Ameriprise Financial Vs. Edward Jones: Best Financial Advisor

Choosing a financial advisor is an important decision that requires careful consideration. Two of the largest and most well-known advisory firms are Ameriprise Financial and Edward Jones.

Both offer a range of financial products and services, but have key differences that may make one a better fit depending on your needs and preferences.

This comprehensive guide examines Ameriprise Financial and Edward Jones in detail, including the pros and cons of each, to help you make an informed choice.

A Brief Comparison Table

FeatureAmeriprise FinancialEdward Jones
Account TypesOffers a wide array of account types including IRA, joint, trust, 529s, custodial, etc.Mainly focuses on individual taxable accounts and IRAs
Investment ProductsStocks, bonds, mutual funds, ETFs, options, structured products, lending solutionsStocks, bonds, mutual funds, CDs, annuities
FeesFlexible – fee-based or commission-basedCommission-based only
Advisor Network~10,000 advisors nationwide~18,000 advisors nationwide
LocationsNational network of officesNeighborhood, locally-based offices
ResearchProprietary research from large internal teamProprietary research available only to advisors/clients
Financial PlanningComprehensive financial planning services availablePrimarily investments-focused
Mobile Apps and ToolsMixed reviews, lacking full functionalityRated poorly compared to competitors
MinimumsVaries by account typeNo minimums to open an account
Customer ServiceAdvisors highly rated, support teams averageVery personalized service thanks to local offices

Overview Of Ameriprise Financial

Ameriprise Financial is a large financial services company that was formed in 2005 after spinning off from American Express. It has over 10,000 financial advisors and offers services including investments, insurance, financial planning, banking, and more.

Some key things to know about Ameriprise:

  • Fee-based and commissioned accounts – Ameriprise offers both fee-based accounts where you pay an annual fee on assets under management, and commissioned accounts where advisors earn commissions on products sold. This flexibility allows you to choose the payment structure that makes most sense for you.
  • Broad investment options – Ameriprise Financial provides access to stocks, bonds, mutual funds, ETFs, options, and more. Advisors can help you craft a diversified portfolio aligned with your goals.
  • Proprietary products – In addition to third-party products, Ameriprise advisors have access to the company’s own proprietary funds and insurance products. Some are solid options, but the focus on proprietary products has led to accusations of mis selling.
  • Large advisor network – With its large network of over 10,000 advisors, Ameriprise has broad reach throughout the U.S. This makes it likely you can find one near where you live and work.
  • Resources and tools – Ameriprise provides advisors and clients with robust resources such as retirement planning calculators, portfolio analysis tools, financial literature, and more. But online client portals get mixed reviews.
  • Relatively high fees – Ameriprise’s fees tend to be higher than competitors for similar investment products and accounts. However, they offer a broad range of services.

Overview Of Edward Jones

Edward Jones is also one of the largest broker-dealers in the U.S. with over 18,000 advisors serving clients across North America. They offer many traditional financial solutions including investments, IRAs, insurance, mortgages, and more.

Key features of Edward Jones include:

Edward Jones
  • Commission-based model – Edward Jones advisors only earn commissions and do not offer fee-based accounts. This can incentivize advisors to sell more products.
  • Neighborhood locations – Edward Jones emphasizes meeting clients face-to-face in smaller, neighborhood-based offices. This facilitates close advisor relationships but limits geographic reach.
  • Simple investment products – Advisors focus on basic investments like stocks, bonds, mutual funds, CDs, and annuities. Edward Jones offers few advanced product options compared to other firms.
  • Proprietary research – Edward Jones has a large proprietary research department generating investment analysis and reports available only to its advisors and clients.
  • Lower trading costs – Trading fees are lower compared to many competitors thanks to the large volume of assets Edward Jones manages. This can benefit active traders.
  • Limited mobile apps and tools – Edward Jones lags in terms of mobile app capabilities to access accounts and perform trading. It also has fewer financial planning tools than competitors.
  • No minimums – Edward Jones does not impose minimum investment amounts or account balances, making them accessible for new investors.

Now that we’ve compared the key features and services, let’s analyze the pros and cons of Ameriprise Vs. Edward Jones in more detail.

Ameriprise Financial Pros

  • Wide range of account types – Ameriprise offers extensive options including individual and joint accounts, trusts, 529 college savings plans, custodial accounts, and taxable/tax-deferred accounts.
  • Industry leading research – Ameriprise has a large dedicated research organization providing advisors with proprietary analysis on stocks, funds, and financial strategies.
  • Flexible fee structure – The ability to choose fee-based or commission-based accounts allows you to opt for the payment method that best suits your investing preferences and activity level.
  • Broad service capabilities – In addition to investment management, Ameriprise can provide services like financial planning, retirement planning, estate planning, banking, lending, and insurance.
  • Large advisor network – With over 10,000 advisors throughout the U.S., you have ample choice in selecting an advisor that meets your needs locally.

Also Read: Comparison Between Fisher Investments And Ameriprise.

Ameriprise Financial Cons

  • High account fees – Account-related fees like custodial fees, account service fees, and paper statement fees are higher than many competitors.
  • Limited shared resources – Solo practitioner advisors do not have access to centralized services for administrative support, compliance, technology, and marketing.
  • Mixed customer service reviews – While advisor service earns strong reviews, direct support and service teams are rated as just average by many customers.
  • Website and apps need improvement – The websites and mobile apps for clients score low in terms of ease of use and functions compared to other top firms.
  • High-pressure sales concerns – There have been instances of clients reporting high-pressure sales tactics to purchase proprietary products. Mandatory arbitration clauses also raise concerns.

Edward Jones Pros

  • Local, personal service – Edward Jones emphasizes face-to-face service and convenience of local branches. Advisors get to know their clients well.
  • Commission structure aligns incentives – Because Edward Jones advisors earn commissions not fees, they are incentivized to maximize account growth and trade volume.
  • Excellent proprietary research – Edward Jones investment research is top-tier and not publicly disseminated, giving its advisors and clients an advantage.
  • Low-cost trading – The large scale of Edward Jones translates to lower trading costs for clients compared to other broker-dealers.
  • No minimums – Edward Jones accommodates clients of all sizes and levels of investing sophistication, not imposing minimum account sizes.

Edward Jones Cons

  • Limited products and services – Edward Jones offers mainly investments and annuities. More advanced product options like derivatives and structured products are not available.
  • Website and tools lacking – The Edward Jones website and mobile apps are rated as inferior to competitors, with limited capabilities and information.
  • High fees for buy-and-hold investors – Edward Jones’ commission-based model results in relatively high fees for buy-and-hold investors with low trading volume.
  • Incentive to churn investments – While aligned incentives can benefit active traders, it may also motivate unnecessary trading for commission revenue (churning).
  • Large advisor territories – Edward Jones teams often manage very large geographic areas, so may not be able to provide truly personalized service.

Also Read: Comparison Between LPL Financial And Edward Jones.

Frequently Asked Questions (FAQ)

Who is Edward Jones’ main competitor?

Ameriprise Financial is considered Edward Jones’ closest competitor. Both are large, full-service investment firms with advisor networks spread across the U.S. They take similar commissioned-based approaches. Other top competitors are Raymond James and LPL Financial.

Who is the top ranked Edward Jones advisor that leaps to Ameriprise?

While broker switching is common in the industry, one recent high-profile move was Patrick Becker, an Edward Jones advisor ranked #2 in Missouri who leapt to Ameriprise in 2020 after 20 years with the firm. He cited Ameriprise’s broader range of account types and investment products as reasons for the change.

Why is Edward Jones not a fiduciary?

Unlike a Registered Investment Advisor held to fiduciary duty, Edward Jones is structured as a broker-dealer. This means its advisors are held to the lower “suitability” standard Vs. acting in a client’s best interests. However, they are rolling out a new Client Agreement acknowledging a fiduciary responsibility when providing financial advice.

Why choose an Edward Jones financial advisor?

The top reasons to choose an Edward Jones advisor include highly personalized service thanks to local offices, proven proprietary research strength, and aligned incentives between clients and advisors. They also accommodate all account sizes. It’s best for basic investment needs and infrequent trading activity.

The Verdict

At the end of the day, selecting between Ameriprise Financial and Edward Jones comes down to your specific needs and preferences as an investor.

Ameriprise is better suited for investors who want comprehensive financial planning and service capabilities, value flexibility in account types, and would benefit from Ameriprise’s industry leading proprietary research. The broad selection of accounts, products, and services allows you to consolidate your finances in one place.

Also Read: Comparison Between UBS And Morgan Stanley Wealth Management.

In contrast, Edward Jones wins on very personalized service thanks to its localized office model. It’s a better choice for basic investment needs, buy-and-hold strategies that trade infrequently, and those who value low minimums and costs. Their proprietary research and aligned incentives with commissions can also be advantages.

Beyond the pros and cons of Ameriprise and Edward Jones, you should also carefully vet individual advisors to find one that best matches your investment goals and personality. While both firms require advisors to hold FINRA licenses, there can still be considerable variability in skill and ethics at large firms like these.

An advisor’s communication style, size of their book of business, investing philosophy, and fee structure are all factors to evaluate.

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