Edward Jones Review: What to Know When Choosing a Financial Advisor
Edward Jones operates the U.S.'s largest* network of investment advisory branches.
In fact, there are almost as many Edward Jones offices — 15,000 — in the U.S. and Canada as there are Starbucks coffee shops — 17,000.
This makes it a popular choice among people who want the face-to-face experience of working with a local advisor and the comfort of working with a national firm.
However, despite those potential benefits, I don't recommend using Edward Jones.
From conversations with former employees, it seems like most branches operate more like storefronts than advisory firms, and are focused on getting new clients through the door and into templated portfolios filled with expensive investment products.
While your exact experience will vary dramatically based on the specific advisor you work with (some are much better than others), all Edward Jones advisors are limited in the customization and depth of service they can offer.
You're much more likely to find higher-touch service from an independent financial advisor, and will probably pay lower fees.**
*In terms of the number of financial advisors.
**For this reason, many of the best Edward Jones advisors leave the company to become independent financial advisors.
Here's everything you should know before choosing to work with Edward Jones.
What is Edward Jones?
Edward Jones is a financial advisory company that was founded in St. Louis, Missouri in 1922.
The company took a unique approach to its growth, opening branches in small- and medium-sized cities across the United States and Canada. Today, there are more than 20,000 Edward Jones advisors operating out of over 15,000 offices.
This network has allowed it to establish massive reach and brand reputation across North America while still maintaining the 1:1 relationship style and accessibility of local advisors.
In all, Edward Jones advisors serve more than 8 million clients and manage over $2.2 trillion in assets.
Is Edward Jones a franchise?
No, Edward Jones is not a franchise — each branch is wholly owned by the company, not by the financial advisor working out of the branch.
However, each financial advisor does operate independently, managing their own book of business and generating their own profit and loss statements.
This hybrid approach provides financial advisors with the independence of running their own business while also receiving the support of a larger firm.
Edward Jones advisors earn a percentage of the revenue generated from their clients' accounts. Advisors who have been with the company for more than five years earn between 36–40% of their revenue generated.
How does Edward Jones work?
Target clientele
Edward Jones primarily caters to individual investors and local business owners.
While most of its advisors won't openly turn away any potential clients, they are looking for middle- or upper-income earners or people with moderate-to-high net worths.
There are minimum investment requirements that vary depending on what service level you want. You can read more about its service levels in the next section.
Service levels
Edward Jones offers three main service levels:
- Select Accounts: This is a basic account with no minimum investment. It's a self-guided option, meaning you have the final say in all decisions. You can invest in stocks, bonds, ETFs, mutual funds, and annuities. You can reach out to your advisor to ask for advice but you won't have the same level of service as you would with a Guided account.
- Guided Solutions: With this level, the decision-making is still yours, but you will receive more research and guidance from your advisor. Your account will have “guardrails” and automatic rebalancing so you don't have to worry about accidentally getting too far from your target allocations. There is a minimum investment of $25,000 and you will be billed based on the assets in your account.
- Advisory Solutions: The Advisory level is Edward Jones' high-touch, hands-off tier of portfolio management and tax planning services. There is a $25,000 or $300,000 minimum investment depending on whether you choose its Fund Model or its Unified Management Account (UMA) Model.
You can read more about the fees below, but first, let's cover the different investment models.
Investment models
If you select the Advisory Solutions at Edward Jones, you will have the option to invest in either its Fund Models or its Unified Management Account (UMA) Models.
Fund models
After determining your portfolio's objective (based on your age, risk tolerance, income needs, and total portfolio value), your advisor will help you choose from over 90 Fund Models, which contain unique mixes of mutual funds and ETFs.
The Fund Models are reviewed and rebalanced regularly to keep them in line with the research team's criteria. There is a minimum investment of $25,000.
UMA models
After determining your portfolio's objective, your money will be invested into a combination of mutual funds, ETFs, and separately managed accounts (or SMAs, which are professionally managed portfolios of individual stocks and bonds).
There are five UMA Models:
- Growth & Income
- Balanced Toward Growth
- Growth Focus
- Income Focus
- Balanced Toward Income
The first three have minimum investments of $300,000, while the latter two have minimums of $500,000.
Regardless of which UMA Model you choose, your account will be monitored and automatically rebalanced if it drifts too far from your target asset allocation.
While clients are placed into an investment model based on the results of their profile questionnaire, they are all pre-built portfolios that lack the depth and individualization of an investment strategy you may receive at a higher-touch independent advisory.
Fee structure
The fees paid by clients depend on which service level they're in — Select Accounts, Guided Solutions, or Advisory Solutions — and which assets they buy, sell, and hold in their portfolios.
Here's a breakdown:
Select Accounts
-
Trading commissions: Select Accounts are charged commissions every time they buy and sell an asset. The commission varies depending on the type of asset that is traded, but stock trades begin at 2.50% (larger trades are subject to lower fees).
Guided Solutions and Advisory Solutions
- Program Fees: Program Fees cover your financial advisor's services, trading costs, performance reporting, evaluation and selection of investments by the research team, and other services. These fees begin at 1.35% (additional invested assets are subject to lower fees) .
- Platform Fees: Platform Fees cover the support and maintenance of accounts on the platform, such as trading and risk tools, training and education, and ongoing platform development. These fees begin at 0.05% (additional invested assets are subject to lower fees).
Here's a look at its tiered fee structure for Program and Platform Fees:
| Program Fees | Platform Fees | |
| First $250,000 | 1.35% | 0.05% |
| Next $250,000 | 1.30% | 0.05% |
| Next $500,000 | 1.20% | 0.04% |
| Next $1,500,000 | 1.00% | 0.03% |
| Next $2,500,000 | 0.80% | 0.02% |
| Next $5,000,000 | 0.60% | 0.01% |
| Over $10,000,000 | 0.50% | 0.00% |
Additionally, each account is subject to the internal expenses of the mutual funds and ETFs owned in the portfolio.
For example, Edward Jones' mutual funds may include front-end load fees (a one-time charge for the initial purchase) as high as 5.75%, 12b-1 fees (an annual fee for marketing and selling the fund) as high as 1.00%, and expense ratios from 0.73–3.07%.
Altogether, the fees charged on client accounts may be exceptionally high.
One advisor calculated that clients who had moved from Edward Jones to his firm were paying, on average, 2.37% in fees per year before switching — more than double what most independent advisors charge.
You can see the complete fee schedule here, mutual fund fees here, and the commission schedule here.
Is Edward Jones a fiduciary?
Notably, Edward Jones advisors are not fiduciaries, which means they are not legally required to put their clients' needs ahead of their own.
Their advisors receive commissions for the investment products (primarily mutual funds) they invest your money in, which may tempt them to recommend investments with higher fees that aren't necessarily the most suitable for your portfolio.
To their credit, Edward Jones openly admits in its compensation disclosure that its fee structure could lead to conflicts of interest. However, more could be done.
Still, many of their advisors (but not all) choose to operate as if they are fiduciaries anyway, despite it not being a requirement.
Why I don't recommend working with Edward Jones
Despite having a solid reputation, a large presence in North America, and local advisors you can meet with regularly, I don't recommend working with Edward Jones.
Here's why.
1. Templated portfolios
New clients are asked to take a quiz, which covers their age, risk tolerance, income needs, and total portfolio value. Based on their answers, and what service tier they select, they will be placed into a pre-built investment strategy (known as a “model”).
Edward Jones advisors are confined to using these templated models — they do not have the freedom or investment options to build unique plans.
While these models do a pretty good job of asset allocation, they're far from the highly tailored plans you'd receive from a good independent advisor.
2. Low-touch service plans
Edward Jones limits its advisors to only providing templated investment plans so they can service as many clients as possible.
The company requires its advisors to follow a script-like approach to their plan building, which can result in clients receiving generic recommendations rather than specific solutions that reflect the nuances of their situations.
This lack of personalization makes it easy to serve many clients at once but fails to provide truly customized solutions (like goals-based investment management, tax planning, insurance recommendations, and more) for their clients.
3. Fees not aligned with investors' interests
As highlighted above, Edward Jones charges a wide variety of fees including commissions, management fees, platform fees, and internal mutual fund expenses.
In all, Edward Jones clients should expect to pay at least 2% per year in fees.
Additionally, Edward Jones advisors are not fiduciaries, which means they're not required to act in their clients' best interests.
This fact, coupled with the fact that they make their money as a percentage of revenue generated on their clients' accounts, may cause them to recommend investments that aren't suitable for their clients' portfolios.
Conversely, most independent financial advisors charge around 1% annual fees and do not receive kickbacks or commissions for the investment products they recommend (they are known as “fee-only” advisors).
Alternatives to Edward Jones
Here are a few alternatives you may consider instead of Edward Jones.
1. Independent financial advisors
If you want to hire an expert to manage your finances for you, you should look for an independent advisor who is a fee-only fiduciary.
Unlike one of the generic models Edward Jones will put you in, a good financial advisor will build a unique plan from scratch for each of their clients. These plans are tailored to the clients' exact needs and financial goals.
In addition to investment management services, a good advisor will provide tax planning, insurance recommendations, and advice on real estate or other investments.
Plus, most will only charge 0.70–1.20% — much lower than Edward Jones' total fees.
I interviewed Drew Lunt, founder and lead financial advisor at Scratch Capital in Boise, ID (a fee-only fiduciary) for this article.
You can get a free, custom financial plan built by Drew by filling out this form.
2. Self-directed investing
If you don't want to pay the fees for a professional advisor and have the willingness to learn how to manage your own money, you should consider becoming your own advisor.
There are countless books, podcasts, and videos that will teach you how to manage your own portfolio. The information is out there — you just need a willingness to learn.
You can use an online brokerage like Fidelity, Schwab, Vanguard, or Public (and get started for free or close to it).
3. Robo-advisors
Alternatively, if you're not interested in learning how to do it yourself, don't mind having a basic templated portfolio, and are willing to pay 0.25–0.50% in annual fees, you could choose a robo-advisor.
While you won't receive personalized investment advice or help with saving money on taxes, robo-advisors do a solid job of investing your money in diversified investment portfolios.
If you're young and want to take a set-it-and-forget-it approach, a robo-advisor might be a great option (I like Betterment).
Pros and cons of working with Edward Jones
Below is a summary of the pros and cons of working with Edward Jones, in my opinion:
| Pros | Cons |
| Convenience of working with a local advisor | Generic portfolios not tailored to your specific situation |
| You will always work with and be able to reach a real, human advisor | May receive low-touch service due to your advisor having too many clients |
| The company has an established reputation and many locations | Expensive, commission-based investment products and many other miscellaneous fees |
| Experience will vary depending on advisor | |
| Advisors are not fiduciaries, though some may operate as such |
Final verdict
Your experience working with Edward Jones will vary dramatically based on the specific advisor you work with. Some are much more knowledgeable and take better care of their clients than others.
However, even the good advisors would be able to serve you much better if they weren't hamstrung by the limited investment options, high fees, and sales-first business model of Edward Jones.
For these reasons, rather than working with an advisor from Edward Jones, I would recommend working with an independent advisor, getting a low-cost robo-advisor, or learning how to manage your own investments.
