Comparing Edward Jones Fee Structure and Fisher Investments Fee Structure

When it comes to choosing a financial advisor, understanding the fee structure is crucial. Fees can significantly impact your investment returns over time. In this blog, we will compare the fee structures of two popular investment firms: Edward Jones and Fisher Investments. We’ll break down how each company charges its clients and what you can expect if you choose to work with them.

Overview of Edward Jones

Edward Jones is a well-known financial services firm. They have been in the industry for decades and offer personalized financial advice to individuals. Their approach is client-focused, and they emphasize long-term relationships. Edward Jones has thousands of branches across the United States, making it easily accessible.

Overview of Fisher Investments

Fisher Investments is another major player in the financial advisory space. Founded by Ken Fisher in 1979, the firm manages billions of dollars in assets for its clients. Unlike Edward Jones, Fisher Investments takes a more active approach to portfolio management. They aim to outperform the market by making strategic investment decisions.

Edward Jones Fee Structure

Edward Jones charges fees in a few different ways. The most common are commission-based fees and fee-based account options.

Commission-Based Fees

In a commission-based account, you pay a fee each time you buy or sell an investment. These fees can vary depending on the type of investment. For example, stocks and bonds usually have different commission rates. Mutual funds might have a front-end load, which is a fee you pay when you purchase the fund. This fee can range from 2% to 5% of the investment amount.

One of the benefits of a commission-based account is that you only pay when you make a transaction. However, this can also be a drawback if you trade frequently, as the fees can add up quickly.

Fee-Based Account Options

Edward Jones also offers fee-based account options. In these accounts, you pay a percentage of your assets under management (AUM) as an annual fee. This fee typically ranges from 1.35% to 1.50% per year. The fee covers investment advice, account management, and other services.

The fee-based account might be better for those who prefer ongoing advice and less frequent trading. It offers more predictability in terms of costs since you know what you’ll pay annually.

Fisher Investments Fee Structure

Fisher Investments operates primarily on a fee-only basis. This means they do not earn commissions from buying or selling investments. Instead, they charge a management fee based on the assets they manage for you.

Asset Management Fee

Fisher Investments’ fee structure is relatively straightforward. They charge a fee that ranges between 1% and 1.5% of your assets under management (AUM) annually. The fee percentage decreases as your portfolio size increases. For example, if you have a larger portfolio, you might pay closer to 1%, while a smaller portfolio might be charged closer to 1.5%.

Fisher Investments does not have additional fees for trading or hidden costs. Their fee covers all aspects of portfolio management, including research, strategy, and execution. This structure aligns their interests with those of their clients since they earn more as your portfolio grows.

Comparing the Two Fee Structures

When comparing the fee structures of Edward Jones and Fisher Investments, there are a few key points to consider.

Transparency

Fisher Investments offers a more transparent fee structure. You pay a single management fee based on your assets under management. There are no additional fees for transactions, which means you won’t be surprised by unexpected costs.

Edward Jones, on the other hand, has a more complex fee structure. If you choose a commission-based account, the fees can vary depending on the types of investments you hold and the frequency of transactions. Their fee-based accounts are more straightforward but still include additional costs for certain services.

Costs Over Time

Over time, the costs of working with Edward Jones can add up, especially in a commission-based account. Frequent trading can result in high fees, which can eat into your investment returns.

Fisher Investments’ fee structure, with a single annual fee, might be more cost-effective for long-term investors. Since their fee decreases as your portfolio grows, you could pay less in percentage terms over time.

Service and Support

Both Edward Jones and Fisher Investments offer personalized service, but they do so in different ways.

Edward Jones provides a local financial advisor who works with you to develop a financial plan. This advisor is your main point of contact and will manage your portfolio based on your goals and risk tolerance. The personal relationship can be beneficial, especially if you prefer face-to-face meetings.

Fisher Investments takes a more team-based approach. You’ll have access to a group of advisors who specialize in different areas, such as retirement planning or estate management. While you won’t have a single point of contact, the team-based approach ensures that you receive specialized advice in different areas of your financial life.

Which Fee Structure is Right for You?

Choosing between Edward Jones and Fisher Investments depends on your financial goals, investment style, and how you prefer to work with an advisor.

Edward Jones Might Be Right If:

• You value a personal relationship with a local advisor.
• You prefer to pay commissions only when you trade.
• You are comfortable with a more traditional approach to investing.

Fisher Investments Might Be Right If:

• You prefer a straightforward, all-inclusive fee structure.
• You want a more active approach to managing your portfolio.
• You are looking for specialized advice from a team of experts.

Conclusion

Both Edward Jones and Fisher Investments have their strengths and cater to different types of investors. Edward Jones might be more suitable for those who value personal relationships and are comfortable with a mix of commission and fee-based accounts. Fisher Investments, with its transparent and straightforward fee structure, could be a better fit for investors who prefer an active management style and want to avoid transaction-based fees.

Before making a decision, consider your financial goals, investment preferences, and how much you’re willing to pay in fees. Understanding these factors will help you choose the right advisor and fee structure for your needs.