Moving from Edward Jones to Fidelity or Vanguard?

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mcsquared96
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Moving from Edward Jones to Fidelity or Vanguard?

Post by mcsquared96 »

I'm hoping to shift my mother's funds away from Edward Jones. I've read several threads on here about reasons to move from Edward Jones and saw the suggestions to switch to Fidelity since they reimburse the fees for leaving EJ. I myself have my own retirement funds with Vanguard so am used to their website and interface and see many people on here recommend the three funds from Vanguard but I'm not sure if there's a similar approach from Fidelity if I go that route or if the fees would be worth it to go with Vanguard. Right now she has a lot of individual stocks which I was going to keep and some American funds which I was hoping I could switch to Fidelity or Vanguard funds but I'm not sure if there's a way to do that without triggering capital gains taxes. And overall I'm not sure if paying advisory fees at either place would be worth it or if I might as well stay at Edward Jones since they're just charging me per transaction. Thanks in advance for your help.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by LadyGeek »

Welcome! Can you please describe how, exactly, you will be moving your mother's funds?

Do you have Power of Attorney or are you hoping to convince her to do the move?

If it's the latter, consider that your mother may not want to make any changes. If she's perfectly happy with Edward Jones, forcing her to make a change she doesn't want can only go in the wrong direction. You'll be blamed for everything, regardless if she understands what's going on.

The best course of action is to point her in the direction of a Vanguard or Fidelity financial advisor and let them deal with it. You'll be off the hook and her fees will be quite a bit lower than what she's paying now.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by Jack FFR1846 »

To answer your question about a 3 fund at Fidelity, yes, there are many ways you can put together a 3 fund there. Also, keep in mind that you can do so buying ETFs from anywhere, so as a way I would do it, VTI, VEA and BND work quite well and there are no fees to buy/sell at Fidelity. I do have several accounts at Fidelity. Used to have one at Vanguard and also have a few at Schwab.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by mcsquared96 »

LadyGeek wrote: Tue Jun 28, 2022 6:46 pm Welcome! Can you please describe how, exactly, you will be moving your mother's funds?
Do you have Power of Attorney or are you hoping to convince her to do the move?
If it's the latter, consider that your mother may not want to make any changes. If she's perfectly happy with Edward Jones, forcing her to make a change she doesn't want can only go in the wrong direction. You'll be blamed for everything, regardless if she understands what's going on.
I have power of attorney as well as authority to manage her Edward Jones funds. She's 90 and in a skilled nursing facility. I guess I should have mentioned that as well since she's not saving up for future retirement the way I am and needs a way to cover the $9500 monthly nursing home charges which is why I'm trying to figure out a strategy for starting to withdraw from the account to cover that. We live in a small town and Edward Jones is pretty much the only in-person option and she doesn't know how to use the internet which is why I guess it was a good option for her at the time. Her EJ advisor retired a few years ago and I'm not very impressed with his replacement.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by mkc »

mcsquared96 wrote: Tue Jun 28, 2022 7:09 pm
LadyGeek wrote: Tue Jun 28, 2022 6:46 pm Welcome! Can you please describe how, exactly, you will be moving your mother's funds?
Do you have Power of Attorney or are you hoping to convince her to do the move?
If it's the latter, consider that your mother may not want to make any changes. If she's perfectly happy with Edward Jones, forcing her to make a change she doesn't want can only go in the wrong direction. You'll be blamed for everything, regardless if she understands what's going on.
I have power of attorney as well as authority to manage her Edward Jones funds. She's 90 and in a skilled nursing facility.
Is she well enough to sign (and have notarized) an agent form with Vanguard? They do not accept a Power of Attorney document, just their own form. The alternative is "Agent for an Incapacitated Person", which requires a doctor's letter.

Others can speak to what Fidelity requires regarding Power of Attorney (if they also required their own form and notarization).
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by mcsquared96 »

mkc wrote: Tue Jun 28, 2022 7:27 pm Is she well enough to sign (and have notarized) an agent form with Vanguard? They do not accept a Power of Attorney document, just their own form. The alternative is "Agent for an Incapacitated Person", which requires a doctor's letter.
Others can speak to what Fidelity requires regarding Power of Attorney (if they also required their own form and notarization).
Well she's not exactly mobile right now but assuming she will be within the next few months I could take her to the bank to get a form notarized.
I didn't realize it would be that complicated so I'll hold off talking with EJ since it sounds like we might be stuck with them.
Though we would still be in the situation of strategizing what to liquidate as she needs more money--should I maybe start a new thread for that or is there a FAQ for post-retirement questions?
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by valleyrock »

You can I'm sure find a notary who will come to you/her. There are traveling notaries, and her bank might do it as a courtesy, if you ask

If Edward Jones' fees are low for what she has there, and for what you need to do to help, maybe you don't need the added complications with moving to another firm. Focusing on care, etc. can be a lot in itself.

Still, if you make that leap, you/she signs up with, say, Fidelity, and they pull the securities in from E. Jones. You have to use the correct language and account(s) to get things pulled over and minimize costs. See, for example: viewtopic.php?t=205723.

Best of luck.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by LadyGeek »

Thanks for the explanation. My Mom is in a similar situation. I have full Power of Attorney for her account at Vanguard, as well as her bank account.

It's important to keep everything in one place so we can see what was discussed. Post your questions in this thread.

Regarding POA forms for account creation, I don't see why you can't sign as POA in place of your Mom.

I tried looking at the Vanguard POA forms, but the website prevented me from seeing the form. Don't ask. The website is mucked up - which is why I invest in Vanguard funds at Fidelity.

Fidelity's website is much easier. How to Set Up a Power of Attorney Clicking on the "If you prefer, you can use these forms." link, it looks like your existing POA can be used. Call them and tell them what you'd like to do. I'm fairly sure they'll be happy to provide guidance.

Consider that it may be easier to get on board with a Fidelity advisor to work through the process. Once you're comfortable with what's going on, you can stop using the advisor and proceed on your own.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by RetiredAL »

mcsquared96 wrote: Tue Jun 28, 2022 7:09 pm

I have power of attorney as well as authority to manage her Edward Jones funds. She's 90 and in a skilled nursing facility.
You will find Schwab the friendliest for you with existing POA documents to create new accounts for her, then you can direct Schwab to transfer the EJ accounts to Schwab. A Schwab local office can help.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by RetiredAL »

mcsquared96 wrote: Tue Jun 28, 2022 7:38 pm
Well she's not exactly mobile right now but assuming she will be within the next few months I could take her to the bank to get a form notarized.
I didn't realize it would be that complicated so I'll hold off talking with EJ since it sounds like we might be stuck with them.
Though we would still be in the situation of strategizing what to liquidate as she needs more money--should I maybe start a new thread for that or is there a FAQ for post-retirement questions?
There are Mobile Notaries. Her care facility can tell you who they see coming in doing this. I've used one for my Dad in Assisted Living during Covid lockdown, outside on the patio. Cost was about $50.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by blueskytoo »

I moved two accounts from EJ to Fidelity with very little hassle.
I transferred one account to Vanguard, with not much more trouble, but they were not much help, I had to do all the paperwork and deliver transfer orders by mail.

They, Fidelity, were completely aware of all the proper steps and paper work.

The process is two step, first, without advising EJ that anything is going on, set up the destination account at Fidelity.

Second, after the account is completely ready, Fidelity will send EJ a transfer order to move all the assets IN KIND, to Fidelity. There are no taxes resulting from this type of transfer.

Your Fidelity representative will do all these steps for you.

When this transfer is complete, set up the changes in mutual funds and other investments that you think most appropriate. There will be tax issues in the sales that you do for this step, but you can minimize that by only doing those sales that are needed now.

Last, but not least, any of her investments that are suitable to keep, will pass to heirs tax free even though they have taxable gains if she sells them.

Good luck, the initial steps are tedious, but after the transfer is complete, life is much easier. ETF's are the easiest type of funds to deal with for varying sales as needs arise, but two of the accounts that I am involved with remained half company stocks, as there were some quite good ones. I sold those that were not appropriate for the age and expected needs. The pharmaceuticals, oil stocks, and Coca-Cola were, and are, good dividend payers, and have gained a lot since removing from EJ.

Fidelity's fees are much lower than EJ's.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by mcsquared96 »

RetiredAL wrote: Tue Jun 28, 2022 8:37 pm You will find Schwab the friendliest for you with existing POA documents to create new accounts for her, then you can direct Schwab to transfer the EJ accounts to Schwab. A Schwab local office can help.
Hmm...I thought Schwab was a full-service expensive place with lots of fees like Edward Jones.
The closest office is 45 minute drive but I might give them a call anyway.
Most people on here seem to go with Fidelity or Vanguard so I'm curious how Schwab compares.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by RetiredAL »

mcsquared96 wrote: Tue Jun 28, 2022 9:50 pm
RetiredAL wrote: Tue Jun 28, 2022 8:37 pm You will find Schwab the friendliest for you with existing POA documents to create new accounts for her, then you can direct Schwab to transfer the EJ accounts to Schwab. A Schwab local office can help.
Hmm...I thought Schwab was a full-service expensive place with lots of fees like Edward Jones.
The closest office is 45 minute drive but I might give them a call anyway.
Most people on here seem to go with Fidelity or Vanguard so I'm curious how Schwab compares.
Schwab is as low cost as anyone. Yes, they have a "advisor manage group", but so does Fidelity and Vanguard, if you want them to do it all. ETF's have no transaction fee, including Vanguard ETF's. Many Schwab funds and ETF's are really low cost. SWPPX (SP500) has an ER of .02%.

Most important, Schwab will accept your existing 'in hand' POA to open an account. Give the local office a call and they'll tell you how to best do it, either by walk-in or mail-in.There is a several day approval process for external POA. I assume their legal dept has to review the external POA. In my case, Dad improved and I could wheel him in, so we used Schwab's POA forms, the account was ready the next day, and ACATS transfer was 2 days later.

Edit to add: I've been a Schwab client for 25 years. This was Dad's IRA. His IRA account is linked to my Logon ID. I've never created a logon for my Dad. He's still competent, but I 100% handle all of his financial affairs.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by Nutmeg »

I help several elderly relatives, one of whom lives in a SNF.

I have funds at both Vanguard and Fidelity. Fidelity allows the use of a POA on forms not their own. Fidelity attorneys reviewed one POA and discovered an error the drafting attorney had made. Most transactions as agent at Vanguard can be effectuated online, while most such transactions as agent at Fidelity must be handled by phone. My experience is that customer service at Fidelity is better than that at Vanguard, and Fidelity’s customer service is available many more hours than Vanguard’s.

I recommend asking the SNF whether they can help you with the need for notary services. Your mother won’t be the first resident to need a notary.

We set up a Treasury bill/CD ladder and are arranging for Fidelity to transfer money from the settlement fund to the brokerage account every month to pay for monthly SNF bills.

I can understand your not wanting your mother to have to pay capital gains taxes, but please consider that your mother has extremely high medical expenses and could therefore be in a low enough tax bracket that she has a 0 percent capital gains tax rate. Also, it is quite possible that you can do some tax loss harvesting and / or sell investments with the lowest gains. Have you requested basis info from Edward Jones yet?

Also, are you certain that the only fees your relative is paying to Edward Jones are transaction fees? My relative’s advisor told us that there was no AUM fee (which my relative understood as “no fees,” believing that he was doing everything for free as a service from the bank with which he was affiliated), but we discovered that the funds had front-end loads and very high expense ratios, which our relative didn’t realize and possibly doesn’t understand even now. Have you obtained a list of the investments and determined their loads and expense ratios? One might think she is saving money by avoiding a 1 percent AUM fee, but a 2 percent expense ratio is worse than a 1 percent AUM fee if most assets are subject to the expense ratio.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by mhalley »

The wiki has an article on 3 fund and talks about fidelity.

https://www.bogleheads.org/wiki/Three-fund_portfolio
There is also a more general investing ala bogleheads at fidelity.

https://www.bogleheads.org/wiki/Fidelity

Remember not to use zero funds in taxable account as you can’t transfer them out without selling.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by LadyGeek »

:!: With regards to a notary service, please understand what a POA actually does. There is no need whatsoever for Mom to sign anything.

All signatures in the document are signed by the OP as (use your real names) "mcsquared96 POA for (Mom)". This is also true for signing checks. The OP will have to present a certified copy of the POA document.

(Checks are endorsed as "For Deposit Only" with no need to sign anyone's name as long as it's not cashed.)

By "certified", I mean that the lawyer stamped / signed the document with his/her signature in a different color showing that it's not a photocopy and has legal authenticity.

The OP will need to have his/her signature notarized, that's about it. No notary within driving distance? No problem. You can get online notary services, such as DocuSign.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by Jack FFR1846 »

mcsquared96 wrote: Tue Jun 28, 2022 9:50 pm
RetiredAL wrote: Tue Jun 28, 2022 8:37 pm You will find Schwab the friendliest for you with existing POA documents to create new accounts for her, then you can direct Schwab to transfer the EJ accounts to Schwab. A Schwab local office can help.
Hmm...I thought Schwab was a full-service expensive place with lots of fees like Edward Jones.
The closest office is 45 minute drive but I might give them a call anyway.
Most people on here seem to go with Fidelity or Vanguard so I'm curious how Schwab compares.
Schwab has become a leader in lowering costs. I use them for ETFs in both taxable and one Roth. Transfers are not as easy as Fidelity. I recently attempted to transfer from Ally and they stopped the transfer, saying that they didn't have the required documents. We had, however sent the required, notarized documents in the mail, so I have no idea why they couldn't find them. I ended up looking and the ETF in Ally had gone into a loss so I just sold to take the tax loss and used the cash to buy at Schwab in a similar fund.

With my Vanguard account, I attempted to change a mutual fund into an ETF and the CSR told me that it could not be done without selling the MF, letting it settle then buying the ETF, which is completely wrong. They then send 2 documents to back up their wrong answer. I came on Bogleheads to find the double secret phone number for the ETF group who was able to make the change in about 2 minutes. I then moved the account over to TDAmeritrade because I've had it with incompetence.

Fidelity has been the best and easiest to move accounts for me. Between DW and me, we moved a bunch of accounts. How difficult it is depends on where it's coming from. For the easy ones, I had to do nothing but online work with a signature page that I printed, signed, scanned back in and placed in the file as a pdf. Much easier than when I moved an account to Vanguard where they sent me 2 snail mail "books" of forms with at least 200 pages for one stupid move. Fidelity wanted no more than the "from" last statement and signature page online. Zero snail mail.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by mkc »

LadyGeek wrote: Wed Jun 29, 2022 5:45 am :!: With regards to a notary service, please understand what a POA actually does. There is no need whatsoever for Mom to sign anything.

All signatures in the document are signed by the OP as (use your real names) "mcsquared96 POA for (Mom)". This is also true for signing checks. The OP will have to present a certified copy of the POA document.
Mom's signature would need to be notarized on Vanguard's POA/agent form... if OP prefers to move mom's funds to Vanguard and have authorization. After that, they will accept agent instructions for most things (but not all - banking cannot be changed, and in my experience they will not link a bank account that is titled jointly between POA grantor and grantee).
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by LadyGeek »

^^^ Thanks. (Vanguard) I obtained that POA more than 5 years ago and very likely had her sign the form. Two years ago, I was able to change her bank account info. So far, I have all the access I need to manage her account. Her accounts show up in my login as separately titled to her.

As for Fidelity, I haven't needed to interact with them with regards to a POA, but the website suggests that they don't need her signature. That's why I requested the OP call them to get the right information.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by niagara_guy »

I use Fidelity, Schwab and Vanguard and all are very good. I do not use any services (like financial advice) from any of them so I only pay the low fees (like 0.04%) at all 3 for the index funds that I have. Fidelity and Schwab do have some offices in larger cities, Vanguard has no offices so that might be a reason for you to pick Fido or Schwab.

I would not pay the high fees that EJ charges (maybe 2% fees per year?) since I can get low cost service at the 3 I mentioned above.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by mcsquared96 »

Nutmeg wrote: Wed Jun 29, 2022 12:29 am I can understand your not wanting your mother to have to pay capital gains taxes, but please consider that your mother has extremely high medical expenses and could therefore be in a low enough tax bracket that she has a 0 percent capital gains tax rate. Also, it is quite possible that you can do some tax loss harvesting and / or sell investments with the lowest gains. Have you requested basis info from Edward Jones yet?
Also, are you certain that the only fees your relative is paying to Edward Jones are transaction fees? My relative’s advisor told us that there was no AUM fee (which my relative understood as “no fees,” believing that he was doing everything for free as a service from the bank with which he was affiliated), but we discovered that the funds had front-end loads and very high expense ratios, which our relative didn’t realize and possibly doesn’t understand even now. Have you obtained a list of the investments and determined their loads and expense ratios? One might think she is saving money by avoiding a 1 percent AUM fee, but a 2 percent expense ratio is worse than a 1 percent AUM fee if most assets are subject to the expense ratio.
I don't know what basis info is. I'd probably be considered a newbie compared to all of you.
The funds my mother is in are definitely front-loads and when I tried to express that I didn't like them both EJ advisors I talked to tried to convince me they were best option and other types of funds had hidden fees since everyone had to get their money from somewhere. Although I wanted to move away from those funds, I wasn't sure if front load meant that my mother had already paid for them so might as well keep them. I do remember getting a list of charges from last year around $1500 total which I was still fuzzy on since they weren't related to transaction fees--not sure if you have to keep on paying into front loads. I feel like my EJ rep is rather condescending and doesn't have our best interests in mind.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by LadyGeek »

mcsquared96 wrote: Wed Jun 29, 2022 2:57 pm
Nutmeg wrote: Wed Jun 29, 2022 12:29 am I can understand your not wanting your mother to have to pay capital gains taxes, but please consider that your mother has extremely high medical expenses and could therefore be in a low enough tax bracket that she has a 0 percent capital gains tax rate. Also, it is quite possible that you can do some tax loss harvesting and / or sell investments with the lowest gains. Have you requested basis info from Edward Jones yet?...
I don't know what basis info is. I'd probably be considered a newbie compared to all of you...
We don't know your experience, so it's very important that we know where you're at. There's no such thing as a simple question. If you don't know the answer, the question is hard. We encourage investors to not be intimidated and please ask for help. Thank you for asking.

Nutmeg is referring to what's known as a "cost basis", which means how much you paid for those investments (and when). Why? So you can figure out how much profit / loss you made selling those investments. The IRS needs that info because you will pay taxes on the profit. You'll get some of that back if there's a loss.

Nutmeg's question is alluding to the fact that medical expenses are tax deductible on your Mom's tax return. High medical expenses means that your Mom's taxable income will be much lower than if she didn't have high medical expenses. The tax rate for selling those investments (Capital gains) is much lower if her taxable income falls within a certain range.

A question like this is a red flag, as understanding how taxes work is critical when working with investments (in a taxable account). Doing the wrong thing can cost you quite a bit in terms of taxes - and possibly cost you more than what you'd save by letting Edward Jones manage the account.

This is why I recommended you let a financial advisor with Vanguard or Fidelity handle everything. They do this stuff on a daily basis and will make sure it's done correctly. Let them do all the hard work and give it at least a few months for everything to get into place. At that time, you can decide to do it yourself, or simply let them continue to take care of this.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by RetiredAL »

Jack FFR1846 wrote: Wed Jun 29, 2022 6:54 am
mcsquared96 wrote: Tue Jun 28, 2022 9:50 pm
RetiredAL wrote: Tue Jun 28, 2022 8:37 pm You will find Schwab the friendliest for you with existing POA documents to create new accounts for her, then you can direct Schwab to transfer the EJ accounts to Schwab. A Schwab local office can help.
Hmm...I thought Schwab was a full-service expensive place with lots of fees like Edward Jones.
The closest office is 45 minute drive but I might give them a call anyway.
Most people on here seem to go with Fidelity or Vanguard so I'm curious how Schwab compares.
Schwab has become a leader in lowering costs. I use them for ETFs in both taxable and one Roth. Transfers are not as easy as Fidelity. I recently attempted to transfer from Ally and they stopped the transfer, saying that they didn't have the required documents. We had, however sent the required, notarized documents in the mail, so I have no idea why they couldn't find them. I ended up looking and the ETF in Ally had gone into a loss so I just sold to take the tax loss and used the cash to buy at Schwab in a similar fund.

With my Vanguard account, I attempted to change a mutual fund into an ETF and the CSR told me that it could not be done without selling the MF, letting it settle then buying the ETF, which is completely wrong. They then send 2 documents to back up their wrong answer. I came on Bogleheads to find the double secret phone number for the ETF group who was able to make the change in about 2 minutes. I then moved the account over to TDAmeritrade because I've had it with incompetence.

Fidelity has been the best and easiest to move accounts for me. Between DW and me, we moved a bunch of accounts. How difficult it is depends on where it's coming from. For the easy ones, I had to do nothing but online work with a signature page that I printed, signed, scanned back in and placed in the file as a pdf. Much easier than when I moved an account to Vanguard where they sent me 2 snail mail "books" of forms with at least 200 pages for one stupid move. Fidelity wanted no more than the "from" last statement and signature page online. Zero snail mail.
My experience with transferring accounts into Schwab is similar. For Dad's last IRA, it was online fill out a form, print it, sign it "me as POA for dad", upload it within Schwab's secure environment, and the ACATS transfer occurred in a few days.

Of note, the day after I transferred the 2nd ( the first was 30 days earlier) of Dad's IRAs from Wells Fargo, I received snail mail letter from WF saying my POA to his IRA's account was approved. I had fought with WF for 5 months over my POA rights at that point. When I discussed the issues I was having, Dad's lawyer said he too had trouble with WF, even to the point of WF ignoring Court Orders. I found Schwab was refreshing, the Admin said just come in with the POA and a copy of the WF account statement, and she'd take care of getting everything submitted. This was 3 years ago.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by mcsquared96 »

LadyGeek wrote: Wed Jun 29, 2022 3:40 pm Nutmeg is referring to what's known as a "cost basis", which means how much you paid for those investments (and when). Why? So you can figure out how much profit / loss you made selling those investments. The IRS needs that info because you will pay taxes on the profit. You'll get some of that back if there's a loss.

Nutmeg's question is alluding to the fact that medical expenses are tax deductible on your Mom's tax return. High medical expenses means that your Mom's taxable income will be much lower than if she didn't have high medical expenses. The tax rate for selling those investments (Capital gains) is much lower if her taxable income falls within a certain range.

A question like this is a red flag, as understanding how taxes work is critical when working with investments (in a taxable account). Doing the wrong thing can cost you quite a bit in terms of taxes - and possibly cost you more than what you'd save by letting Edward Jones manage the account.

This is why I recommended you let a financial advisor with Vanguard or Fidelity handle everything. They do this stuff on a daily basis and will make sure it's done correctly. Let them do all the hard work and give it at least a few months for everything to get into place. At that time, you can decide to do it yourself, or simply let them continue to take care of this.
Thanks for explaining the cost basis--it sounds familiar but I don't know the terms and it hasn't applied to my own taxes so far. I haven't been doing my mother's taxes though I know her tax preparer always asks for the receipts for her health expenses so I know he always deducts it. When I've asked the EJ person about tax stuff related to the account he's always referred me to an independent tax professional so I assumed financial advisors didn't want to be liable for giving advice about that.
Do financial advisors with Vanguard or Fidelity still have a better reputation than EJ people then?
How do people on the boards feel about Suze Orman or Motley Fool advice?
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by mcsquared96 »

I'm going to EJ advisor tomorrow, just to see what kind of advice he gives.
Last time we talked, he said that we needed to diversify portfolio since Chevron and the energy stocks had become such a high percentage. I see this as the stocks that are doing well when all the rest are tanking. When I asked what he would put it in instead he suggested Amazon or Google.
So maybe not the worse advice?
Meanwhile the real goal is to get income to pay for mom's nursing home so I was thinking for starters turn off reinvesting dividends would be an ok place to start and check to see which American funds are incurring high fees
And for my own accounts I added some of the 3 main Vanguard funds to my IRA and bought I bonds.
Sigh, I clearly am a novice at this.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by LadyGeek »

May I suggest you post your Mom's portfolio information in this thread using the Asking Portfolio Questions format? The template was designed to provide the information we need to see if this is what you really want to do. We may come up with a different approach.

If you get stuck, just do the best you can. If you have any questions, ask them here.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by mcsquared96 »

LadyGeek wrote: Wed Jun 29, 2022 8:56 pm May I suggest you post your Mom's portfolio information in this thread using the Asking Portfolio Questions format? The template was designed to provide the information we need to see if this is what you really want to do. We may come up with a different approach.
Oh OK. I guess I'll have to do some calculations then to put it in percentages format--it's a lot of individual stocks in addition to the funds. A good weekend project, thanks for the encouragement.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by mkc »

mcsquared96 wrote: Wed Jun 29, 2022 8:52 pm I'm going to EJ advisor tomorrow, just to see what kind of advice he gives.
Last time we talked, he said that we needed to diversify portfolio since Chevron and the energy stocks had become such a high percentage. I see this as the stocks that are doing well when all the rest are tanking. When I asked what he would put it in instead he suggested Amazon or Google.
So maybe not the worse advice?
Understand that Edward Jones "advisors" are nothing more than salespeople. They make money off over-complication and making you think you need them and can't do it yourself. They are not financially-savvy individuals who have a special sauce that no one else does. In many cases, they do not have a financial background. Individual stocks are not the answer.

They are highly skilled at "schmoozing". They are highly skilled at babble-talk to make you think they know more about finance than they do. Their job is to keep you beholden to them.

http://kronstantinople.blogspot.com/p/e ... -saga.html

There are countless topics here on Bogleheads where folks have wanted to get out from under Edward Jones after they realized just how bad that firm is.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by mcsquared96 »

LadyGeek wrote: Wed Jun 29, 2022 8:56 pm May I suggest you post your Mom's portfolio information in this thread using the Asking Portfolio Questions format? The template was designed to provide the information we need to see if this is what you really want to do. We may come up with a different approach.
The wonders of Excel! Here it is
total invested is low seven-figures

Total Stocks 70.35% of EJ Assets
ABBVIE INC (ABBV) 2.42%
ALTRIA GROUP INC (MO) 1.09%
APPLE INC (AAPL) 2.92%
AT&T INC (T) 1.6%
CHEVRON CORP (CVX) 10.28%
CLOROX CO (CLX) 3.67%
CSX CORP (CSX) 0.69%
DOMINION ENERGY INC (D) 0.41%
DUKE ENERGY CORP NEW (DUK) 2.9%
EMERSON ELECTRIC CO (EMR) 5.38%
ENBRIDGE INC (ENB) 1.56%
GSK PLC (GSK) 0.57%
HEALTHPEAK PPTYS INC (PEAK) 0.34%
IBM (IBM) 0.74%
JOHNSON & JOHNSON (JNJ) 1.65%
KELLOGG CO (K) 0.3%
KYNDRYL HLDGS INC (KD) 0.01%
MCDONALDS CORP (MCD) 6.11%
MICROSOFT CORP (MSFT) 2.044%
NEXTERA ENERGY INC (NEE) 17.93%
NOV INC (NOV) 0.36%
PFIZER INC (PFE) 0.27%
PHILIP MORRIS INTL INC (PM)1.32%
SHELL PLC (SHEL) 1.1%
SUNCOR CDA INC NEW (SU) 0.09%
TOTALENERGIES SE (TTE) 0.83%
VENTAS INC (VTR) 0.27%
VERIZON COMMUNICATIONS (VZ) 1.47%
VIATRIS INC (VTRS) 0.007%
VISA INC CL A (V) 0.52%
WARNER BROS DISCOVERY INC (WBD) 0.24%
WELLTOWER INC REIT (WELL) 1.43%

FUNDS total 29.4%
AMERICAN BALANCED A (ABALX) 3% Expense ratio 0.56%
AMERICAN CAP INC BUILDER A (CAIBX) 2.71% Expense ratio 0.59%
AMERICAN CAP WRLD GRW & INC A (CWGIX) 3.0% Expense ratio 0.75%
AMERICAN FUNDAMENTAL INV A (ANCFX) 3.27% Expense ratio 0.59%
AMERICAN INC FUND OF AMER A (AMECX) 2.9% Expense ratio 0.56%
AMERICAN INTL GROWTH & INC A (IGAAX) 4.91% Expense ratio 0.91%
HARTFORD MUNICIPAL OPPORT A (HHMAX) 1.65% Expense ratio 0.660%
LORD ABBETT BOND DEBENTURE A (LBNDX) 1.61% Expense ratio 0.760%
NUVEEN NC MUNICIPAL BOND A (FLNCX) 6.37% Expense ratio 0.770%
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by Nutmeg »

I apologize for not being clearer about cost basis for tax purposes in a previous post. Before you sell any investments, I recommend that you determine their cost basis. I recommend asking the EJ rep for that information tomorrow and seeing what his response is. The answer might influence which investments should be sold to fund SNF costs. If the info is unclear, this is the place to post questions!

I also recommend that you view tomorrow as information seeking and do not agree to sell or buy any investments until the whole picture is known.
Last time we talked, he said that we needed to diversify portfolio since Chevron and the energy stocks had become such a high percentage. I see this as the stocks that are doing well when all the rest are tanking. When I asked what he would put it in instead he suggested Amazon or Google.
So maybe not the worse advice?
Actually, I think this might be among the worst advice possible, given that your goal is to fund your mother’s SNF costs with these funds. Whatever you sell should be temporarily invested in a safe, short-term investment such as Treasury bills with maturity dates that that match her expected needs for the funds, not individual stocks, which have values that can vary greatly.

(Ok, admittedly, advice to invest the funds in beach properties or gold would be worse, but I hope you get my point).

I have been thinking about your situation because I was in a situation with my relative’s financial advisor (with a similar business model to that of EJ). When I politely asked for information about fees, he changed the subject and later commented on how persistent I was. I researched the investments on my own and discovered that some had front loads of more than 5 percent and expense ratios of more than 2 percent (as compared to many Fidelity or Vanguard ERs of less than .10 percent). I was never able to obtain basis info on two stocks. My relative still thinks that the friendly advisor helped out for free.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by little_star »

mcsquared96 wrote: Wed Jun 29, 2022 10:07 pm
The wonders of Excel! Here it is
total invested is low seven-figures

Total Stocks 70.35% of EJ Assets
[clipped to show a few of the high percentage holdings]
CHEVRON CORP (CVX) 10.28%
EMERSON ELECTRIC CO (EMR) 5.38%
MCDONALDS CORP (MCD) 6.11%
NEXTERA ENERGY INC (NEE) 17.93%
If you look at some of the higher percent holdings, the EJ sales rep is correct that the portfolio appears to have a strong tilt to the Energy sector. Does that mean you should sell these stocks? Maybe yes. Maybe no. One of the non-intuitive aspects of investing is that to "buy low and sell high" you need to sell the funds/stocks that are doing well to purchase funds/stocks that are underperforming. Having a target asset allocation (AA) helps get over the psychological hurdle of selling the "winners" to buy (potential) "losers". That is (should be) the role of a financial advisor too: to help you avoid panic selling when the markets go down and to help you maintain your target AA by rebalancing when appropriate.

That said, this appears to be a complicated portfolio (anything with individual stocks is complicated to me!). I recommend leaving EJ, but would probably recommend signing up for VPAS (if you choose Vanguard) or one of the other low-cost advisory services at the other low-cost brokerages (Fidelity or Schwab) to help with the transition.

It is important that you have documentation regarding cost basis before you sell anything. I recommend asking for a printout (and, also, an electronic file) of the cost basis for each holding during your meeting tomorrow. You will want the electronic file so that you can verify that the cost basis transfers correctly when you leave EJ (don't tell the EJ rep that this is why you need it!). You will want the printout so that you have something tangible to hold when you ask the EJ rep what he/she recommends that you do (don't do anything, though! Just say that you need to think about it some more before you take action!).

One of the other counter-intuitive ideas is to sell funds at a loss (for tax-loss harvesting), so don't be surprised if the recommendation is to sell some of the Energy stocks (at a gain) and some others (at a loss) to have net zero capital gains. Whether it is beneficial to tax-loss harvest depends significantly on your tax bracket (i.e., no point in doing so if the captial gains will be taxed at 0%), so view such a suggestion with some skepticism if there is not also a discussion of expected tax brackets.

Good luck with your meeting tomorrow. Gather as much information as you can. Report back here for a second opinion/explanation. You should only then take action if you understand the reasoning/rationale.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by mcsquared96 »

OK, just came back from over an hour chatting with Edward Jones guy.
One surprise was that he said of his own accord that he was a fiduciary and the American funds were a legacy of my mom's past financial advisor. He said that he personally liked MFS and gave me a whole list of other mutual fund companies including Fidelity.
I found the cost basis for each holding in the EJ portal though he said that it could change when dividends are paid out so maybe I misunderstood the definition as what I paid for the stock originally.
He agreed to adjusting the reinvestment of American funds and a few stocks to pay out the dividends which should at least bring in more income.
He said that if he had to sell he could do it over time to minimize taxes and also spread out among several so a little across all the different American funds rather than selling. The American funds would not incur commission fees in selling since they were front loaded.
He said if I switched to the managed option it would strongly recommend selling off some of the Nextera to rebalance the portfolio so the fee per-transaction basis sounds like it allows me to maintain more control.
So I think I'll hold off switching for now and meanwhile get tips from you all for possible changes and what I need to learn if I want to transition to managing on my own. That'll also give me time to figure out all the forms that I'd need to fill out and compare Schwab vs Fidelity vs Vanguard.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by LadyGeek »

mcsquared96 wrote: Thu Jun 30, 2022 5:45 pm I found the cost basis for each holding in the EJ portal though he said that it could change when dividends are paid out so maybe I misunderstood the definition as what I paid for the stock originally.
Dividends are taxed, regardless if they're reinvested.

If a stock pays a $5 dividend, you will be taxed for that $5. That changes your tax picture.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by Jon Luskin »

mcsquared96 wrote: Tue Jun 28, 2022 6:23 pm I'm hoping to shift my mother's funds away from Edward Jones. I've read several threads on here about reasons to move from Edward Jones and saw the suggestions to switch to Fidelity since they reimburse the fees for leaving EJ. I myself have my own retirement funds with Vanguard so am used to their website and interface and see many people on here recommend the three funds from Vanguard but I'm not sure if there's a similar approach from Fidelity if I go that route or if the fees would be worth it to go with Vanguard. Right now she has a lot of individual stocks which I was going to keep and some American funds which I was hoping I could switch to Fidelity or Vanguard funds but I'm not sure if there's a way to do that without triggering capital gains taxes. And overall I'm not sure if paying advisory fees at either place would be worth it or if I might as well stay at Edward Jones since they're just charging me per transaction. Thanks in advance for your help.
Be critical of fund recommendations by Fidelity sales reps. They'll often suggest higher-fee proprietary funds. It's generally best to ignore their investment recommendations. Stick with low-cost funds instead.

I hope that helps.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by hand »

mcsquared96 wrote: Thu Jun 30, 2022 5:45 pm ...he said of his own accord that he was a fiduciary...

He said that if he had to sell he could do it over time to minimize taxes...

... so the fee per-transaction basis sounds like it allows me to maintain more control.
Cherry picking here, but if I were an advisor who cared more about my own pockets than yours, I would tell you I was a fiduciary (even if I was not), suggest you make a bunch of small transactions over time and as your assets dwindled, move you from fees based on assets under management to per transaction fees.

The key questions are:
How much did I pay last year in total and as a percent of assets, and how much will I pay next year in total and as a percent of assets?
With the working assumption that 90% of the Edward Jones fees would go away if you moved to Vanguard, Fidelity or Schwab, is this extra cost worth it for the hassle of not moving?

My bet is that there is good reason EJ is not making this information easy for you to find.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by mcsquared96 »

hand wrote: Fri Jul 01, 2022 9:18 am
Cherry picking here, but if I were an advisor who cared more about my own pockets than yours, I would tell you I was a fiduciary (even if I was not), suggest you make a bunch of small transactions over time and as your assets dwindled, move you from fees based on assets under management to per transaction fees.
The key questions are:
How much did I pay last year in total and as a percent of assets, and how much will I pay next year in total and as a percent of assets?
With the working assumption that 90% of the Edward Jones fees would go away if you moved to Vanguard, Fidelity or Schwab, is this extra cost worth it for the hassle of not moving?
The fees are already currently per transaction not assets under management.
I think the only fees are the expense ratio for the American funds which I think came to around $1500 last year and then $25 for one transaction
People on here have been suggesting I use the managed options that Vanguard and Fidelity effort which might not initially save money but I guess people trust them to give me better advice
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by mcsquared96 »

Ok, I checked. From Sept20-Sept21 she had $1421.24 in fees and charges and 240.26 in commissions according to the summary EJ gave me.
So a lot less than than the managed service would be for any of the firms.
The fees are coming from expense ratio of funds from what I gather
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by RetiredAL »

mcsquared96 wrote: Fri Jul 01, 2022 2:05 pm Ok, I checked. From Sept20-Sept21 she had $1421.24 in fees and charges and 240.26 in commissions according to the summary EJ gave me.
So a lot less than than the managed service would be for any of the firms.
The fees are coming from expense ratio of funds from what I gather
AFAIK, a Fund ER fee does not show on an account holder's statement. A Fund's ER fees themselves are usually found deep in the prospectus. The ER % is easier to find as it's on the 'research' pages.
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Re: Moving from Edward Jones to Fidelity or Vanguard?

Post by Nutmeg »

Ok, I checked. From Sept20-Sept21 she had $1421.24 in fees and charges and 240.26 in commissions according to the summary EJ gave me.
So a lot less than than the managed service would be for any of the firms.
The fees are coming from expense ratio of funds from what I gather
The fees of $1421.24 are not coming from the expense ratio of funds. RetiredAL is correct; expense ratios don’t appear on account statements. Instead, the ER is deducted from the earnings of the mutual fund, thereby reducing your potential earnings. That is why it is important to compare ERs of funds.

It seems to me that EJ hasn’t fully explained the nature of its fees to you. If the only fees are transaction fees, as you thought when writing your OP, and EJ charged its standard $4.95 transaction fees, your mother had hundreds of transactions last year, which makes no sense for a 90-year-old in a SNF. Also, commissions received by the advisor do not fall under the category of transaction fees. The charging of commissions would indicate that he is not a fiduciary but a salesman. I recommend looking at the EJ disclosure statement to see whether EJ is disclosing a conflict of interest.
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