Why did Edward Jones make me jump through hoops every time I needed to take money out of my savings but now being at Fidelity they didn't give me any issues?

Submitted by palinsafterbirth t3_10qclml in personalfinance

Title says it all, I was with Edward Jones since 2014 and never really needed to take out of my savings until I bought my house in 2019. I needed 3 fairly large reno's done but had more than enough in savings so I didn't think it would be a big deal, every time I spoke with my advisor he tried to convince me to take out a line of credit or a loan. I should have seen this as read flags earlier than I did though being a first time home owner I was fairly overwhelmed by things the inspector didn't catch.

I received an inheritance though back in 2018 from my grandparents that my accountant said to try in fidelity because of the lower fees. I spoke with a representative as just a "hey what would it look like if I did this" and after having a super helpful conversation with them I made the decision to move both my savings and SEP to Fidelity. Fast forward to last week, I needed to take out about 15k for a home reno (last one for hopefully a long long time ha) and the entire interaction with them was like 10 min.

Long story short, why was EJ such a headache? Was it just my advisor or do they do these types of tactics for all their customers?

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nkyguy1988 t1_j6p8772 wrote

Because EJ cares about their assets under management and when you withdraw, they show less money. Fidelity doesn't care as much and wants to help their customers they way want to be helped first.

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SkelterHelter68 t1_j6p8mmc wrote

Because they make commission on assets under management (AUM). When you remove funds to do other stuff with, their commission goes down. It's really as simple as that.

That's why you see so many threads here asking how to move funds away from EJ to another broker (usually, Fidelity or Vanguard)--no huge annual fees.

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nostratic t1_j6p8syr wrote

EJ makes money on your total assets under management.

so does Fidelity, but apparently they recognize it's your money and you can access it whenever you want. Fidelity has excellent customer service in my experience, while EJ offices could be a crapshoot.

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CQME t1_j6p9rxg wrote

>Long story short, why was EJ such a headache?

Fidelity doesn't have agents who make commissions off sales. Edward Jones, Merrill, etc, all the full service firms do. The experience is noticeable, as you've noted.

My agent at Merrill keeps asking about whether or not I have funds to move into Merrill. Fidelity hasn't contacted me since I opened an account with them. I prefer the latter experience.

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halifire t1_j6pegbr wrote

So I'm going to assume by savings you actually mean your investments. If this money was actually stored in a savings account then what I'm going to say won't apply. To play devil's advocate EJ was providing you some pretty solid advice. There's some pretty significant downsides with selling investments to pay for home improvements. The biggest one is your forcing yourself to realize gains on your investments. Depending on your situation this could result in a significantly larger tax bill. By recommending a line of credit your advisor was providing you a cheaper alternative to pay for the repairs. Back in 2019 rates were pretty low so you could have borrowed this money pretty cheaply. If you use your home as collateral then then you'd probably be paying around 3.5%. since you used the funds for home improvement you are then allowed to deduct the interest you will pay from your taxes.

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Coronator t1_j6pfk40 wrote

I buy indexes, and never plan on selling a single share (in my taxable accounts anyways). I live by the “buy, borrow, die” philosophy where you just leverage your assets when you need to.

With that said, I don’t know Edward Jones loan rates, but I’m sure they suck. I use Interactive Brokers for anytime I need a securities loan.

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