile with information about their goals, time horizon and risk tolerance. Based on their answers, the firm will recommend a specific Account Portfolio Objective, such as all-equity focus with the highest growth potential, or an income focus with little growth potential. Clients also can choose an alternative objective if that’s available.

Next, clients or the advisor, depending on the account, will choose from the firm’s list of handpicked eligible investments for that objective. Objectives for Guided portfolios may include:

• All-equity focus
• Growth focus
• Balanced toward growth
• Growth and income
• Balanced toward income
• Income focus

Edward Jones handpicks eligible investments, both affiliated and unaffiliated, that are available in the accounts Portfolios are allocated across a variety of asset classes, and investments used may include stocks, bonds, mutual funds and exchange-traded funds (ETFs).

Edward Jones’s fees

For its Guided and Advisory accounts, Edward Jones charges an asset-based fee based on how much you have invested with the firm and the services provided. The flat fee is based on a tiered schedule, ranging from 1.35% for your first $250,000 invested down to 1% or less for $1.5 million or more invested.

For clients who choose the hands-off Advisory Solutions accounts, giving Edward Jones discretionary authority to make transaction decisions, you’ll owe an additional fee, with the rate depending on the size and type of account, as outlined in the table below.

These accounts are wrap accounts, meaning you pay one bundled fee that typically includes the advisory fee as well as transaction costs. One exception is if another broker-dealer is used for the trade, clients may owe transaction costs.

Regardless of which account type they have, clients still owe third-party fund fees, such as mutual fund fees and ETF fees. Fees are deducted from client accounts each month. Keep in mind you can always buy and sell investments individually through an Edward Jones brokerage account, and pay commissions and transaction costs instead of a flat fee.

Disciplinary disclosures

The firm has faced dozens of disciplinary charges over the last 10 years, many of which they settled with regulators by paying fines, without admitting to or denying the charges. Many of the charges are for failing to adequately supervise individual brokers and advisors, including:

• Issues around the sale of traditional and non-traditional ETFs, relating to oversight and compliance procedures. The firm was fined $200,000 and paid $51,581.25 in restitution to clients.
• Issues with municipal bond pricing. The firm paid approximately $5.2 million to current and former customers and a civil money penalty of $15 million.
• Violations with respect to mutual fund purchases and sales charge waivers for certain retirement plan and charitable organization accounts. The firm provided approximately $13.5 million in remediation to customers.
• Municipal securities transactions below minimum denominations. The firm paid a $210,000 fine.
• Supervision of the use and dissemination of reports from financial advisors. The firm paid a $725,000 fine.
• Violations around telephone solicitation calls in New Hampshire. The firm paid a total of $750,000 including costs, an administrative fine and funds for investor education.

Becoming a client

1. Find an advisor in your area: To find advisors in your area, use the search tool provided at edwardjones.com.
2. Sign a client agreement: Before an advisor can begin providing services, you’ll need to sign a client agreement and fund your account with the minimum investment required. An advisor supervisor may call you to confirm that you understand the fees you’re paying.
3. Have annual check-ins with your advisor: Once you’re up and running, your advisor should have annual check-ins with you to discuss if anything has changed with your goals and objectives, as well as your appetite for risk.
4. Get your account rebalanced as needed: Some accounts include an annual rebalancing feature. For other accounts, you will have to notify Edward Jones to realign your account within the required time frame.

Locations

Edward Jones has roughly 15,000 locations across North America. The firm’s website offers a convenient advisor search tool.

Is Edward Jones right for you?

Edward Jones may appeal to a broad swath of inexperienced as well as sophisticated individual investors, as it has multiple offerings and allows clients to choose their level of involvement with their accounts. In particular, clients looking for a local financial advisor in their community who does not require a seven-figure investment may want to take a look at Edward Jones.

Since advisors can earn commissions by recommending certain products, be sure to find out why they are suggesting certain products and how much they may earn if you sign up. You should also understand that Edward Jones has multiple disciplinary disclosures, although this is more common for huge firms such as this one. And if you are looking for intensive financial planning services, Edward Jones isn’t for you, as it focuses on portfolio management.

Even if Edward Jones isn’t the right fit for your needs, MagnifyMoney can help match you with a firm that may be more ideal. Take a step to get matched with the fiduciary advisor you deserve today.