Thinking about taking the leap into investing, but feeling a bit overwhelmed by where to start? You're not alone! Many people feel that way, and that's perfectly normal. Edward Jones aims to make investing accessible and personalized, especially for those who appreciate a hands-on approach with a dedicated financial advisor.
This comprehensive guide will walk you through the process of starting your investment journey with Edward Jones, from understanding their philosophy to setting up your first account and beyond. Let's dive in!
How to Start Investing with Edward Jones: A Step-by-Step Guide
Edward Jones emphasizes a personalized approach with local financial advisors who work closely with clients to understand their financial goals and risk tolerance. Their process often involves a series of in-person or virtual meetings to ensure your investment strategy aligns with your life.
Step 1: Engage and Explore Edward Jones
The very first step is to simply explore if Edward Jones aligns with your investing style and needs. Do you prefer a highly personalized, one-on-one relationship with a financial advisor? Do you value having a local presence where you can meet someone face-to-face? If so, Edward Jones might be a good fit.
- Initial Research: Start by visiting the Edward Jones website (edwardjones.com). Look for sections like "Getting Started," "Our Approach to Investing," and "Benefits of Working with a Financial Advisor." This will give you a good overview of their philosophy and services.
- Find a Financial Advisor: Edward Jones prides itself on its widespread network of financial advisors. You can use their "Find an Advisor" tool on their website to locate one near you. Consider reading their profiles to get a sense of their experience and areas of focus.
- Take a Starting Point Quiz: Edward Jones offers tools like a "Starting Point Quiz" or similar assessments to help you think about your financial goals and what kind of support you might need. This can be a great way to prepare for your initial consultation.
Step 2: The Initial Consultation - "What's Important to You?"
This is arguably the most crucial step as it sets the foundation for your entire investment strategy. Edward Jones' core philosophy revolves around understanding "What's important to you?"
- Schedule a Complimentary Consultation: Contact an Edward Jones financial advisor to schedule your first meeting. This initial consultation is typically free and without obligation.
- Discuss Your Financial Goals: This meeting is all about you. Your advisor will ask detailed questions to understand:
- Your current financial situation: Income, expenses, savings, debts, existing investments.
- Your short-term goals: Saving for a down payment, a new car, a vacation.
- Your long-term goals: Retirement planning, funding a child's education, leaving a legacy, starting a business.
- Your risk tolerance: How comfortable are you with market fluctuations? Are you aggressive, moderate, or conservative in your approach to risk? This is often assessed through a questionnaire.
- Be Honest and Open: The more transparent you are with your financial advisor, the better they can tailor a strategy for you. Don't hold back any information about your finances or your aspirations.
- Ask Questions: This is your opportunity to interview your advisor. Ask them about their experience, their investment philosophy, how they are compensated (fees vs. commissions), and what to expect from working with them.
Step 3: Defining Your Goals and Creating a Strategy
After the initial discussion, your financial advisor will help you translate your broad aspirations into specific, measurable financial goals.
- Translate Needs into Goals: Your advisor will help you refine your goals, such as: "I want to retire at age 65 with an annual income of X," or "I want to save Y amount for my child's college education by the time they are 18."
- Develop a Personalized Financial Strategy: Based on your goals, risk tolerance, and time horizon, your advisor will propose a customized financial strategy. This strategy will outline:
- Asset Allocation: How your investments will be diversified across different asset classes (e.g., stocks, bonds, mutual funds, ETFs). Edward Jones emphasizes diversification and long-term investing in quality assets.
- Investment Products: Specific investment vehicles that align with your goals and risk profile. This could include mutual funds, exchange-traded funds (ETFs), individual stocks, bonds, or retirement accounts like IRAs (Traditional or Roth) and employer-sponsored plans (like 401(k) rollovers).
- Contribution Plan: A realistic plan for how much you can consistently invest to reach your goals.
- Time Horizon: The timeframe for each of your goals. Typically, longer time horizons allow for more aggressive investment strategies, while shorter ones suggest more conservative approaches.
Step 4: Selecting Account Types and Opening Your Account
Once your strategy is defined, it's time to choose the right account types and formally open them.
- Understanding Edward Jones Account Options: Edward Jones offers various account types, each with different fee structures and levels of advice.
- Edward Jones Select Account (Brokerage Account): This is a commission-based account where you pay a commission each time you buy or sell certain investments. You choose your investments, and your advisor provides guidance. There's generally no account minimum for this type, though individual investments may have minimum purchase amounts.
- Edward Jones Guided Solutions®: A fee-based advisory program where you pay an annual fee based on the assets under management. You and your financial advisor build and maintain a portfolio within Edward Jones' asset allocation guidance.
- Guided Solutions Fund Account: Minimum investment of $5,000, focused on mutual funds and ETFs.
- Guided Solutions Flex Account: Minimum investment of $25,000, allowing for mutual funds, ETFs, and stocks. With $50,000 or more, bonds and CDs can also be included.
- Edward Jones Advisory Solutions®: A fee-based wrap program where Edward Jones manages your account for you, delegating day-to-day investment decisions to a team of research analysts.
- Advisory Solutions Fund Models: Minimum investment of $25,000, focused on mutual funds and ETFs.
- Advisory Solutions Unified Managed Account (UMA) Models: Also has a $25,000 minimum, and includes separately managed allocations (SMAs) of individual stocks and bonds for potential tax efficiencies.
- Review Fees and Costs: Your advisor will explain the fees associated with your chosen account type. It's crucial to understand how Edward Jones is compensated (commissions, asset-based fees, 12b-1 fees, etc.).
- Complete Account Opening Paperwork: Your financial advisor will guide you through the necessary paperwork to open your account(s). This will typically require personal identification (like your Social Security number), contact information, and bank account details for funding.
- Fund Your Account: You'll transfer funds into your new Edward Jones account. This can be done via electronic transfer, check, or by rolling over existing retirement accounts (e.g., a 401(k) from a previous employer).
Step 5: Implementing Your Investment Plan
Once your account is open and funded, your advisor will implement the investment strategy you've developed together.
- Investment Selection: Your advisor will select the specific investments for your portfolio based on the agreed-upon strategy and asset allocation.
- Diversification: Edward Jones emphasizes diversification to help manage risk. Your portfolio will likely include a mix of different investments across various sectors and asset classes.
- Ongoing Monitoring (Especially for Advisory Solutions): If you've chosen a managed account like Advisory Solutions, Edward Jones' research team will continuously monitor and manage your portfolio. For other accounts, your advisor will provide guidance for adjustments.
Step 6: Regular Reviews and Adjustments
Investing is not a one-time event; it's an ongoing journey. Regular reviews are key to staying on track.
- Scheduled Reviews: Your financial advisor will typically schedule regular meetings (annually, semi-annually, or as needed) to review your progress.
- Assess Progress Towards Goals: During these reviews, you'll discuss whether you're on track to meet your financial goals.
- Life Changes: It's crucial to communicate any significant life changes to your advisor. This could include a new job, marriage, having children, buying a home, or a change in your risk tolerance. These events may necessitate adjustments to your investment strategy.
- Market Fluctuations: Your advisor will discuss how market performance is impacting your portfolio and make adjustments if necessary to keep your portfolio aligned with your long-term objectives.
- Rebalancing: For fee-based accounts, your advisor will help rebalance your portfolio to maintain your desired asset allocation, ensuring you're not overexposed to certain risks.
Remember: Investing involves risk, and the value of your investments can fluctuate. Edward Jones' approach is designed to provide guidance and support to help you navigate these fluctuations and stay focused on your long-term goals.
Related FAQ Questions (How to...)
Here are 10 frequently asked questions about investing with Edward Jones, with quick answers:
How to choose the right Edward Jones financial advisor for me?
Look for an advisor whose communication style you appreciate, who asks detailed questions about your goals, and whose investment philosophy aligns with yours. You can use their "Find an Advisor" tool and read profiles.
How to understand Edward Jones fees and costs?
Edward Jones has both commission-based and fee-based accounts. Commission-based accounts charge per transaction, while fee-based accounts charge an annual percentage of assets under management. Always ask for a clear breakdown of all fees and expenses before opening an account.
How to transfer an existing investment account to Edward Jones?
Your Edward Jones financial advisor can assist you with the process of transferring existing investment accounts (like IRAs or 401(k)s) from other institutions. They will guide you through the necessary paperwork.
How to set up recurring investments with Edward Jones?
Yes, you can typically set up automatic, recurring contributions to your Edward Jones investment accounts. Discuss this with your financial advisor, who can help you set up regular transfers from your bank account.
How to access my Edward Jones account information online?
Edward Jones offers online access and a mobile app. Your advisor can help you sign up for online access using your account number, date of birth, and the last four digits of your Social Security number.
How to know if Edward Jones is a good fit for my investment goals?
Edward Jones is generally a good fit for investors who prefer a personalized, hands-on approach with a dedicated financial advisor and value in-person consultations. If you're comfortable paying for personalized advice and ongoing support, it might be suitable.
How to prepare for my first meeting with an Edward Jones financial advisor?
Gather documents related to your income, expenses, debts, existing savings, and any current investments. Think about your short-term and long-term financial goals, and what your comfort level with risk is.
How to diversify my investments with Edward Jones?
Your Edward Jones financial advisor will help you diversify your portfolio across various asset classes (e.g., stocks, bonds, mutual funds, ETFs) based on your risk tolerance and financial goals. They emphasize a balanced, long-term approach.
How to withdraw money from my Edward Jones account?
You can typically request withdrawals from your Edward Jones account through your financial advisor. The process and any potential tax implications will depend on the type of account and the nature of the withdrawal.
How to contact Edward Jones customer service?
You can contact Edward Jones customer service through their website, phone number, or by reaching out directly to your financial advisor's office.
