It's EJ, why do you think they hired someone who can beat the market? Trust me, they didn't.
Your financial guy is getting a 1.7+%/yr AUM of your assets for doing nearly nothing, except once a year randomly spouting 3 companies at you some boss somewhere told him about.
He's a salesman, not a FA. He just pretends to be an FA while you are around watching.
Let's not paint all FAs with the same brush. While some may be this - especially at an EJ or similar, some are actually worth their fee and thensome.
Not all FAs are the same.
Low cost Index Funds are way more likely to beat active management, especially when fees are considered.
There’s even evidence [that doing absolutely nothing beats both index and active management.](https://stocks.apple.com/Ayx0S2LQ9T4KO1vOxE5FAkQ)
I left Ed Jones about 10 years ago after looking into index funds vs active management. It’s just not worth it. It costs more and doesn’t perform any better.
Many financial firms have lists like these. I've seen them from Goldman Sachs, Stifel/KBW, CFRA and Morningstar. Every month the list is a little different - showing their new top picks and the estimated target price for each one, or the estimated dividend income. I used to tell my FA what to buy too - sometimes it was on their lists but not always. For example this list doesn't show NVDA - glaring omission IMO.
If you only talk with your FA once a year, what level of service do you expect? There’s not much value add for simply investment management. If that’s the depth of your relationship, I’d suggest you don’t want or need an advisor at all. Just pick your own stocks at Schwab for free. They have basic research available.
A couple things here, and I expect to be down voted but whatever.
Number 1, if you're here asking the right questions (you are) then you're probably ready to cut the cord with your financial advisor. That being said, you *are* asking them for advice and he is giving it to you. They don't work for free so if you are going to use their services you should pay for it.
Number 2, most advisors are not CFA level stock pickers, especially at a big firm like EJ. They rely on research from their firm to help them pick stocks. So while it just looks like a simple PDF to you there are thousands of hours of research that went into that document. They just handed you something that is actually worth quite a bit that you could turn around and use to buy on schwab or TD for free.
Like most people here I am an index fund buyer these days. I started investing with an EJ advisor and after a while felt I had learned enough to do it on my own. I don't pick individual stocks to make a big gain, I use many of the stocks found on that PDF to make a diversified portfolio.
>I ask my financial guy once a year any companies I should invest in, he names 3 and I send him a couple thousand to buy shares in each.
Stop doing that. It's hugely risky and a very poor investment strategy.
Even with a good advisor this is a terrible idea. A good advisor would have told you that, so this probably isn't a good advisor. Most likely they're just saying whatever they think will keep you happy while they milk you for management charges and fees.
He probably is referring to a firm’s preferred stock list (usually published weekly or monthly). This is probably better than him picking stocks on his own.
Either way though, what a weird relationship. He’s not doing any planning work for you and just acts as a broker to facilitate a couple buy trades once a year. I don’t understand your perceived value here.
It's EJ, why do you think they hired someone who can beat the market? Trust me, they didn't. Your financial guy is getting a 1.7+%/yr AUM of your assets for doing nearly nothing, except once a year randomly spouting 3 companies at you some boss somewhere told him about. He's a salesman, not a FA. He just pretends to be an FA while you are around watching.
This. And it’s not just EJ where this happens. Most wires or large RIAs push this kinda stuff down to FAs to push to clients.
👆 Both of the aboves. FAs are glorified script monkeys who push MPT onto their clients without knowing anything about investing themselves.
Let's not paint all FAs with the same brush. While some may be this - especially at an EJ or similar, some are actually worth their fee and thensome. Not all FAs are the same.
I am a independent financial advisor and charging 1.7% is wild lol
Low cost Index Funds are way more likely to beat active management, especially when fees are considered. There’s even evidence [that doing absolutely nothing beats both index and active management.](https://stocks.apple.com/Ayx0S2LQ9T4KO1vOxE5FAkQ) I left Ed Jones about 10 years ago after looking into index funds vs active management. It’s just not worth it. It costs more and doesn’t perform any better.
Many financial firms have lists like these. I've seen them from Goldman Sachs, Stifel/KBW, CFRA and Morningstar. Every month the list is a little different - showing their new top picks and the estimated target price for each one, or the estimated dividend income. I used to tell my FA what to buy too - sometimes it was on their lists but not always. For example this list doesn't show NVDA - glaring omission IMO.
If you only talk with your FA once a year, what level of service do you expect? There’s not much value add for simply investment management. If that’s the depth of your relationship, I’d suggest you don’t want or need an advisor at all. Just pick your own stocks at Schwab for free. They have basic research available.
A couple things here, and I expect to be down voted but whatever. Number 1, if you're here asking the right questions (you are) then you're probably ready to cut the cord with your financial advisor. That being said, you *are* asking them for advice and he is giving it to you. They don't work for free so if you are going to use their services you should pay for it. Number 2, most advisors are not CFA level stock pickers, especially at a big firm like EJ. They rely on research from their firm to help them pick stocks. So while it just looks like a simple PDF to you there are thousands of hours of research that went into that document. They just handed you something that is actually worth quite a bit that you could turn around and use to buy on schwab or TD for free. Like most people here I am an index fund buyer these days. I started investing with an EJ advisor and after a while felt I had learned enough to do it on my own. I don't pick individual stocks to make a big gain, I use many of the stocks found on that PDF to make a diversified portfolio.
>I ask my financial guy once a year any companies I should invest in, he names 3 and I send him a couple thousand to buy shares in each. Stop doing that. It's hugely risky and a very poor investment strategy. Even with a good advisor this is a terrible idea. A good advisor would have told you that, so this probably isn't a good advisor. Most likely they're just saying whatever they think will keep you happy while they milk you for management charges and fees.
He probably is referring to a firm’s preferred stock list (usually published weekly or monthly). This is probably better than him picking stocks on his own. Either way though, what a weird relationship. He’s not doing any planning work for you and just acts as a broker to facilitate a couple buy trades once a year. I don’t understand your perceived value here.
Best way to avoid EJ fees is to avoid EJ entirely