Edward Jones

Jazzycat

Hi,

we recently had a company called Edward Jones call at our house (and all the others in our village) with a view to offering investment advice.

We later saw the "salesman" although he describes himself as a stockbroking service. He went through a few options for us about maxi isas and investment funds. I asked about fees and he said that with the maxi isas there is a 3.5% initial start up fee with ongoing costs of about 1% a year.

Is this about right?

The investment funds were with big companies such as Legal & General etc. I think I saw another for a firm called Newton?

He compiles a "risk" analysis to establish what type of investor we could be. We are looking to invest about £20k for the next 5-10 years and he has proposed a maxi isa for each of us and the balance for an investment fund. He considers an average return of 6-8% per annum could be achieved.

As this man can't be a IFA would an IFA suggest these products and do the fees sound about right. He is due back in about 3 weeks and I want to make sure that we are doing the right thing.

To be honest door selling does seem odd, but I think the firm he is with self employs people like himself, so I guess its in his own interest to push his services. I know they are an American firm expanding into the uk.

Any advice please.

savingforoz

I'd give him a wide berth and do your own research concerning investments. The companies, figures and suggestions that he has quoted seem fine, but there's no need to pay 3.5 - 5% initial fees, if you do things yourself and go through a discount online broker like Hargreaves Lansdown, you should get to invest without paying any initial commission, or maybe only 0.5%.

The advantage of doing your own research (it's not hard) is that YOU are in the driving seat of sorting your investments, not just passively handing money decisions concerning your finances to a door to door salesman. Check out threads on the rest of the Savings and Investments forum, make some more posts yourself, and check out sites like https://www.fool.co.uk, https://www.incademy.com, https://www.trustnet.com, https://www.fidelity.co.uk, https://www.hargreaveslansdown.co.uk. The book "Fundology" by John Chatfeild - Roberts is good, too.

dunstonh

Or if you dont want to do your own research and want an IFA to do it for you, then you get IFAs charging on new model basis at 1% initial and 0.5% p.a. Not far off the execution only companies mentioned by savingforoz

Whilst there is no reason to think that Edward Jones would do nothing but a good job, the fact they are cold calling at houses and operate a salesforce are two things that would put me off.

oldagetraveller

By coincidence a woman cold called a few weeks ago. Presented a business card, Edward Jones, Canary Wharf? and a colour leaflet. Said they were opening an office in the area and canvassing for new "clients." Not thinking I gave her my name and 'phone number but more or less said I was not interested.
A couple of weeks later she 'phoned with an offer about a Tesco savings account with 8% guaranteed interest. All I had to do was send her a cheque for £20,000!!!!, why she assumed I would have that amount to invest I don't know, and she would look after the rest. Yeah right. Obviously told her "no thanks."
I checked with Tesco and they have no such account on offer so very suspicious of anyone claiming to be from this particular company - if they exist.
Not heard from her since then.

dunstonh

oldagetraveller, you are correct to be on guard. Indeed, for the safety of others, you should report the incident to the FSA as that has breached many rules. We don't need this sort of cowboy outfit operating in this country.

There have been a couple of US companies try to set up in the UK and operate in a similar fashion to what they do in the US. The US model just doesnt work with the UK regulatory system (thank goodness). The other US company got fined by the FSA and had to do some retraining of their salesforce.

Also, it doesnt mean that Edward Jones is opening an office in your area. It means they have employed someone to their salesforce (241 currently) who happens to live nearby. For reference, they have also had more than 250 salesman leave them since 2001 (the fsa website can only show a maximum of 250 without filtering). So, in the last 5 years they have had more people leave their salesforce than are currently working for them. That would suggest a high pressure sales process which isnt working.

There is also another Edward Jones & Co Wealth Management who is a single trader IFA who has nothing to do with this company but has the real life name of Edward Jones. Good job his parents didnt call him Allied Dunbar

oldagetraveller

Thanks for that dunstonh, I might do just as you suggest. Obviously they do exist and I only noticed the reference in Jazzycat's post after submitting my own - must pay more attention!
I did carry out an internet search for them (UK only) and think the only result was the other company you mention.
I threw away the glossy brochure and business card and don't remember the woman's name but hopefully the FSA might still be interested.
No matter how legitimate any company may or may not be I don't like "cold calling " anyway.

cheerfulcat

Some uncomfortable reading for EJ

Some interesting stuff here, from the Daily Mail

HTH

Cheerfulcat

heppy23

I would avoid taking financial advice from someone who has cold called you on your doorstep.

Jazzycat

thanks everyone - I'm not going to be dealing with this firm.

Too many alarm bells ringing.

I really appreciate all the fantastic advice here - thank YOU

amosworks

There's an Edward Jones office in my home town and it seems quite a respectable place, everything checks out. But I would think it best to always go and see an IFA at their premises and not yours, unless you know them extremely well.

dunstonh

amosworks wrote:

There's an Edward Jones office in my home town and it seems quite a respectable place, everything checks out. But I would think it best to always go and see an IFA at their premises and not yours, unless you know them extremely well.

I disagree on that. Most IFAs are not authorised to handle client money so nothing is made payable to the IFA. If you have a concern, then you can always post the application and cheque yourself to the provider involved.

Also, a significant number of IFAs have home offices and you would be ruling out some of the most competent IFAs I know and be left with the salesforce IFAs or old model basis IFAs.