Unique EJ situation

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nedsaid
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Re: Unique EJ situation

Post by nedsaid »

arcticpineapplecorp. wrote: Sun Dec 05, 2021 6:10 pm
nedsaid wrote: Sun Dec 05, 2021 5:25 pm Not to wax theological here but we live in a fallen world with all kinds of moral imperfections. Everyone has their own ideas where the ethical and moral line is in their lives but if I insisted that all the companies that I did business with acted 100% in accordance with my standards, it would be hard to do business anywhere. There are ethical and moral dilemmas.

The Catholic Church issued a lot of Baptismal Certificates to Jewish people during World War II. It is really a sophisticated form of lying and deceit, Jewish people pretending to be Catholics but the actions saved many thousands if not hundreds of thousands of lives. I could say, I don't want anything to do with an organization that practices lying and deception but when you consider the alternative was Auschwitz for these people I am glad in this case that the rules were bent. If the moral philosophers had won the day and if the Church decided that lying and deceit were unacceptable under any circumstances then I suppose people could have felt good about strict adherence to moral principles but many thousands more people would have died.

It was also against the law to harbor people who were being sought for arrest by the authorities but people of all persuasions decided that it was better to obey a higher law and save lives. Should those who harbored people being sought for arrest have been reported themselves? Did the person who turned in the Frank family to the authorities feel good about sending them to their deaths?
these examples are one's where people were helped, not harmed. nobody was harmed by this deceipt. but the OP will be harmed if the EJ guy takes an action to stop the future gifts being received.

the EJ guy by your examples above is the Nazi, not the Church. You sure you want to make that argument?

I'm glad for those who engage in civil disobedience when people's freedoms, liberties and life is under harm.

The EJ guy is not engaging in any act of civil disobedience.

He's going against his ethical duty to his client.

not sure how you can argue with that.

sure life is complicated and nuanced.

This situation really isn't. The EJ guy is in the wrong if he breaks privacy and confidentiality. Not sure how you can actually defend that. Nor why you'd want to.
Okay. The EJ guy (or gal) should face the choice of being burned at the stake or being drawn and quartered. As for the giver, 50 lashes with the whip for sloppy estate planning. :wink: Are you satisfied now?

I am trying to make a broader point with my examples, the analogies that I am using don't perfectly fit the situation. What I am saying is pick your battles carefully and that there are moral dilemmas that exist in life. This is a battle that the original poster could take on, the costs would be high and the benefits pretty low. Even if he "won", not sure what would be gained here, there is such a thing as a Pyrrhic victory.

What the Original Poster could do is talk to the Advisor again and remind him or her of the duties to maintain confidentiality and leave it at that. This is not the stuff of Bernie Madoff. I did read in other threads that the Edward Jones Advisor is a Certified Financial Planner, so he or she is subject to the confidentiality rules that Financial Planners must abide by.

I learned is that this is happening in a small town, and yes there are additional pitfalls with that. I am reminded that my folks wouldn't have an account with a certain local bank because things didn't always stay secret. In later years, they did establish an account there I suppose their concerns had subsided.

Don't see huge issues here, in other threads it looked like the Original Poster was well on their way to a solution.

I think I am done here. Thank you.
A fool and his money are good for business.
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scsu74
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Re: Unique EJ situation

Post by scsu74 »

:idea:
nedsaid wrote: Sun Dec 05, 2021 1:39 pm
arcticpineapplecorp. wrote: Sun Dec 05, 2021 1:16 pm
So that appears to be a violation of confidentiality and should be reported to the SEC.

the EJ "friend" has no right to talk to another client about the OP's acct unless the OP gave permission to do so.

If there's nothing in writing that the OP signed there's no way the giver has the right to know what he did with the money and for the Ed Jones "friend" to tell another client about the OP's account is egregious.

some things are more important than money. If he's doing this with the OP, what is he doing to others and is there a responsibility to stop that from happening??

we don't know if the rep is a CFP or not, but here's the CFP rules on confidentiality:
Confidentiality and Privacy

A CFP® professional must keep confidential and may not disclose any non-public personal information about any prospective, current, or former Client (“client”), except that the CFP® professional may disclose information:
For ordinary business purposes:
With the client’s consent, so long as the client has not withdrawn the consent;
To a CFP® Professional’s Firm or other persons with whom the CFP® professional is providing services to or for the client, when necessary to perform those services;
As necessary to provide information to the CFP® professional’s attorneys, accountants, and auditors; and
To a person acting in a representative capacity on behalf of the client;
For legal and enforcement purposes:
To law enforcement authorities concerning suspected unlawful activities, to the extent permitted by the law;
As required to comply with federal, state, or local law;
As required to comply with a properly authorized civil, criminal, or regulatory investigation or examination, or subpoena or summons, by a governmental authority;
As necessary to defend against allegations of wrongdoing made by a governmental authority;
As necessary to present a civil claim against, or defend against a civil claim raised by, a client;
As required to comply with a request from CFP Board concerning an investigation or adjudication; and
As necessary to provide information to professional organizations that are assessing the CFP® professional’s compliance with professional standards.
A CFP® professional may not use any non-public personal information about a client for his or her direct or indirect personal benefit, whether or not it causes detriment to the client, unless the client consents.
A CFP® professional, either directly or through the CFP® Professional’s Firm, must take reasonable steps to protect the security of non-public personal information about any client, including the security of information stored physically or electronically, from unauthorized access that could result in harm or inconvenience to the client.
A CFP® professional, either directly or through the CFP® Professional’s Firm, must adopt and implement policies regarding the protection, handling, and sharing of a client’s non-public personal information and must provide a client with written notice of those policies at the time of the Engagement and thereafter not less than annually (at least once in any 12-month period) unless (i) the CFP® professional’s policies have not changed since the last notice sent to a client; and (ii) the CFP® professional does not disclose non-public personal information other than as permitted without a client’s consent.
A CFP® professional shall be deemed to comply with this Section if the CFP® Professional’s Firm is subject to, and the CFP® professional complies with, Regulation S-P under the federal securities laws or substantially equivalent federal or state laws or rules.

source: https://www.cfp.net/ethics/code-of-ethi ... of-conduct
He may have also violated the Conflict of Interest clause as well.

it's not like no Ed Jones rep ("friend") has ever had disclosures on their ADV Part 2:
https://adviserinfo.sec.gov/search/genericsearch/grid

first one I saw for general search on Ed Jones shows a $450,000 settlement (even though the damage amount requested was $5000). :oops:
Yes there is a breach of confidentiality here and that is a problem. A big problem.

The Edward Jones Advisor probably has various securities licenses but probably not a Certified Financial Planner status. Since the original poster is paying commissions, this would be under the Broker/Dealer and the suitability standard and not under the RIA and the Fiduciary standard. So the Advisor is not under the rules that Certified Financial Planners use. But there still is an issue with confidentiality.

If the Original Poster is paying commissions, there is no Assets Under Management fee involved.

Still, I would graciously accept the gift. No guarantee there will be any inheritance.
He lists CFP on his profile on the EJ website.
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scsu74
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Re: Unique EJ situation

Post by scsu74 »

arcticpineapplecorp. wrote: Sun Dec 05, 2021 12:55 pm
TJat wrote: Sun Dec 05, 2021 11:21 am
Katietsu wrote: Sun Dec 05, 2021 10:48 am
scsu74 wrote: Sun Dec 05, 2021 10:29 am It gets really bad when you realize she paid that on initial investment, we're paying it on the gift investment and 4 other family members she's gifting to are also each paying another 5%. 30% total he's making 😱
Maybe it will make you feel better to realize that the % does not change with more family members. Still just 5-5.75%.
Earlier OP mentioned the gifts were transferred in as cash. This makes me think the EJ advisor is coercing the gifted to liquidate her shares, gift the money, and have her require the recipient buys back in. If true, and to me (and I think his licensing ethics board), this is grossly unethical.
for those who don't understand the problem with this, imagine this EJ "friend" got the 5.75% commission from the giver originally when she purchased her shares. Then she liquidates and the OP has to buy those funds again (or new funds) and the EJ "friend" gets another fat 5.75% commission.

nice work if you can get it.
Yep, that's what I was trying to explain and what I have a problem with. Might have worded it incorrectly. He's getting the 5.75% 8 seperate times.
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nedsaid
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Re: Unique EJ situation

Post by nedsaid »

scsu74 wrote: Sun Dec 05, 2021 6:52 pm
He lists CFP on his profile on the EJ website.
Yes, I did see that on another thread. The CFP credential is a good one and this is a good sign. Lots of firms are hiring CFPs including the big mutual fund companies.
A fool and his money are good for business.
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scsu74
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Re: Unique EJ situation

Post by scsu74 »

Nate79 wrote: Sun Dec 05, 2021 4:46 pm You either want the gift with strings attached or you don't. It's not that big of a deal either way but if you decide to stay just try and keep costs as low as possible.
Ya, that was kind of the point of the post. Was wondering if the ANWPX made more sense while inside of EJ or VTI was worth it if that's what I want in the long run.
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scsu74
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Re: Unique EJ situation

Post by scsu74 »

dbr wrote: Sun Dec 05, 2021 5:08 pm
scsu74 wrote: Sun Dec 05, 2021 11:32 am
TJat wrote: Sun Dec 05, 2021 11:21 am
Katietsu wrote: Sun Dec 05, 2021 10:48 am
scsu74 wrote: Sun Dec 05, 2021 10:29 am It gets really bad when you realize she paid that on initial investment, we're paying it on the gift investment and 4 other family members she's gifting to are also each paying another 5%. 30% total he's making 😱
Maybe it will make you feel better to realize that the % does not change with more family members. Still just 5-5.75%.
Earlier OP mentioned the gifts were transferred in as cash. This makes me think the EJ advisor is coercing the gifted to liquidate her shares, gift the money, and have her require the recipient buys back in. If true, and to me (and I think his licensing ethics board), this is grossly unethical.

Yep, that's correct. Gifter is liquidating. Gifting cash to 7 accounts, then this accounts are each paying the load every time we purchase
Ah, this is answered. Yes, this is highly problematic both in terms of extracting unjusfified fees and also may be costing the grandmother in taxes. At this point a discussion with the grandmother might be appropriate. As in all family matters there are probably the right people and the right way to do this.
We tried and she just got really upset and said the advisor knows what he's doing.
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nedsaid
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Re: Unique EJ situation

Post by nedsaid »

scsu74 wrote: Sun Dec 05, 2021 6:56 pm
arcticpineapplecorp. wrote: Sun Dec 05, 2021 12:55 pm
TJat wrote: Sun Dec 05, 2021 11:21 am
Katietsu wrote: Sun Dec 05, 2021 10:48 am
scsu74 wrote: Sun Dec 05, 2021 10:29 am It gets really bad when you realize she paid that on initial investment, we're paying it on the gift investment and 4 other family members she's gifting to are also each paying another 5%. 30% total he's making 😱
Maybe it will make you feel better to realize that the % does not change with more family members. Still just 5-5.75%.
Earlier OP mentioned the gifts were transferred in as cash. This makes me think the EJ advisor is coercing the gifted to liquidate her shares, gift the money, and have her require the recipient buys back in. If true, and to me (and I think his licensing ethics board), this is grossly unethical.
for those who don't understand the problem with this, imagine this EJ "friend" got the 5.75% commission from the giver originally when she purchased her shares. Then she liquidates and the OP has to buy those funds again (or new funds) and the EJ "friend" gets another fat 5.75% commission.

nice work if you can get it.
Yep, that's what I was trying to explain and what I have a problem with. Might have worded it incorrectly. He's getting the 5.75% 8 seperate times.
Yes, the Advisor could have suggested to transfer shares instead of cash which would have potentially saved her taxes and you and your relatives the load but with the disadvantage of receiving her (the giver's) tax basis. Either this wasn't thought through too well, or Grandma waved off the advice, or this showed the Advisor's conflict of interest. Messy but not a major tragedy.
A fool and his money are good for business.
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scsu74
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Re: Unique EJ situation

Post by scsu74 »

Doom&Gloom wrote: Sun Dec 05, 2021 6:11 pm
Makefile wrote: Sun Dec 05, 2021 11:56 am I knew it sounded familiar:

viewtopic.php?f=2&t=298937&p=4926577
I've tried to keep up itt, but I'm not sure this deeper backstory from the linked thread has been linked.

viewtopic.php?f=1&t=298652#p4916964

This drama has been going on for over a couple of years with some confrontation between OP and the adviser.

I don't think there is any doubt that the advisor is at least unethical--but, hey, this is EJ. I doubt EJ will do anything to a 30+ year employee unless under extreme pressure to act. I also don't think there is much doubt about what granny wants to do and doesn't want to do. I doubt she is interested in listening to advice about how to handle her finances from any of her grandchildren or their spouses.

I don't see how the choices that OP has now are much different from those suggested in the previous two threads. I think my path would be to keep quiet, take the money, and then do what I wish with it when/if it makes financial and family relationship sense to do that. One of the things that I would do is not look at it as a gift but as a gift with unpleasant strings. When I (and my spouse as it is her grandmother) tire of the strings, I would cut them and the future "gifts" and family peace loose.

Good luck with what you decide, OP!
Thank you! The intent of this post was to compare the fees/cost of the specific two funds. Wasn't trying to get into all the back story again, but I guess it's inevitable
Makefile
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Re: Unique EJ situation

Post by Makefile »

scsu74 wrote: Sun Dec 05, 2021 7:10 pm Thank you! The intent of this post was to compare the fees/cost of the specific two funds. Wasn't trying to get into all the back story again, but I guess it's inevitable
Yeah, I suspect this is ultimately a case of the golden rule. The one with the gold (or in this case, future gold) makes the rules.

It would still be worth you looking into the breakpoints and rights of accumulation that several have mentioned, should you continue buying the load mutual funds.
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Darth Vanguard
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Re: Unique EJ situation

Post by Darth Vanguard »

scsu74 wrote: Sun Dec 05, 2021 6:56 pm
arcticpineapplecorp. wrote: Sun Dec 05, 2021 12:55 pm
TJat wrote: Sun Dec 05, 2021 11:21 am
Katietsu wrote: Sun Dec 05, 2021 10:48 am
scsu74 wrote: Sun Dec 05, 2021 10:29 am It gets really bad when you realize she paid that on initial investment, we're paying it on the gift investment and 4 other family members she's gifting to are also each paying another 5%. 30% total he's making 😱
Maybe it will make you feel better to realize that the % does not change with more family members. Still just 5-5.75%.
Earlier OP mentioned the gifts were transferred in as cash. This makes me think the EJ advisor is coercing the gifted to liquidate her shares, gift the money, and have her require the recipient buys back in. If true, and to me (and I think his licensing ethics board), this is grossly unethical.
for those who don't understand the problem with this, imagine this EJ "friend" got the 5.75% commission from the giver originally when she purchased her shares. Then she liquidates and the OP has to buy those funds again (or new funds) and the EJ "friend" gets another fat 5.75% commission.

nice work if you can get it.
Yep, that's what I was trying to explain and what I have a problem with. Might have worded it incorrectly. He's getting the 5.75% 8 seperate times.
He's only getting it twice, but I understand your point and it is an issue. Unless there are some other details that you are not privy to, this sounds like straight up churning.

Personally, I would say something with the expectation of if it fell on deaf ears, I would drop it.

I would present it casually, so it doesn't come up as being confrontational. Something along the lines of "Thanks again for your gift, I really appreciate it. I was thinking about the way the gift is handled, was talking to my CPA, talking to my Vanguard advisor, etc., and he/she brought up some interesting questions that I didn't know the answers to." Then you can chose what area you want to attack. "Why aren't the shares transferred in kind to avoid additional costs?" Or something along those lines.

I would end it with saying something along the lines of "I just want to make sure your generous gifts are being done in the most effective way."

And again, if I got no traction, I would drop it.

Good luck.
May the Force be with you.
dbr
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Re: Unique EJ situation

Post by dbr »

In the end it just demonstrates the insidious nature of the way these companies take advantage of investors who don't know any better.

There are probably very few examples of such egregious situations generally as people transact business of different kinds.
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arcticpineapplecorp.
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Re: Unique EJ situation

Post by arcticpineapplecorp. »

scsu74 wrote: Sun Dec 05, 2021 7:07 pm
dbr wrote: Sun Dec 05, 2021 5:08 pm
scsu74 wrote: Sun Dec 05, 2021 11:32 am
TJat wrote: Sun Dec 05, 2021 11:21 am
Katietsu wrote: Sun Dec 05, 2021 10:48 am

Maybe it will make you feel better to realize that the % does not change with more family members. Still just 5-5.75%.
Earlier OP mentioned the gifts were transferred in as cash. This makes me think the EJ advisor is coercing the gifted to liquidate her shares, gift the money, and have her require the recipient buys back in. If true, and to me (and I think his licensing ethics board), this is grossly unethical.

Yep, that's correct. Gifter is liquidating. Gifting cash to 7 accounts, then this accounts are each paying the load every time we purchase
Ah, this is answered. Yes, this is highly problematic both in terms of extracting unjusfified fees and also may be costing the grandmother in taxes. At this point a discussion with the grandmother might be appropriate. As in all family matters there are probably the right people and the right way to do this.
We tried and she just got really upset and said the advisor knows what he's doing.
he knows what he's doing alright. :annoyed

you checked to see he was a cfp, but did you check his adv part 2 to see if he had any disclosures?
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
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scsu74
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Re: Unique EJ situation

Post by scsu74 »

Makefile wrote: Sun Dec 05, 2021 7:12 pm
scsu74 wrote: Sun Dec 05, 2021 7:10 pm Thank you! The intent of this post was to compare the fees/cost of the specific two funds. Wasn't trying to get into all the back story again, but I guess it's inevitable
Yeah, I suspect this is ultimately a case of the golden rule. The one with the gold (or in this case, future gold) makes the rules.

It would still be worth you looking into the breakpoints and rights of accumulation that several have mentioned, should you continue buying the load mutual funds.
I think I'm just going to open a Roth and buy vti. It's 2.5% fee on ETFs up to 6k, but there's a $50 minimum fee, which is where the 5% at 1k came from. I'll just let the money sit until there's at least 2k to invest at a time
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scsu74
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Re: Unique EJ situation

Post by scsu74 »

arcticpineapplecorp. wrote: Sun Dec 05, 2021 7:31 pm
scsu74 wrote: Sun Dec 05, 2021 7:07 pm
dbr wrote: Sun Dec 05, 2021 5:08 pm
scsu74 wrote: Sun Dec 05, 2021 11:32 am
TJat wrote: Sun Dec 05, 2021 11:21 am

Earlier OP mentioned the gifts were transferred in as cash. This makes me think the EJ advisor is coercing the gifted to liquidate her shares, gift the money, and have her require the recipient buys back in. If true, and to me (and I think his licensing ethics board), this is grossly unethical.

Yep, that's correct. Gifter is liquidating. Gifting cash to 7 accounts, then this accounts are each paying the load every time we purchase
Ah, this is answered. Yes, this is highly problematic both in terms of extracting unjusfified fees and also may be costing the grandmother in taxes. At this point a discussion with the grandmother might be appropriate. As in all family matters there are probably the right people and the right way to do this.
We tried and she just got really upset and said the advisor knows what he's doing.
he knows what he's doing alright. :annoyed

you checked to see he was a cfp, but did you check his adv part 2 to see if he had any disclosures?
How do I check that?
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arcticpineapplecorp.
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Re: Unique EJ situation

Post by arcticpineapplecorp. »

scsu74 wrote: Sun Dec 05, 2021 7:42 pm
arcticpineapplecorp. wrote: Sun Dec 05, 2021 7:31 pm
scsu74 wrote: Sun Dec 05, 2021 7:07 pm
dbr wrote: Sun Dec 05, 2021 5:08 pm
scsu74 wrote: Sun Dec 05, 2021 11:32 am


Yep, that's correct. Gifter is liquidating. Gifting cash to 7 accounts, then this accounts are each paying the load every time we purchase
Ah, this is answered. Yes, this is highly problematic both in terms of extracting unjusfified fees and also may be costing the grandmother in taxes. At this point a discussion with the grandmother might be appropriate. As in all family matters there are probably the right people and the right way to do this.
We tried and she just got really upset and said the advisor knows what he's doing.
he knows what he's doing alright. :annoyed

you checked to see he was a cfp, but did you check his adv part 2 to see if he had any disclosures?
How do I check that?
https://adviserinfo.sec.gov/
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
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Re: Unique EJ situation

Post by Nestegg_User »

don't forget, OP and ArticPineappleCorp, that there's actually ** multiple violations ** since there are five individual families affected by the gifts...So I'd suspect that the SEC would come down harder

I'd also disagree with Nedsed...it does matter

I'd also insure that, if one did want to take some funds out of the EJ, make sure you leave some funds in it, such that it will remain in effect !. In that way, the salesman (NOT advisor) cannot use the weasel way out by saying that "oh, they don't have an account with me/EJ anymore. That keeps him from disclosing without violating... if he does.... I would go down HARD and also have the others also file a violation!!

To the OP: If the grandmother doesn't want to direct any funds to you, if you do transfer some out/are incorrectly disclosed/and she wants to otherwise stop, then suggest she sets up a 529 for the kid(s) instead.... it shows that you want any funds used in a beneficial way for your family and aren't just using the gifts indiscriminately.
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Re: Unique EJ situation

Post by Makefile »

Those coming down hard against the broker do have a point (though I'm not sure it's time to make a complaint). The OP hasn't been clear that I see whether the confidentiality breach has ever been brought up with the broker. If not, the OP runs the risk of going back to square one in the event it gets leaked that he is investing in something different than recommended.
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Re: Unique EJ situation

Post by arcticpineapplecorp. »

Nestegg_User wrote: Sun Dec 05, 2021 7:58 pm don't forget, OP and ArticPineappleCorp, that there's actually ** multiple violations ** since there are five individual families affected by the gifts...So I'd suspect that the SEC would come down harder

I'd also disagree with Nedsed...it does matter

I'd also insure that, if one did want to take some funds out of the EJ, make sure you leave some funds in it, such that it will remain in effect !. In that way, the salesman (NOT advisor) cannot use the weasel way out by saying that "oh, they don't have an account with me/EJ anymore. That keeps him from disclosing without violating... if he does.... I would go down HARD and also have the others also file a violation!!

To the OP: If the grandmother doesn't want to direct any funds to you, if you do transfer some out/are incorrectly disclosed/and she wants to otherwise stop, then suggest she sets up a 529 for the kid(s) instead.... it shows that you want any funds used in a beneficial way for your family and aren't just using the gifts indiscriminately.
these are very good points actually, thanks for sharing them.

was thinking about your second point (keeping the minimal amount in the acct to not close the acct) for the exact reason but i failed to post about that so thank you.

the first point (it's affecting 5 families not just one or two) is very good and I missed that. thanks for catching.
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Nestegg_User
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Re: Unique EJ situation

Post by Nestegg_User »

further suggestions:
1) insure that you DON'T use the same EJ salesman as your grandmother for any accounts
(there would be absolutely NO reason for one rep to look at the book of another... this would add to the violations towards the EJ rep)
The one way to get this to happen is that EJ is all over the country, but "advisors" (yeah, right) work best when they can directly interact (hence "local") {I assume that the OP isn't in the same immediate area of the grandmother}. Sometimes, especially for things like insurance companies, they want to have the agency and clients be in the same locales (obviously, for insurance it's because of state regulation). If one could get EJ itself to perform the transfer...it would be out of the reps hands (!!!) and the OP could do the "plausible deniability" of why it got transferred from her EJ rep...leading to...

2) set up a separate account (yeah, even if it's EJ...and would cause a "closure fee" in the future)...let's call this "account B"
--==> have the gifts go into the original account ("account A"), then transfer into Account B (and possibly others, like a separate 529). This means that, even though the original rep knows of the account number for the funds to transfer to, they won't know where the rest is. Insure that no info is directed to "Account A"... including auto transfers so that the GM's rep is "blind" to any activity...any knowledge that they would try to gleen would clearly show intent... and would be why I would go down HARD on any disclosures... (and even EJ might be leary, although color me surprised if they got canned unless they got SEC violations)


3) make sure all accounts don't allow their reps to make any changes w/o specific instructions (prevent churning) and especially don't allow for their funny annuities etc.
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Re: Unique EJ situation

Post by Dottie57 »

arcticpineapplecorp. wrote: Sun Dec 05, 2021 4:26 pm
nedsaid wrote: Sun Dec 05, 2021 3:11 pm You are hugely overreacting here. I have heard horror stories from the financial industry much, much worse than this. This is not blackmail. There is a problem here, there is a battle that could be fought here, but I am saying that the potential costs and hard feelings would be far in excess of whatever benefits are achieved from pursuing this battle.

There is lots of unethical and even illegal behavior out there in the business world. I have heard lots and lots of stories. What the Advisor is doing here is wrong but this is not a capital offense. This is a bit more than just greasy kids stuff but it isn't Bernie Madoff either. You make it sound like the Original Poster's money came from dealing with the Drug Cartels or something like that. There is a moral issue here but the issue isn't whether the Original Poster should receive part of an inheritance in advance as a gift, the issue involves conflict of interest of the Advisor and Confidentiality. The Original Poster isn't taking money from illegal drugs or prostitution.

Probably a better way for the giver to handle this was to set up trusts for the beneficiaries. The giver wanted to do something nice and to make gifts while still alive. The giver probably wanted to make sure the gifts were not squandered. We also don't know for sure what the giver and the Advisor discussed when setting this up. Not sure we know the whole story here.

Shoot, I probably drove 40 miles an hour in a 35 mile an hour zone while on my way to work last week. It was illegal behavior but cars would zoom right around me at 35 mph and on occasion even at 40 or 45. I suppose somebody should report me. What the Advisor has done is more than a speeding ticket but certainly not a capital offense.

Probably what I would do is after the giver is gone, file a complaint about lack of confidentiality in this situation and give the company and the advisor a chance to respond. This is a battle just not worth fighting at this time.
let me clarify a couple points.

1. you can say i'm over reacting. and I can say you're under reacting.

2. [OT comments removed by admin LadyGeek]

He's having to cowtow to another to get the money, even though there's nothing in writing holding him to EJ (except threats of being cut off from future money).

Perhaps the better metaphor is the trope of "Oh No! Mommy and Daddy will cut me out of the will if I don't become a doctor! But I want to be a ballerina! What am I to do? Woe is me."

3. To file a complaint after the relative dies is to prolong the unethical/unprofessional behvior. If you recognize a problem and do nothing, you're complicit in that behavior.

Also, failing to take action when you see a problem and know something can be done about it strikes me as conflict avoidant. I don't look for conflict, but I don't shy away from it when it comes to me.

4. finally, there are degrees of wrongness. Sure the EJ "friend" didn't murder anyone. Does that mean his behavior shouldn't be taken seriously because he could have done so much worse (a la Madoff)? I think that's a weak standard of argument. The guy either did something wrong or he didn't. If he did, he should be made to stop doing that. Otherwise, if the standard of wrongness is extreme (murder or madoff) that allows an awful lot of bad actors out there to continue offenses, albeit lesser offenses.

5. Finally, regarding the example of speeding, sure you could be reported. The likelihood is greater if you cause harm (cut someone off, drive recklessly, etc) or someone else would be reported before you if they sped more than you. If you speed and others are speeding you're technically breaking the law, but fortunately no one got hurt.

Thing is, in the OP's case, someone did get hurt. The OP did. He's losing out on money because the EJ "friend" is holding him hostage with the OP's family member. They're colluding to keep the OP at EJ and she has no business knowing how the OP's money is invested. Not what funds he's in. Not where it is. Nothing. If you think I'm wrong, let's see it in writing that the giver has any right whatsoever to control the OP's gift in any way shape or form.
The money is NOT op’s - it is his wife’s. I am not sure the advisor should talk to OP either.

[OT comment removed by admin LadyGeek]
User avatar
nedsaid
Posts: 19275
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Re: Unique EJ situation

Post by nedsaid »

Nestegg_User wrote: Sun Dec 05, 2021 7:58 pm don't forget, OP and ArticPineappleCorp, that there's actually ** multiple violations ** since there are five individual families affected by the gifts...So I'd suspect that the SEC would come down harder

I'd also disagree with Nedsed...it does matter

I'd also insure that, if one did want to take some funds out of the EJ, make sure you leave some funds in it, such that it will remain in effect !. In that way, the salesman (NOT advisor) cannot use the weasel way out by saying that "oh, they don't have an account with me/EJ anymore. That keeps him from disclosing without violating... if he does.... I would go down HARD and also have the others also file a violation!!

To the OP: If the grandmother doesn't want to direct any funds to you, if you do transfer some out/are incorrectly disclosed/and she wants to otherwise stop, then suggest she sets up a 529 for the kid(s) instead.... it shows that you want any funds used in a beneficial way for your family and aren't just using the gifts indiscriminately.
I am not saying that these issues don't matter, I am saying it is a battle not worth fighting.

In other threads, I can see that the Original Poster was taking steps to resolve issues more to his satisfaction. I have read all three threads, am pretty well up to speed what happened, and think there are two issues here: confidentiality and potential churning. They are more serious than spitting on the sidewalk or a speeding ticket but I have seen and heard worse things. Sad to say that despite strict regulation, it is still a "let the buyer beware" environment out there, particularly with the large full service brokerage firms.

Here is Investopedia's definition:
Churning is the illegal and unethical practice by a broker of excessively trading assets in a client's account in order to generate commissions.

While there is no quantitative measure for churning, frequent buying and selling of stocks or any assets that do little to meet the client's investment objectives may be evidence of churning.
Sounds to me like the original poster received cash and bought American Funds that the Advisor recommended. Later on, after learning about Vanguard and indexing, looked into moving the money to Vanguard. What was inexcusable was the Advisor calling the Grandmother (the giver) and telling her what happened. The the Original Poster learned that the money had to stay at Edward Jones or there would be no more gifts. So now, the OP was buying Vanguard ETFs instead of the American Funds for a commission of 2% rather than 5%. Hard to say if churning happened here but certainly breach of confidentiality.

Here's the deal. Grandma is a grown adult and she chose Edward Jones and the Advisor. Trying to help her is pretty much telling her that her decision to hire Edward Jones and the Advisor was a mistake, so of course you are going to get pushback. It is a difficult task to straighten out other's financial lives. She has developed a bond with the Advisor and evidently won't hear criticism of what he has done. So the OP is in a tough spot.

I have had a couple of family members with Edward Jones accounts. One family member had some money that he/she wanted to invest and I told him/her about Vanguard and investing inexpensively in Index Funds. It sounded like too much trouble to invest somewhere on the other side of the country so he/she went to the nearest Edward Jones office. It was sort of "blah, blah, blah, Vanguard, blah, blah, blah."

Another family member also has an account with Edward Jones and again proximity to home was a big issue. Edward Jones is everywhere. This family member has a Schwab account but their office is a 30-45 minutes away by car, a daunting task for an elderly person. So much easier to go see the local Advisor at Edward Jones. I gently suggested going to Schwab for financial planning and for portfolio management but I went easy not willing to interfere too much. I brought it up once and dropped the subject afterwards.

These two family members are both elderly, one is living and the other has passed away. I gave advice when asked but I didn't see my role as a caped crusader saving them from their own financial errors. Both were and are competent adults and this gets to be really a sticky situation. I don't see it as my role to go charging into other people's financial lives.

So I am not minimizing what happened here but trying to inject some realism into the discussion. The average person is not a Boglehead and that is hard for lots here on the forum to accept.
A fool and his money are good for business.
twh
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Re: Unique EJ situation

Post by twh »

I'm suprised by some of the comments, honestly.

EJ isn't the best and that the EJ advisor is ethically challenged.

That isn't something the OP can do anything about.

The OP family is getting gifts from a relative. There is no shame in accepting gifts from relatives and the relative believes they are doing a nice thing and they ARE doing a nice thing. Sometimes gifts have strings. I'd call these "strings" minor. Frankly, the worst thing about these "strings" is the thought of enriching an ethically challenged advisor.
Dottie57
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Re: Unique EJ situation

Post by Dottie57 »

This is from a different thread where OP states the account in question is his wife’s.

viewtopic.php?p=4919869#p4919869
Topic Author
scsu74
Posts: 92
Joined: Thu Dec 26, 2019 10:55 pm

Re: Unique EJ situation

Post by scsu74 »

nedsaid wrote: Sun Dec 05, 2021 9:35 pm
Nestegg_User wrote: Sun Dec 05, 2021 7:58 pm don't forget, OP and ArticPineappleCorp, that there's actually ** multiple violations ** since there are five individual families affected by the gifts...So I'd suspect that the SEC would come down harder

I'd also disagree with Nedsed...it does matter

I'd also insure that, if one did want to take some funds out of the EJ, make sure you leave some funds in it, such that it will remain in effect !. In that way, the salesman (NOT advisor) cannot use the weasel way out by saying that "oh, they don't have an account with me/EJ anymore. That keeps him from disclosing without violating... if he does.... I would go down HARD and also have the others also file a violation!!

To the OP: If the grandmother doesn't want to direct any funds to you, if you do transfer some out/are incorrectly disclosed/and she wants to otherwise stop, then suggest she sets up a 529 for the kid(s) instead.... it shows that you want any funds used in a beneficial way for your family and aren't just using the gifts indiscriminately.
I am not saying that these issues don't matter, I am saying it is a battle not worth fighting.

In other threads, I can see that the Original Poster was taking steps to resolve issues more to his satisfaction. I have read all three threads, am pretty well up to speed what happened, and think there are two issues here: confidentiality and potential churning. They are more serious than spitting on the sidewalk or a speeding ticket but I have seen and heard worse things. Sad to say that despite strict regulation, it is still a "let the buyer beware" environment out there, particularly with the large full service brokerage firms.

Here is Investopedia's definition:
Churning is the illegal and unethical practice by a broker of excessively trading assets in a client's account in order to generate commissions.

While there is no quantitative measure for churning, frequent buying and selling of stocks or any assets that do little to meet the client's investment objectives may be evidence of churning.
Sounds to me like the original poster received cash and bought American Funds that the Advisor recommended. Later on, after learning about Vanguard and indexing, looked into moving the money to Vanguard. What was inexcusable was the Advisor calling the Grandmother (the giver) and telling her what happened. The the Original Poster learned that the money had to stay at Edward Jones or there would be no more gifts. So now, the OP was buying Vanguard ETFs instead of the American Funds for a commission of 2% rather than 5%. Hard to say if churning happened here but certainly breach of confidentiality.

Here's the deal. Grandma is a grown adult and she chose Edward Jones and the Advisor. Trying to help her is pretty much telling her that her decision to hire Edward Jones and the Advisor was a mistake, so of course you are going to get pushback. It is a difficult task to straighten out other's financial lives. She has developed a bond with the Advisor and evidently won't hear criticism of what he has done. So the OP is in a tough spot.

I have had a couple of family members with Edward Jones accounts. One family member had some money that he/she wanted to invest and I told him/her about Vanguard and investing inexpensively in Index Funds. It sounded like too much trouble to invest somewhere on the other side of the country so he/she went to the nearest Edward Jones office. It was sort of "blah, blah, blah, Vanguard, blah, blah, blah."

Another family member also has an account with Edward Jones and again proximity to home was a big issue. Edward Jones is everywhere. This family member has a Schwab account but their office is a 30-45 minutes away by car, a daunting task for an elderly person. So much easier to go see the local Advisor at Edward Jones. I gently suggested going to Schwab for financial planning and for portfolio management but I went easy not willing to interfere too much. I brought it up once and dropped the subject afterwards.

These two family members are both elderly, one is living and the other has passed away. I gave advice when asked but I didn't see my role as a caped crusader saving them from their own financial errors. Both were and are competent adults and this gets to be really a sticky situation. I don't see it as my role to go charging into other people's financial lives.

So I am not minimizing what happened here but trying to inject some realism into the discussion. The average person is not a Boglehead and that is hard for lots here on the forum to accept.
Very good points and correct in this case. GIL is 90 and has been with this advisor 40+ years. Same with all her friends. It's a small town and he's basically the guy everyone goes to. It's an ease and comfort thing at this point I'm sure.
Topic Author
scsu74
Posts: 92
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Re: Unique EJ situation

Post by scsu74 »

Dottie57 wrote: Sun Dec 05, 2021 9:25 pm
arcticpineapplecorp. wrote: Sun Dec 05, 2021 4:26 pm
nedsaid wrote: Sun Dec 05, 2021 3:11 pm You are hugely overreacting here. I have heard horror stories from the financial industry much, much worse than this. This is not blackmail. There is a problem here, there is a battle that could be fought here, but I am saying that the potential costs and hard feelings would be far in excess of whatever benefits are achieved from pursuing this battle.

There is lots of unethical and even illegal behavior out there in the business world. I have heard lots and lots of stories. What the Advisor is doing here is wrong but this is not a capital offense. This is a bit more than just greasy kids stuff but it isn't Bernie Madoff either. You make it sound like the Original Poster's money came from dealing with the Drug Cartels or something like that. There is a moral issue here but the issue isn't whether the Original Poster should receive part of an inheritance in advance as a gift, the issue involves conflict of interest of the Advisor and Confidentiality. The Original Poster isn't taking money from illegal drugs or prostitution.

Probably a better way for the giver to handle this was to set up trusts for the beneficiaries. The giver wanted to do something nice and to make gifts while still alive. The giver probably wanted to make sure the gifts were not squandered. We also don't know for sure what the giver and the Advisor discussed when setting this up. Not sure we know the whole story here.

Shoot, I probably drove 40 miles an hour in a 35 mile an hour zone while on my way to work last week. It was illegal behavior but cars would zoom right around me at 35 mph and on occasion even at 40 or 45. I suppose somebody should report me. What the Advisor has done is more than a speeding ticket but certainly not a capital offense.

Probably what I would do is after the giver is gone, file a complaint about lack of confidentiality in this situation and give the company and the advisor a chance to respond. This is a battle just not worth fighting at this time.
let me clarify a couple points.

1. you can say i'm over reacting. and I can say you're under reacting.

2. [OT comments removed by admin LadyGeek]

He's having to cowtow to another to get the money, even though there's nothing in writing holding him to EJ (except threats of being cut off from future money).

Perhaps the better metaphor is the trope of "Oh No! Mommy and Daddy will cut me out of the will if I don't become a doctor! But I want to be a ballerina! What am I to do? Woe is me."

3. To file a complaint after the relative dies is to prolong the unethical/unprofessional behvior. If you recognize a problem and do nothing, you're complicit in that behavior.

Also, failing to take action when you see a problem and know something can be done about it strikes me as conflict avoidant. I don't look for conflict, but I don't shy away from it when it comes to me.

4. finally, there are degrees of wrongness. Sure the EJ "friend" didn't murder anyone. Does that mean his behavior shouldn't be taken seriously because he could have done so much worse (a la Madoff)? I think that's a weak standard of argument. The guy either did something wrong or he didn't. If he did, he should be made to stop doing that. Otherwise, if the standard of wrongness is extreme (murder or madoff) that allows an awful lot of bad actors out there to continue offenses, albeit lesser offenses.

5. Finally, regarding the example of speeding, sure you could be reported. The likelihood is greater if you cause harm (cut someone off, drive recklessly, etc) or someone else would be reported before you if they sped more than you. If you speed and others are speeding you're technically breaking the law, but fortunately no one got hurt.

Thing is, in the OP's case, someone did get hurt. The OP did. He's losing out on money because the EJ "friend" is holding him hostage with the OP's family member. They're colluding to keep the OP at EJ and she has no business knowing how the OP's money is invested. Not what funds he's in. Not where it is. Nothing. If you think I'm wrong, let's see it in writing that the giver has any right whatsoever to control the OP's gift in any way shape or form.
The money is NOT op’s - it is his wife’s. I am not sure the advisor should talk to OP either.

[OT comment removed by admin LadyGeek]
I'm authorized to make changes/decisions on the accounts. So it's more like a joint checking. We don't need the others permission to purchase or withdraw funds.
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Doom&Gloom
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Re: Unique EJ situation

Post by Doom&Gloom »

I admit to getting a bit of a kick out of all this talk of violations--not that there may not be some.

Does anybody believe there is a realistic chance that the advisor will admit to disclosing OP's details to grandmother-in-law? Or that grandmother-in-law would admit to receiving such information?

If this gets escalated to that point, OP will likely have bigger problems than losing several percentage points of free money being given to him and his wife annually.
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Nestegg_User
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Re: Unique EJ situation

Post by Nestegg_User »

nedsaid wrote: Sun Dec 05, 2021 9:35 pm
Nestegg_User wrote: Sun Dec 05, 2021 7:58 pm don't forget, OP and ArticPineappleCorp, that there's actually ** multiple violations ** since there are five individual families affected by the gifts...So I'd suspect that the SEC would come down harder

I'd also disagree with Nedsed...it does matter

I'd also insure that, if one did want to take some funds out of the EJ, make sure you leave some funds in it, such that it will remain in effect !. In that way, the salesman (NOT advisor) cannot use the weasel way out by saying that "oh, they don't have an account with me/EJ anymore. That keeps him from disclosing without violating... if he does.... I would go down HARD and also have the others also file a violation!!

To the OP: If the grandmother doesn't want to direct any funds to you, if you do transfer some out/are incorrectly disclosed/and she wants to otherwise stop, then suggest she sets up a 529 for the kid(s) instead.... it shows that you want any funds used in a beneficial way for your family and aren't just using the gifts indiscriminately.
I am not saying that these issues don't matter, I am saying it is a battle not worth fighting.

In other threads, I can see that the Original Poster was taking steps to resolve issues more to his satisfaction. I have read all three threads, am pretty well up to speed what happened, and think there are two issues here: confidentiality and potential churning. They are more serious than spitting on the sidewalk or a speeding ticket but I have seen and heard worse things. Sad to say that despite strict regulation, it is still a "let the buyer beware" environment out there, particularly with the large full service brokerage firms.

Here is Investopedia's definition:
Churning is the illegal and unethical practice by a broker of excessively trading assets in a client's account in order to generate commissions.

While there is no quantitative measure for churning, frequent buying and selling of stocks or any assets that do little to meet the client's investment objectives may be evidence of churning.
Sounds to me like the original poster received cash and bought American Funds that the Advisor recommended. Later on, after learning about Vanguard and indexing, looked into moving the money to Vanguard. What was inexcusable was the Advisor calling the Grandmother (the giver) and telling her what happened.
**agree...that's a clear violation...hence why, in my second post, I suggested the need to insure the OP's rep isn't the same as the GM
The the Original Poster learned that the money had to stay at Edward Jones or there would be no more gifts. So now, the OP was buying Vanguard ETFs instead of the American Funds for a commission of 2% rather than 5%
The GM's rep should have NO decision authority over the funds; further, that rep might have no idea how those funds interplay with others that the OP has (including any potential 401k's that the rep would have no access to) and thus how the overall portfolio would be expected to perform (except that it wouldn't "perform" as well for him personally)
Hard to say if churning happened here but certainly breach of confidentiality.
And THATS a MAJOR violation, and as I mentioned, likely multiple violations since it's likely done for all of the siblings ..clearly worthy of ban from securities trading...

Here's the deal. Grandma is a grown adult and she chose Edward Jones and the Advisor. Trying to help her is pretty much telling her that her decision to hire Edward Jones and the Advisor was a mistake, so of course you are going to get pushback.
Clearly NOT the case I was making (and not others, in my reading)...what SHE wants to do should have NO bearing on what the OP needs to do... Just as she might have a good lawyer in her city, doesn't mean that the OP should be obligated to use them for legal consultation. The OP, as I read it, has already eliminated any tacit consideration of it being a "mistake" by the GM...just doesn't want to make the same "mistake" over a prolonged period.

It is a difficult task to straighten out other's financial lives. She has developed a bond with the Advisor and evidently won't hear criticism of what he has done. So the OP is in a tough spot.
No need to, and as I read it, that might have been "suggested" before but dropped from consideration. Not his circus...not his monkeys

I have had a couple of family members with Edward Jones accounts. One family member had some money that he/she wanted to invest and I told him/her about Vanguard and investing inexpensively in Index Funds. It sounded like too much trouble to invest somewhere on the other side of the country so he/she went to the nearest Edward Jones office. It was sort of "blah, blah, blah, Vanguard, blah, blah, blah."
This lends better credence to my idea in the second post that the OP transfer account to a local rep....same reasoning (and allows for separation/"blinding" of the GM rep so that OP can direct funds without interference

Another family member also has an account with Edward Jones and again proximity to home was a big issue. Edward Jones is everywhere. This family member has a Schwab account but their office is a 30-45 minutes away by car, a daunting task for an elderly person. So much easier to go see the local Advisor at Edward Jones. I gently suggested going to Schwab for financial planning and for portfolio management but I went easy not willing to interfere too much. I brought it up once and dropped the subject afterwards.
{ditto}

These two family members are both elderly, one is living and the other has passed away. I gave advice when asked but I didn't see my role as a caped crusader saving them from their own financial errors. Both were and are competent adults and this gets to be really a sticky situation. I don't see it as my role to go charging into other people's financial lives.

So I am not minimizing what happened here but trying to inject some realism into the discussion. The average person is not a Boglehead and that is hard for lots here on the forum to accept.
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Nestegg_User
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Re: Unique EJ situation

Post by Nestegg_User »

Doom&Gloom wrote: Sun Dec 05, 2021 9:48 pm I admit to getting a bit of a kick out of all this talk of violations--not that there may not be some.

Does anybody believe there is a realistic chance that the advisor will admit to disclosing OP's details to grandmother-in-law? Or that grandmother-in-law would admit to receiving such information?

If this gets escalated to that point, OP will likely have bigger problems than losing several percentage points of free money being given to him and his wife annually.
D&G
that's why I suggested that the OP insure that the GM's rep isn't theirs... and that there be a second account that funds get transferred to....
{personally, I'd transfer a significant amount of funds out after setting it up this way...still insuring that the accounts would stay open with some funds in it. The GM's rep doesn't have any need to know of the "book" of the (new) OP EJ rep...and even EJ would have to have a very strange view to agree that they would need to. If the OP could find a way for EJ to agree to move to a more local rep...again the old "plausible deniability" thing for the grandmother... it would help short circuit interference by her rep. EJ probably doesn't care as long as they get theirs!}
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nedsaid
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Re: Unique EJ situation

Post by nedsaid »

scsu74 wrote: Sun Dec 05, 2021 9:43 pm
nedsaid wrote: Sun Dec 05, 2021 9:35 pm
I am not saying that these issues don't matter, I am saying it is a battle not worth fighting.

In other threads, I can see that the Original Poster was taking steps to resolve issues more to his satisfaction. I have read all three threads, am pretty well up to speed what happened, and think there are two issues here: confidentiality and potential churning. They are more serious than spitting on the sidewalk or a speeding ticket but I have seen and heard worse things. Sad to say that despite strict regulation, it is still a "let the buyer beware" environment out there, particularly with the large full service brokerage firms.

Here is Investopedia's definition:
Churning is the illegal and unethical practice by a broker of excessively trading assets in a client's account in order to generate commissions.

While there is no quantitative measure for churning, frequent buying and selling of stocks or any assets that do little to meet the client's investment objectives may be evidence of churning.
Sounds to me like the original poster received cash and bought American Funds that the Advisor recommended. Later on, after learning about Vanguard and indexing, looked into moving the money to Vanguard. What was inexcusable was the Advisor calling the Grandmother (the giver) and telling her what happened. The the Original Poster learned that the money had to stay at Edward Jones or there would be no more gifts. So now, the OP was buying Vanguard ETFs instead of the American Funds for a commission of 2% rather than 5%. Hard to say if churning happened here but certainly breach of confidentiality.

Here's the deal. Grandma is a grown adult and she chose Edward Jones and the Advisor. Trying to help her is pretty much telling her that her decision to hire Edward Jones and the Advisor was a mistake, so of course you are going to get pushback. It is a difficult task to straighten out other's financial lives. She has developed a bond with the Advisor and evidently won't hear criticism of what he has done. So the OP is in a tough spot.

I have had a couple of family members with Edward Jones accounts. One family member had some money that he/she wanted to invest and I told him/her about Vanguard and investing inexpensively in Index Funds. It sounded like too much trouble to invest somewhere on the other side of the country so he/she went to the nearest Edward Jones office. It was sort of "blah, blah, blah, Vanguard, blah, blah, blah."

Another family member also has an account with Edward Jones and again proximity to home was a big issue. Edward Jones is everywhere. This family member has a Schwab account but their office is a 30-45 minutes away by car, a daunting task for an elderly person. So much easier to go see the local Advisor at Edward Jones. I gently suggested going to Schwab for financial planning and for portfolio management but I went easy not willing to interfere too much. I brought it up once and dropped the subject afterwards.

These two family members are both elderly, one is living and the other has passed away. I gave advice when asked but I didn't see my role as a caped crusader saving them from their own financial errors. Both were and are competent adults and this gets to be really a sticky situation. I don't see it as my role to go charging into other people's financial lives.

So I am not minimizing what happened here but trying to inject some realism into the discussion. The average person is not a Boglehead and that is hard for lots here on the forum to accept.
Very good points and correct in this case. GIL is 90 and has been with this advisor 40+ years. Same with all her friends. It's a small town and he's basically the guy everyone goes to. It's an ease and comfort thing at this point I'm sure.
Thank you for your response. You actually have a good situation though the arrangement with Edward Jones is less than optimal. I would be thankful, and I know you are too, if my wife's Grandmother gave money like this. The other side of this is that Grandma could have spent thousands on Attorney's fees getting trusts set up, so part of what could have been spent on Attorneys went to the Advisor.

I have lived in small towns myself and I know how the dynamics of a small community work. I just don't see what raising a stink over this would accomplish, you did the correct thing and had a talk with the advisor over the breach of confidentiality. I guess what I would say is that is life in a small town, many positives but also negatives involved.

My first job out of college, I lived in a County that had only one stop light and it was in the small town that I lived in. More cows than people in that County. It was actually two towns close together, one was the largest town in the County and the other was the County Seat. During the time I lived there, I suppose there were maybe 6,000 people who lived in the two towns. In contrast, I live in a metropolitan area where probably 2.5 million people live, quite a difference.

Sounds to me like you are doing the right things. Many best wishes for your future success and hope that everything works out well for you and your family members.

Ned
A fool and his money are good for business.
Dottie57
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Joined: Thu May 19, 2016 5:43 pm
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Re: Unique EJ situation

Post by Dottie57 »

scsu74 wrote: Sun Dec 05, 2021 9:45 pm
Dottie57 wrote: Sun Dec 05, 2021 9:25 pm
arcticpineapplecorp. wrote: Sun Dec 05, 2021 4:26 pm
nedsaid wrote: Sun Dec 05, 2021 3:11 pm You are hugely overreacting here. I have heard horror stories from the financial industry much, much worse than this. This is not blackmail. There is a problem here, there is a battle that could be fought here, but I am saying that the potential costs and hard feelings would be far in excess of whatever benefits are achieved from pursuing this battle.

There is lots of unethical and even illegal behavior out there in the business world. I have heard lots and lots of stories. What the Advisor is doing here is wrong but this is not a capital offense. This is a bit more than just greasy kids stuff but it isn't Bernie Madoff either. You make it sound like the Original Poster's money came from dealing with the Drug Cartels or something like that. There is a moral issue here but the issue isn't whether the Original Poster should receive part of an inheritance in advance as a gift, the issue involves conflict of interest of the Advisor and Confidentiality. The Original Poster isn't taking money from illegal drugs or prostitution.

Probably a better way for the giver to handle this was to set up trusts for the beneficiaries. The giver wanted to do something nice and to make gifts while still alive. The giver probably wanted to make sure the gifts were not squandered. We also don't know for sure what the giver and the Advisor discussed when setting this up. Not sure we know the whole story here.

Shoot, I probably drove 40 miles an hour in a 35 mile an hour zone while on my way to work last week. It was illegal behavior but cars would zoom right around me at 35 mph and on occasion even at 40 or 45. I suppose somebody should report me. What the Advisor has done is more than a speeding ticket but certainly not a capital offense.

Probably what I would do is after the giver is gone, file a complaint about lack of confidentiality in this situation and give the company and the advisor a chance to respond. This is a battle just not worth fighting at this time.
let me clarify a couple points.

1. you can say i'm over reacting. and I can say you're under reacting.

2. [OT comments removed by admin LadyGeek]

He's having to cowtow to another to get the money, even though there's nothing in writing holding him to EJ (except threats of being cut off from future money).

Perhaps the better metaphor is the trope of "Oh No! Mommy and Daddy will cut me out of the will if I don't become a doctor! But I want to be a ballerina! What am I to do? Woe is me."

3. To file a complaint after the relative dies is to prolong the unethical/unprofessional behvior. If you recognize a problem and do nothing, you're complicit in that behavior.

Also, failing to take action when you see a problem and know something can be done about it strikes me as conflict avoidant. I don't look for conflict, but I don't shy away from it when it comes to me.

4. finally, there are degrees of wrongness. Sure the EJ "friend" didn't murder anyone. Does that mean his behavior shouldn't be taken seriously because he could have done so much worse (a la Madoff)? I think that's a weak standard of argument. The guy either did something wrong or he didn't. If he did, he should be made to stop doing that. Otherwise, if the standard of wrongness is extreme (murder or madoff) that allows an awful lot of bad actors out there to continue offenses, albeit lesser offenses.

5. Finally, regarding the example of speeding, sure you could be reported. The likelihood is greater if you cause harm (cut someone off, drive recklessly, etc) or someone else would be reported before you if they sped more than you. If you speed and others are speeding you're technically breaking the law, but fortunately no one got hurt.

Thing is, in the OP's case, someone did get hurt. The OP did. He's losing out on money because the EJ "friend" is holding him hostage with the OP's family member. They're colluding to keep the OP at EJ and she has no business knowing how the OP's money is invested. Not what funds he's in. Not where it is. Nothing. If you think I'm wrong, let's see it in writing that the giver has any right whatsoever to control the OP's gift in any way shape or form.
The money is NOT op’s - it is his wife’s. I am not sure the advisor should talk to OP either.

[OT comment removed by admin LadyGeek]
I'm authorized to make changes/decisions on the accounts. So it's more like a joint checking. We don't need the others permission to purchase or withdraw funds.
However, it is your wife’s relationship with her grandmother that is atthe heart of this doscussion. You can make changes but ownership is still with your wife. If your wife doesn’t object to grandmas restrictions then the whole discussion should be moot.
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Re: Unique EJ situation

Post by tibbitts »

Everybody suggesting you even hint that this gifting could be done is some other way to reduce fees is completely wrong. This isn't even a close call.
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Re: Unique EJ situation

Post by beyou »

scsu74 wrote: Sun Dec 05, 2021 11:43 am
beyou wrote: Sun Dec 05, 2021 11:38 am Are you paying AUM management fees to EJ advisor or just commissions ? Is the account discretionary ?

Under the gifting circumstances, I would insist non-discretionary, meaning YOU decide the trades, not the advisor, so you can treat this as part of your overall AA, and buy funds you wont later mind keeping when eventually transferring out. I see nothing wrong with buying ETFs there (one time high commission) and later moving them anywhere.

Finally I would keep some in short term bond funds for ease of withdrawing without large cap gains, to pay any expenses from EJ vs holding similar emergency fund type of holding elsewhere. Can keep more equity outside EJ where you can avoid needing to sell and take cap gains in an account where you have longer term plans.
Just the load fees. It's non-discretionary, the cash just sits until I call him and direct it. That's what I've been doing, I re-balance/balance inside my 457 so there aren't tax implications. My AA is across all our investments, EJ is just a part of the larger portfolio. I don't hold a lot of bonds (10%) since I'll also have two pensions in retirement.

Starting Jan 1, I'll also be in the 0% long term bracket so was thinking about cashing out the American funds when I'll pay the lowest tax on them. Unfortunately, we'll still have to pay state tax.
You must use load funds ? Why not ETFs ?
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Re: Unique EJ situation

Post by Makefile »

tibbitts wrote: Sun Dec 05, 2021 11:35 pm Everybody suggesting you even hint that this gifting could be done is some other way to reduce fees is completely wrong. This isn't even a close call.
Yeah, thus I pointed out that version of the golden rule. The parallel being with some never moving away from full-service brokers, did you know that there is still a group of now-elderly (landline) telephone customers who never opted out of renting their telephone after the AT&T breakup in the 1980s and has racked up thousands in rental charges since then? For all we know the grandmother-in-law could be one of them, too :D
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Re: Unique EJ situation

Post by scsu74 »

nedsaid wrote: Sun Dec 05, 2021 10:36 pm
scsu74 wrote: Sun Dec 05, 2021 9:43 pm
nedsaid wrote: Sun Dec 05, 2021 9:35 pm
I am not saying that these issues don't matter, I am saying it is a battle not worth fighting.

In other threads, I can see that the Original Poster was taking steps to resolve issues more to his satisfaction. I have read all three threads, am pretty well up to speed what happened, and think there are two issues here: confidentiality and potential churning. They are more serious than spitting on the sidewalk or a speeding ticket but I have seen and heard worse things. Sad to say that despite strict regulation, it is still a "let the buyer beware" environment out there, particularly with the large full service brokerage firms.

Here is Investopedia's definition:
Churning is the illegal and unethical practice by a broker of excessively trading assets in a client's account in order to generate commissions.

While there is no quantitative measure for churning, frequent buying and selling of stocks or any assets that do little to meet the client's investment objectives may be evidence of churning.
Sounds to me like the original poster received cash and bought American Funds that the Advisor recommended. Later on, after learning about Vanguard and indexing, looked into moving the money to Vanguard. What was inexcusable was the Advisor calling the Grandmother (the giver) and telling her what happened. The the Original Poster learned that the money had to stay at Edward Jones or there would be no more gifts. So now, the OP was buying Vanguard ETFs instead of the American Funds for a commission of 2% rather than 5%. Hard to say if churning happened here but certainly breach of confidentiality.

Here's the deal. Grandma is a grown adult and she chose Edward Jones and the Advisor. Trying to help her is pretty much telling her that her decision to hire Edward Jones and the Advisor was a mistake, so of course you are going to get pushback. It is a difficult task to straighten out other's financial lives. She has developed a bond with the Advisor and evidently won't hear criticism of what he has done. So the OP is in a tough spot.

I have had a couple of family members with Edward Jones accounts. One family member had some money that he/she wanted to invest and I told him/her about Vanguard and investing inexpensively in Index Funds. It sounded like too much trouble to invest somewhere on the other side of the country so he/she went to the nearest Edward Jones office. It was sort of "blah, blah, blah, Vanguard, blah, blah, blah."

Another family member also has an account with Edward Jones and again proximity to home was a big issue. Edward Jones is everywhere. This family member has a Schwab account but their office is a 30-45 minutes away by car, a daunting task for an elderly person. So much easier to go see the local Advisor at Edward Jones. I gently suggested going to Schwab for financial planning and for portfolio management but I went easy not willing to interfere too much. I brought it up once and dropped the subject afterwards.

These two family members are both elderly, one is living and the other has passed away. I gave advice when asked but I didn't see my role as a caped crusader saving them from their own financial errors. Both were and are competent adults and this gets to be really a sticky situation. I don't see it as my role to go charging into other people's financial lives.

So I am not minimizing what happened here but trying to inject some realism into the discussion. The average person is not a Boglehead and that is hard for lots here on the forum to accept.
Very good points and correct in this case. GIL is 90 and has been with this advisor 40+ years. Same with all her friends. It's a small town and he's basically the guy everyone goes to. It's an ease and comfort thing at this point I'm sure.
Thank you for your response. You actually have a good situation though the arrangement with Edward Jones is less than optimal. I would be thankful, and I know you are too, if my wife's Grandmother gave money like this. The other side of this is that Grandma could have spent thousands on Attorney's fees getting trusts set up, so part of what could have been spent on Attorneys went to the Advisor.

I have lived in small towns myself and I know how the dynamics of a small community work. I just don't see what raising a stink over this would accomplish, you did the correct thing and had a talk with the advisor over the breach of confidentiality. I guess what I would say is that is life in a small town, many positives but also negatives involved.

My first job out of college, I lived in a County that had only one stop light and it was in the small town that I lived in. More cows than people in that County. It was actually two towns close together, one was the largest town in the County and the other was the County Seat. During the time I lived there, I suppose there were maybe 6,000 people who lived in the two towns. In contrast, I live in a metropolitan area where probably 2.5 million people live, quite a difference.

Sounds to me like you are doing the right things. Many best wishes for your future success and hope that everything works out well for you and your family members.

Ned
Thank you for the well wishes and taking the time to reply!
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Re: Unique EJ situation

Post by Parkinglotracer »

goingup wrote: Sun Dec 05, 2021 11:16 am I'm not an EJ fan, but if I were in this situation my response would be gratitude. Not understanding the struggle with getting free money.

Do as the gift-giver requires. Play the long game. In the future, when you are able, transfer to a low-cost broker. I think you will see that you American Funds perform just fine.
Yes this … say thank you profusely … but let’s make sure when WE give someone money WE do it better than the giver does it. Lol.
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Re: Unique EJ situation

Post by Wanderingwheelz »

Dottie57 wrote: Sun Dec 05, 2021 9:42 pm This is from a different thread where OP states the account in question is his wife’s.

viewtopic.php?p=4919869#p4919869
I hope the wife is aware of the nuances of handling an inheritance.
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Re: Unique EJ situation

Post by LadyGeek »

The discussion is getting contentious. Also, we maintain a family-friendly environment. I removed comments which used an adult situation as an analogy. As a reminder, see: General Etiquette
At all times we must conduct ourselves in a respectful manner to other posters. Attacks on individuals, insults, name calling, trolling, baiting or other attempts to sow dissension are not acceptable.
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Re: Unique EJ situation

Post by celia »

nedsaid wrote: Sun Dec 05, 2021 9:35 pm Here's the deal. Grandma is a grown adult and she chose Edward Jones and the Advisor. Trying to help her is pretty much telling her that her decision to hire Edward Jones and the Advisor was a mistake, so of course you are going to get pushback. It is a difficult task to straighten out other's financial lives. She has developed a bond with the Advisor and evidently won't hear criticism of what he has done. So the OP is in a tough spot.
Let me play "devil's advocate" for a moment. We don't know about the relationship between Grandma and the advisor and OP and his wife probably don't know much either. The advisor could have been the kid next door who Grandma used to babysit and the boy next door would mow Grandma's grass and shovel her snow. Grandma baked him his favorite cookies and watched him play baseball.

The boy's parents might have died as he turned an adult and Grandma could have told the parents she would keep in contact with him and help him out, if/when he needed it. Since the town is so small, there is a smaller group of potential clients, so grandma doesn't mind giving him extra commissions, so he can raise his family.

As sometimes happens, Grandma has more money than she needs, so much so, that she's been told her estate will be subject to estate taxes unless she starts giving some money away. "Good idea", she says, so she gives $15k away to each of 7 or 8 relatives a year. While at it, she wants the advisor to get some of it, so she sells and gives each of them cash, so she can pay the advisor some commissions. (If she gave shares instead, the receivers would have to pay more tax when they sell as they would assume Grandma's cost basis. So, OP is lucky here.)

So grandma is aware that 5.75% of each gift she makes goes to the advisor and 94.25% to a relative. That sounds fine to her. Would anyone here want 5.75% go to the relative and 94.25% to the advisor instead (although the advisor would then be receiving more than the yearly gift tax exclusion each year)?

Grandma has enjoyed SS for many years and wants the advisor to benefit from it too. So she is helping him earn higher income than he would otherwise. Grandma avoids the estate tax. Relatives get gifts. The advisor makes more money. This makes grandma happy as everyone benefits.

When grandma dies, her estate is split up as she has decided. Maybe she specified in her will that all the assets at EJ be sold before the money is dispersed. I wouldn't be surprised.

For all we know, the advisor could have had grandma sign a statement saying she was aware of all the commissions the advisor would get to protect himself from suspicious relatives.
Last edited by celia on Mon Dec 06, 2021 2:51 pm, edited 1 time in total.
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Re: Unique EJ situation

Post by arcticpineapplecorp. »

Nestegg_User wrote: Sun Dec 05, 2021 9:15 pm further suggestions:
1) insure that you DON'T use the same EJ salesman as your grandmother for any accounts
(there would be absolutely NO reason for one rep to look at the book of another... this would add to the violations towards the EJ rep)
The one way to get this to happen is that EJ is all over the country, but "advisors" (yeah, right) work best when they can directly interact (hence "local") {I assume that the OP isn't in the same immediate area of the grandmother}. Sometimes, especially for things like insurance companies, they want to have the agency and clients be in the same locales (obviously, for insurance it's because of state regulation). If one could get EJ itself to perform the transfer...it would be out of the reps hands (!!!) and the OP could do the "plausible deniability" of why it got transferred from her EJ rep...leading to...

2) set up a separate account (yeah, even if it's EJ...and would cause a "closure fee" in the future)...let's call this "account B"
--==> have the gifts go into the original account ("account A"), then transfer into Account B (and possibly others, like a separate 529). This means that, even though the original rep knows of the account number for the funds to transfer to, they won't know where the rest is. Insure that no info is directed to "Account A"... including auto transfers so that the GM's rep is "blind" to any activity...any knowledge that they would try to gleen would clearly show intent... and would be why I would go down HARD on any disclosures... (and even EJ might be leary, although color me surprised if they got canned unless they got SEC violations)


3) make sure all accounts don't allow their reps to make any changes w/o specific instructions (prevent churning) and especially don't allow for their funny annuities etc.
these are also very good suggestions. i wish i had thought of them myself. thank you for your contributions.
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Re: Unique EJ situation

Post by arcticpineapplecorp. »

Dottie57 wrote: Sun Dec 05, 2021 9:25 pm The money is NOT op’s - it is his wife’s. I am not sure the advisor should talk to OP either.
good point, though in a post below your's the OP says he's an authorized user on the acct (?) Not sure how/if that changes anything.
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Re: Unique EJ situation

Post by arcticpineapplecorp. »

Dottie57 wrote: Sun Dec 05, 2021 11:06 pm
scsu74 wrote: Sun Dec 05, 2021 9:45 pm
Dottie57 wrote: Sun Dec 05, 2021 9:25 pm
arcticpineapplecorp. wrote: Sun Dec 05, 2021 4:26 pm
nedsaid wrote: Sun Dec 05, 2021 3:11 pm You are hugely overreacting here. I have heard horror stories from the financial industry much, much worse than this. This is not blackmail. There is a problem here, there is a battle that could be fought here, but I am saying that the potential costs and hard feelings would be far in excess of whatever benefits are achieved from pursuing this battle.

There is lots of unethical and even illegal behavior out there in the business world. I have heard lots and lots of stories. What the Advisor is doing here is wrong but this is not a capital offense. This is a bit more than just greasy kids stuff but it isn't Bernie Madoff either. You make it sound like the Original Poster's money came from dealing with the Drug Cartels or something like that. There is a moral issue here but the issue isn't whether the Original Poster should receive part of an inheritance in advance as a gift, the issue involves conflict of interest of the Advisor and Confidentiality. The Original Poster isn't taking money from illegal drugs or prostitution.

Probably a better way for the giver to handle this was to set up trusts for the beneficiaries. The giver wanted to do something nice and to make gifts while still alive. The giver probably wanted to make sure the gifts were not squandered. We also don't know for sure what the giver and the Advisor discussed when setting this up. Not sure we know the whole story here.

Shoot, I probably drove 40 miles an hour in a 35 mile an hour zone while on my way to work last week. It was illegal behavior but cars would zoom right around me at 35 mph and on occasion even at 40 or 45. I suppose somebody should report me. What the Advisor has done is more than a speeding ticket but certainly not a capital offense.

Probably what I would do is after the giver is gone, file a complaint about lack of confidentiality in this situation and give the company and the advisor a chance to respond. This is a battle just not worth fighting at this time.
let me clarify a couple points.

1. you can say i'm over reacting. and I can say you're under reacting.

2. [OT comments removed by admin LadyGeek]

He's having to cowtow to another to get the money, even though there's nothing in writing holding him to EJ (except threats of being cut off from future money).

Perhaps the better metaphor is the trope of "Oh No! Mommy and Daddy will cut me out of the will if I don't become a doctor! But I want to be a ballerina! What am I to do? Woe is me."

3. To file a complaint after the relative dies is to prolong the unethical/unprofessional behvior. If you recognize a problem and do nothing, you're complicit in that behavior.

Also, failing to take action when you see a problem and know something can be done about it strikes me as conflict avoidant. I don't look for conflict, but I don't shy away from it when it comes to me.

4. finally, there are degrees of wrongness. Sure the EJ "friend" didn't murder anyone. Does that mean his behavior shouldn't be taken seriously because he could have done so much worse (a la Madoff)? I think that's a weak standard of argument. The guy either did something wrong or he didn't. If he did, he should be made to stop doing that. Otherwise, if the standard of wrongness is extreme (murder or madoff) that allows an awful lot of bad actors out there to continue offenses, albeit lesser offenses.

5. Finally, regarding the example of speeding, sure you could be reported. The likelihood is greater if you cause harm (cut someone off, drive recklessly, etc) or someone else would be reported before you if they sped more than you. If you speed and others are speeding you're technically breaking the law, but fortunately no one got hurt.

Thing is, in the OP's case, someone did get hurt. The OP did. He's losing out on money because the EJ "friend" is holding him hostage with the OP's family member. They're colluding to keep the OP at EJ and she has no business knowing how the OP's money is invested. Not what funds he's in. Not where it is. Nothing. If you think I'm wrong, let's see it in writing that the giver has any right whatsoever to control the OP's gift in any way shape or form.
The money is NOT op’s - it is his wife’s. I am not sure the advisor should talk to OP either.

[OT comment removed by admin LadyGeek]
I'm authorized to make changes/decisions on the accounts. So it's more like a joint checking. We don't need the others permission to purchase or withdraw funds.
However, it is your wife’s relationship with her grandmother that is atthe heart of this doscussion. You can make changes but ownership is still with your wife. If your wife doesn’t object to grandmas restrictions then the whole discussion should be moot.
very true. and this is why the details always matter. it's unfortunate that others (Dottie and Nedsaid I think) had to research the OP's other post to get additional details. I'm not always in the habit of going back to the history of a poster's old posts when the details should be listed in the current post.

if the OP has no authority over this acct, because it's not his and it is his wife's, he would need to discuss the matter with her but it's ultimately her call as to what, if anything she wants to do about it.
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Re: Unique EJ situation

Post by celia »

arcticpineapplecorp. wrote: Mon Dec 06, 2021 8:04 am
Dottie57 wrote: Sun Dec 05, 2021 9:25 pm The money is NOT op’s - it is his wife’s. I am not sure the advisor should talk to OP either.
good point, though in a post below your's the OP says he's an authorized user on the acct (?) Not sure how/if that changes anything.
arcticpineapplecorp. wrote: Mon Dec 06, 2021 8:08 am if the OP has no authority over this acct, because it's not his and it is his wife's, he would need to discuss the matter with her but it's ultimately her call as to what, if anything she wants to do about it.

I read it as OP has an EJ account, as does his wife and 3 children:
scsu74 wrote: Sun Dec 05, 2021 10:29 am It gets really bad when you realize she paid that on initial investment, we're paying it on the gift investment and 4 other family members she's gifting to are also each paying another 5%. 30% total he's making 😱
scsu74 wrote: Sun Dec 05, 2021 10:31 am It shows up as cash in our and children's accounts
In addition there are 2 or 3 extended family members, such as wife's siblings possibly, who have accounts.

I think someone clarified to the OP that it is 5.75% off of each of the 5 accounts which would be the same as 5.75% off the total of the five gifts for his immediate family:
5 * (5.75% * $15K) = 5.75% * (5 * $15K) = 5.75% of $75K
--or--
(5.75% * $15K) + (5.75% * $15K) + (5.75% * $15K) + (5.75% * $15K) + (5.75% * $15K) = 5.75% * $75K
Last edited by celia on Mon Dec 06, 2021 2:43 pm, edited 1 time in total.
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Re: Unique EJ situation

Post by arcticpineapplecorp. »

celia wrote: Mon Dec 06, 2021 2:35 pm I read it as OP has an EJ account, as does his wife and 3 children:
scsu74 wrote: Sun Dec 05, 2021 10:29 am It gets really bad when you realize she paid that on initial investment, we're paying it on the gift investment and 4 other family members she's gifting to are also each paying another 5%. 30% total he's making 😱
scsu74 wrote: Sun Dec 05, 2021 10:31 am It shows up as cash in our and children's accounts
In addition there are 2 or 3 extended family members, such as wife's siblings possibly, who have accounts.
thanks. i read it that way too, but deferred to Dottie who seemed to think it was not that way based on other posts I had not reviewed.
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Re: Unique EJ situation

Post by dbr »

arcticpineapplecorp. wrote: Mon Dec 06, 2021 2:41 pm
celia wrote: Mon Dec 06, 2021 2:35 pm I read it as OP has an EJ account, as does his wife and 3 children:
scsu74 wrote: Sun Dec 05, 2021 10:29 am It gets really bad when you realize she paid that on initial investment, we're paying it on the gift investment and 4 other family members she's gifting to are also each paying another 5%. 30% total he's making 😱
scsu74 wrote: Sun Dec 05, 2021 10:31 am It shows up as cash in our and children's accounts
In addition there are 2 or 3 extended family members, such as wife's siblings possibly, who have accounts.
thanks. i read it that way too, but deferred to Dottie who seemed to think it was not that way based on other posts I had not reviewed.
It isn't 30%; it is 5% of each piece on each piece, which is the same as 5% of the whole on the whole.

But seriously, charging a 5% load to buy a fund and then in the process liquidating the fund to charge a new owner 5% to purchase that holding again is surely unethical whether or not it could somehow be charged as illegal or as a civil liability.

Note the standard load on an American Funds stock fund, A shares, is 5.75% and on bond funds 3.75%. Also fund ERs range from .6%-1%.

I just don't know what the OP should do about this. It just seems that somehow the grandmother should be gotten to understand how much of her family's money is being taken away by this.
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Re: Unique EJ situation

Post by Nestegg_User »

dbr

as noted upthread, the grandmother has apparently been using them for many decades and with her location being a small town, with the concomitant small town associations etc, she's not wanting to change (the OP has apparently gone down that road... and since it's not his rodeo, has been advised that it's likely a losing situation... nothing to be gained (GM apparently isn't receptive in the least))

That's why I suggested what I did in the two posts... removing his access by effectively "blinding" him by having a different (and local) rep (even when keeping EJ, for some of the funds) and having a second separate account that any funds he received would go into. If the GM's rep can't get ahold of those transaction fees, since they wouldn't be on his book, that might lessen the hold that GM seems to want to maintain.
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Re: Unique EJ situation

Post by DoTheMath »

nedsaid wrote: Sun Dec 05, 2021 9:35 pm


Here's the deal. Grandma is a grown adult and she chose Edward Jones and the Advisor. Trying to help her is pretty much telling her that her decision to hire Edward Jones and the Advisor was a mistake, so of course you are going to get pushback. It is a difficult task to straighten out other's financial lives. She has developed a bond with the Advisor and evidently won't hear criticism of what he has done. So the OP is in a tough spot.
+1

I haven't read every post, but it seems pretty clear that this is not a fight worth having. Sure, it's galling that the EJ advisor is taking advantage of Grandma's trust, but the amounts skimmed by the EJ advisor from the OP's accounts are relatively small and it's not forever. Eventually you'll be able to move the money somewhere else. With that in mind I would focus on putting the money in a fund which can easily transferred elsewhere (in-kind, ideally) when the time comes with minimal tax consequences.

Somewhere I saw a suggestion of a 529 plan. Something like this would be your best chance of getting away from EJ with Grandma's approval. If it can be cast as something for the benefit of the grandkids which can't be done at EJ, then she might be open to the suggestion.

But even so, the real priority here is family harmony and showing love and gratitude to grandma, not pointing out mistakes that she has made or "tricking" her into doing something different than she wants.

I would be much more upset about the fact this EJ advisor has robbed Grandma of a nontrivial sum of money over the decades and seems to be pretty shameless about it. But it sounds like you'll have to bite your tongue for now.
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Re: Unique EJ situation

Post by Escapevelocity »

dbr wrote: Sun Dec 05, 2021 7:26 pm In the end it just demonstrates the insidious nature of the way these companies take advantage of investors who don't know any better.

There are probably very few examples of such egregious situations generally as people transact business of different kinds.
I can think of lots of industries that thrive on the principle of milking the customer to the maximum extent possible based on their emotions, ignorance or vulnerabilities:

- car dealers
- hvac installers
- plumbers/electricians
- weddings
etc, etc.
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Re: Unique EJ situation

Post by Dottie57 »

Escapevelocity wrote: Mon Dec 06, 2021 4:35 pm
dbr wrote: Sun Dec 05, 2021 7:26 pm In the end it just demonstrates the insidious nature of the way these companies take advantage of investors who don't know any better.

There are probably very few examples of such egregious situations generally as people transact business of different kinds.
I can think of lots of industries that thrive on the principle of milking the customer to the maximum extent possible based on their emotions, ignorance or vulnerabilities:

- car dealers
- hvac installers
- plumbers/electricians
- weddings
etc, etc.
Cable providers,
Most tv networks
Pharmaceutical companies
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Nate79
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Re: Unique EJ situation

Post by Nate79 »

Maybe Grandma is fully aware of the fees and is perfectly fine with it. Not everyone out in the world is against paying 1% or higher AUM, active funds, 5% loads, etc. Much of the world is built off of commissions structure. Only on Bogleheads do they get appalled at this structure of payments and investing.
dbr
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Re: Unique EJ situation

Post by dbr »

Nate79 wrote: Mon Dec 06, 2021 4:52 pm Maybe Grandma is fully aware of the fees and is perfectly fine with it. Not everyone out in the world is against paying 1% or higher AUM, active funds, 5% loads, etc. Much of the world is built off of commissions structure. Only on Bogleheads do they get appalled at this structure of payments and investing.
This is very likely true. It takes information and awareness to understand that these costs did not have to exist. The investor may also prefer to pay in exchange for the relationship they have with the broker.

My bottom line is to accept the situation and move on. Thankfulness for generosity is surely the trump card here.

(But I still can't stand 5% plus 5% just to move money, but we have to swallow it.)
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