Is Edward Jones a Scam?
Several years ago I worked as a Financial Services Rep for a very large company based out of New York. I was with the company for about 5 years, but of the 20 reps that were hired around the same time as me, only about 3 of us made it past the second year. Everyone else either left the company or were let go because of non-performance. The amazing thing about the loss of 85% of my training class was that we were TOLD UPFRONT that this would happen…our boss told us that very few people survive the financial services industry past the first couple of years!
This sounds crazy doesn’t it? Why would a reputable firm hire so many people knowing full well that the majority of them would be gone in two years or less? TRAIL COMMISSIONS?
Several other reps told me that often financial services companies are happy when a rep leaves, because the company no longer has to pay them yearly commissions on the products that were sold in the past. I don’t know if this is the case or not, but the whole recruiting process seemed like a whole lot of work to only keep 2 or 3 out of 20 recruits.
ANYWAYS, I tell my story because I know several Edward Jones reps, and from the outside looking in, Jones seems nothing like the company I mentioned above. Everyone I observe that works at Edward Jones seems to be doing fairly well…nice office, assistant and great marketing.
The reason I ask the above question though is because last year someone I know personally, and considered an extremely successful Edward Jones adviser, was let go from the company for what seemed like a minor misunderstanding. Of course I don’t know all the details, and have never worked for Edward Jones, but I’m interested to know if anyone out there who is reading this blog post has had any similar experiences with Edward Jones. I’m interested in any feedback on how they treat their reps!
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February 23rd, 2011 at 8:00 pm
Since you worked for more than 2 years, did you get commissions for the previous years?
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February 28th, 2011 at 3:30 am
I really hope someone who has some insight responds to your post because I would be interested in learning more about that company, as well.
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March 5th, 2011 at 12:56 am
Good Post!
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March 23rd, 2011 at 4:45 am
I have been an advisor with Edward Jones for 16 years and can assure you that if an advisor is legal, ethical, compliant and profitable they would not be removed from their position. They would not be let go for a “minor” issue. Dealing with people’s careers and lives is a very serious issue. The comments about Edward Jones being different from many other firms is spot on. There is a reason that Edward Jones is consistently rated the best firm to work for in our country. Of course not all reps succeed in our business but my experience has been that everyone is treated very fairly and given every opportunity for success.
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Mike Harris Reply:
October 5th, 2011 at 3:32 pm
I was an advisor with Jones for seven years. I am very glad that your experience with Jones has been positive. Edward Jones is not a scam, but it is an investment firm not unlike any other. They do a great job mixing and administering the koolaid that keeps the “family” in line and singing the tune they want. The attrition rate for jones is about the same as for all other investment firms. It takes an individual with strong entreprenurial character to stick it out for the first five or six years while building a practice. It is that very spirit of independence and drive that often gets them fired. Jones works very hard to promote the family friendly community of advisors in the field force, but has the same backstabbing dog eat dog corporate culture as every other big company in the home office. I was “given an opportunity to resign” because I made made my FSD accountable for his mistakes that cost me a client and several other peices of business. This embarrassed him. His vendetta culminated in an unscheduled audit of my office in which several bottles of wine (unopened) were discovered. Evidently, this was a firing offense. I had been making wine and giving it to friends (including area and regional Jones managers) and clients as Christmas gifts for years. It took me seven years to build that business from scratch. None of my “brothers” protested because they all gained from my departure. Assets that I had gathered were redistributed to other advisors in the area. Edward Jones legal department made it very clear the the non-compete clause in my employement contract would be strictly enforced should I attempt to contact any of my clients for at least a year. I have since started over as an independent RIA. I had a lot of offers after Jones. Every firm read my U5 (yes it follows you for the rest of your life) and thought it was ridiculous. I have put this part of my life behind me and bear no ill will toward anyone at Jones, mostly for my own benefit. However, for anyone considering a career there, . . .beware. The touted “family culture”, high ratings, and slick TV ads are a carefully fabricated and well maintained facade.
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Joe Smith Reply:
January 16th, 2012 at 8:13 pm
Did you have any issues with the non-compete after you started your RIA?
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Mike Reply:
January 25th, 2012 at 3:10 pm
Nope. But I adhered to the terms of the non-compete. I waited a year. By then, the relationship is gone. I started over.
Judy Reply:
May 4th, 2012 at 7:35 pm
My family had a similar experience. My husband was there 15 plus years and brought business from another financial firm. He is now with another firm. Took his top tier clients and is doing very well. He has 2 large garbage cans in his office filled with EJ awards for service excellence etc etc. They do not live up to all their propaganda in my humble opinion.
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May 19th, 2011 at 10:29 am
i met this really nice guy on a greyhound once (maybe train or plane, can’t remember) and we started chatting, and he told me about how he worked as a financial advisor for edward jones, and that i should come in to see him at his office to discuss me maybe working there.
i was out of work at the time, so i went down there and he told me about the gig.
basically, you rent office space from edward jones, and you sell edward jones products, but you totally work for yourself. so there is no real job security. you have to build your own customer base and be continually growing and selling to more and more people.
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James Gardner Reply:
February 4th, 2012 at 7:49 pm
If you want or need job security, an FA position may be a poor fit. Edward Jones has and will attempt to enforce a noncompete clause.
I would avoid any firm that demands a non compete agreement.
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July 6th, 2011 at 4:32 am
The comments about Edward Jones being different from many other firms is spot on. There is a reason that Edward Jones is consistently rated the best firm to work for in our country.
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July 20th, 2011 at 12:24 am
I was an advisor at EJ for 3 years…great training, but very limited product offerings. have since gone independent, able to service clients with a broader variety of investment products, and in a manner I see fit…I wouldn’t look back.
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October 18th, 2011 at 1:56 am
To MP and App Development,
I was first a wholesaler for a number of years before coming to Jones to get off the road. I was there for 11 years before making a move to anther company. Jones is not a ‘bad’ company and they have some good people that work there, but they are a company based on selling investments – not managing money. You can ask any veteran that has been at Jones for any length of time if they can think of just one (1) ’successful’ advisor that came to Jones from another firm. They will not be able to come up with one name. Their ’system’ works because they can train someone with no investment experience to only know their way and get them to believe it is the only right way and everyone. else is out to take advantage of investors. They have a great training program for this very reason.
Jones is very similar to Amway. It is one big pyramid and all you need to do is become a general partner and your financial success is secure. With the partnership average return of over 65% per year that is a nice income flow for every $100,000 or for many of them $1,000,000 of partnership they own. If that is your goal that is not a bad plan.
But if your goal is to manage your clients money with real research and no conflicts of interest (jones preferred vendors) and do it in the most cost effective way YOU CANNOT DO IT AT EDWARD JONES!! I know you have been told otherwise but I challenge you to do some due diligence by visiting some other firms to check out their technology, fees, investment platforms, and research. If you have only driven a chevy for your whole life as a driver and never have tried driving a Lexus you have no idea of what you are missing. I know you are thinking right now that I am nuts but you only think that way because that is what you have been ‘told’ by other good people who were also told the same thing over and over again. After you do your due diligence you will either confirm your decision to stay at Jones or you will be blown away (like I was) and realize you can do so much more for your clients and for yourself. (I would not consider a warehouse firm for your due diligence)
Let me warn you though, Jones is firing advisors they “think” might be leaving. I have a close friend that I helped get hired at Jones many years ago (approx 10) tHat was in the top 15% at the firm. He went to visit his dad who was dying of cancer and while he was there told his sister that he was never going to leave Jones. He went to visit Wednesday to be there for a hospital procedure with his dad on thursday and went home that night. On Friday morning he was met in his office by his regional leader and area leader and the only thing they said was “you are done here, apparently we are going different directions!”. They didn’t ask where he was didn’t ask his intentions, they just fired him. On his u4 Jones even stated the reason for termination was inappropriate behavior – the advisor was planning on leaving the FIRM! In working with the attorney group with the firm he landed at they said Jones has changed their strategy to firing anyone they think is leaving so they can get a jump start on the Advisor and get to the clients first. This firm said at the time (jan 2011) jones has fired over 200 advisors within the last 6 months. It is real and it is happening around the country. Don’t think Washington is the only group that knows how to spin information!
I could go on for hours (at least by typing) trying to open your eyes but it is getting late for me. You can stay comfortable at Jones and hopefully not hurt your clients or you can take your clients to another level by moving to a firm that is willing to spend the resources to help you do a better job for them. Until you go visit other good firms (like Stifel Nicolaus or Raymond James) you will truly never know the truth!!!
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Judy Reply:
May 4th, 2012 at 7:38 pm
Totally agree
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November 9th, 2011 at 10:40 pm
Jones is a notch below a lot of other firms as far as their capabilities and their platforms. I worked for them years ago and left to work for a wirehouse. There is not way that some kid right out of college or a retired military sargeant out on his own in some little town is going to be able to compete with the big guys. Sorry. The only thing I can’t understand is why they don’t lose more people. Although, their production per FA is a lot lower than the larger firms.
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November 11th, 2011 at 10:34 pm
I was at Edward Jones for 11 years. I was a successful women with the firm. I became burned out with all the volunteering to help the struggling FA’s. I was spending usually 8 hrs a week on avg helping others (this was the Jones way, they would bribe you that it would get you more partnership).
My intention when I started was to do financial planning, NOT sales. The Jones mentality is Selling product not on financial planning (regardless of what they tell you). They will hire anyone that has sales skills and someone that has no experience. They train you to be a sales person, not an advisor. Then they tell you that you can choose off of this fixed menu. One size fits all.
As time went on, I realized that there were better places to serve my clients. To me, that was what it was about, not my broker/dealer. Who was goign to support me take care of my clients.
The other thing that drove me crazy is that Jones wants to control everything,what the temperature of my office was (they actually had some company come in and have the temperature controlled by some computer) who I meet with in my office, when I get a replacement copier, (my staff wasted hours with a bum printer and they really stupid about getting me one, took months casue I wasn’t already lined up to get one) sign, etc. I had a President meeting in my office for a networking group that I belonged to and got fined 1000 for it because it was not an official Jones meeting and I did not have approval for it.
I will also tell you that Jones is a marketing company not an investment firm. The people that run the firm are good marketing people, that;s all. Everything is really about lining the general partners pockets. It is definitely not about being the best advisory firm for their clients.
Jones does not take good care of their advisor NOR to they really care about them. It is all about the general partners. And if you doubt the koolaid that they want you to drink, then you become an enemy and they turn their backs on you.
By the way, to all those people that said they are a different company and they keep getting awarded best company to work for, WAKE UP. Again this ranking is all about hiring people. To get ranked high, they have a full time person that works to get this ranking. She hand picks the people that talk to the magazine. The magazine is basically using the info that is supplied by the firm. One year, I was asked if I would talk to the magazine and I said yes. The women wanted to interview me first to see if I would be a good fit. She wanted to coerce me to say that Jones was a better place to work as a mother and the other jobs that I had were not as flexible as a mother. I told her that I could not say that. My corporate America job was actually more flexible and I got paid time off for sick, vacation, etc. At Jones you don’t work, you dont’ get paid. Anyway, she told me in a nice way, that I wasn’t a good person to talk to the magazine so she wasn’t going to give me name to them to contact me. So there, it is really a facade that ranking.
I would say that Jones is a good company to start in the business if you can’t get hired by anyone else. Don’t stay longer than 5 years.
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November 12th, 2011 at 4:23 pm
Beware of Jones! Lots of big promises, but very hard to actually make a good living.
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November 16th, 2011 at 3:17 am
I have a relative that “hired” Edward Jones to manage their money. I can tell you that it has been a nightmare for my family member as this company has poorly managed the money and lost several hundred thousand dollars of my relative. Of course, like any other business, their interest is NOT in their clients, but in their own best interest. Whatever is making them rich will prevail every time, they could care less if you make a dime. So, please learn from my relative’s mistake, and before you hand your life savings to the fat, greedy, thief at Edward Jones, think again, because they just may leave you broke.
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November 16th, 2011 at 10:22 pm
I am currently an FA with Jones, I have recently gone out into the field and quickly realized that this company is not for me. The prospecting method for Jones is just not for me (door knocking). I have another offer from the competition, not as a FA but more of a BOA position. They want to transfer over my licenses but I’m afraid of getting hit with the $75k training fee? Anyone have any advice?
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November 30th, 2011 at 3:38 am
I was with Jones for a couple of years. I can’t speak for other investment firms but I don’t see as they are much different. They all want you to focus on commissions and your job depends on it but all the while they preach doing what’s right for the client. This is a big conflict of interest. You cannot do both. If I had focused on bringing in the commissions more and less on what was right for my clients, I’d still have a job.
They are pretty upfront on the amount of cold calling and door knocking you will have to do. What they don’t tell you is that some FA’s get help with assets and others don’t. If you are one of the fortunate ones, you have a much better chance of surviving. FA’s who are not helped out with assets cannot make it. Its less than 1% that actually make it. Don’t do it unless you have a guarantee of asset sharing!!!
As for the noncompete, I’m not sure but I think if you get fired, you are ok.
Unfortunately their are bad FA’s in every company. Best I can say is don’t go with anyone new as they are chasing the commissions to keep their job. The older FA’s are more established and not desperate. However, the problem is they don’t really need the business so they are choosy about the clients they take on and if you don’t have significant assets, they don’t want to waist their time. High maintenance, low asset clients are given away to new FA’s. It’s a vicious circle. You can’t win.
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March 11th, 2012 at 1:42 am
Every one need to know Edward jones is a real bad place to leave your money they will steal it and leave you broke they will all pay by a higher court some day I pray every day they all get there . They stole my money and my life .
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April 6th, 2012 at 8:00 pm
Is it true the the ‘financial advisors’ do not have college degrees? How is this legal?
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April 20th, 2012 at 5:54 pm
Many Jones Advisors do not have degrees as they are not required – sales experience is far more important. I am a former Jones Advisor who is now an independent with LPL. Jones is a great place to start, but the nicey-nice is a facade. You can bring in assets all day long, but unless you’re producing lots of $$$ you are not safe. Of course that’s typical of any firm, isn’t it? So, go to Jones – learn what you can and do the work. Chances are you’ll outgrow them. The non-compete didn’t stop about 85% of my clients following me in the first year – and I didn’t have to violate my agreement.
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