When it comes to choosing an investment firm to manage your portfolio, Edward Jones and Raymond James are two big names that often come up. But how exactly do these two industry giants compare when it comes to things like fees, services offered, and investment philosophy?
In this comprehensive guide, we’ll break down the pros, cons, and key differences between Edward Jones and Raymond James to help you determine which may be a better fit for your investment needs and goals.
A Brief Comparison Table
| Category | Edward Jones | Raymond James |
| Account Minimums | $5,000 for brokerage account | $10,000+ for managed accounts |
| Fee Structure | Transaction-based commissions | Asset-based fee, % of AUM |
| Investment Philosophy | Passive, long-term buy-and-hold | Active trading, market timing |
| Services Offered | Full range – retirement, insurance, banking | Primarily investments and trading |
| Accessibility | Local branch offices, close advisor relationships | Mix of local and centralized access |
| Research Capabilities | Moderate, focused on long-term | Extensive proprietary research |
| Clientele | Individual investors, small accounts | Institutions, high-net-worth investors |
Overview Of Edward Jones
Founded in 1922, Edward Jones is one of the largest investment firms in the U.S. with over 19,000 financial advisors across all 50 states.
Here’s a quick rundown of their key features:
- Investment philosophy: Edward Jones emphasizes long-term, buy-and-hold investing strategies focused on mutual funds. Their advisors provide recommendations but clients make the final investing decisions.
- Account minimums: Edward Jones typically requires a $5,000 minimum to open a brokerage account. IRA accounts can be opened for as little as $1,000.
- Fees: Edward Jones uses a transaction-based fee structure, charging commissions for trades rather than an asset-based fee based on assets under management.
- Services: In addition to investment management and retirement accounts, Edward Jones offers things like college savings accounts, insurance products, banking services, and more.
- Access: Local Edward Jones advisors work out of smaller branch offices rather than large centralized corporate headquarters. This gives clients easier direct access to their personal advisor.
Overview Of Raymond James
Raymond James is also one of the largest investment firms in the U.S., founded in 1962 and providing services to over 8 million client accounts.
Here are some of their notable attributes:
- Investment philosophy: Raymond James focuses on discovering high-quality investments for clients based on extensive research and analysis. Portfolios are customized to client goals.
- Account minimums: Minimums vary but start at $10,000 for a managed account. Standard brokerage accounts can be opened with no minimum.
- Fees: Raymond James uses an asset-based fee structure, charging a percentage of assets under management. Fees range from 1-2% based on account size and services.
- Services: In addition to portfolio management, Raymond James offers banking and lending services, financial planning, and life insurance. Their research and market analysis is also highly regarded.
- Access: Raymond James has both centralized corporate offices and over 8,500 financial advisors located in local branches nationally.
Now that we’ve overviewed the basics of each firm, let’s do a deeper dive into how they compare across some key factors:
Also Read: Is Fisher Investments Better Than Fidelity?
Comparing Fees And Account Minimums
One of the biggest differences between these two firms is their fee structure.
Edward Jones uses a transaction-based commission fee structure. This means you pay commission fees whenever you buy or sell an investment. Their commission fees tend to be around $30-$50 per trade.
The benefit here is you only pay when you trade. The downside is frequent trading results in higher total costs over time compared to an asset-based fee.
Raymond James uses an asset-based fee structure, charging a percentage fee based on the total assets in your account. Their fee schedule ranges from 1-2% annually based on account size and services required.
The asset-based fee structure allows for predictable annual fees rather than variable commissions. But the percentage-based fee means larger accounts and portfolios will pay more overall in management fees.
Account minimums are another area where these firms differ significantly.
Edward Jones has a minimum investment of $5,000 for a standard brokerage account, making them better suited for smaller individual investors just starting out.
Raymond James has higher account minimums, often $10,000 or more for managed accounts. This caters more towards larger institutional investors and those with more capital to invest upfront.
Investment Philosophy And Strategies
When it comes to investing approach, Edward Jones and Raymond James have some philosophical differences as well.
Edward Jones promotes long-term buy-and-hold strategies focused on mutual funds. They emphasize building diversified portfolios tailored to an investor’s risk tolerance and goals. Their advisors provide recommendations but customers make the final investing decisions.
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Raymond James serves more trading-oriented investors. Their advisors actively seek out opportunities through detailed research and analysis. They customize portfolios specific to each client while also promoting more frequent trading when beneficial.
Edward Jones follows a more passive investment management philosophy centered around mutual funds. Raymond James uses a more active management approach based on discretionary trading and market timing by managers.
Neither approach is necessarily “better” – it comes down to your preferences as an investor. Passive long-term strategies require less oversight but can miss short-term gaining opportunities. Active trading can take advantage of market movements but requires more monitoring and thoughtful strategy.
Breadth Of Services Offered
Beyond investments, these two firms also diverge when it comes to overall services provided to clients.
Edward Jones offers a wide array of financial services including retirement accounts like 401(k)s and IRAs, college savings plans, insurance policies, mortgages, banking, and more. This makes them function as a one-stop shop able to consolidate and manage all aspects of your financial life.
Raymond James has a narrower focus geared specifically towards investment management and trading. They do offer services like financial planning and insurance policies. But their core service offerings center around portfolio and investment advisory services.
If you want holistic financial management under one roof, Edward Jones likely provides the fuller suite of services. Raymond James prioritizes investment research and management above all else.
Also Read: Comparison Between LPL Financial And Fidelity.
Accessibility And Customer Service Experience
When it comes to working with a financial advisor, the client experience is hugely impacted by accessibility, communication, and the advisor-client rapport.
Edward Jones touts its strong local community presence, with smaller offices staffed by advisors who often live in or near the communities they serve. This fosters closer relationships and familiarity for clients. Their branch-based model also allows for easier in-person meetings and accessibility to your specific advisor.
Raymond James offers a mix of both local and centralized access. They have over 8,500 locally-based advisors similar to the Edward Jones branch model. But they also maintain larger regional hubs and corporate offices focused more on operations, trading, and research.
So, some clients work predominantly with corporate teams and leadership rather than a single local advisor.
In terms of customer service ratings, Edward Jones tends to score higher marks for things like responsiveness and advisor expertise. But larger firms like Raymond James typically offer greater research resources and tools to support their advisors and clients.
Both offer digital apps and client portals that allow some self-management. But Edward Jones’ localized approach appears to foster slightly stronger individual client relationships overall.
Frequently Asked Questions (FAQ)
Raymond James and Edward Jones have some high-level similarities in that they are both large, full-service investment firms with local advisors. But they differ significantly in their fee structures, account requirements, investment strategies, and areas of focus. Raymond James has higher account minimums and focuses more on active trading and investments research.
Edward Jones’ biggest competitors are: Charles Schwab, Fidelity, Merrill Lynch, Morgan Stanley, Raymond James. But their branch-based structure makes them stand out from other large national firms.
A few key things that distinguish Raymond James:
Specializes in active portfolio management and seeks frequent trading opportunities.
Prioritizes proprietary research and analysis over a passive buy-and-hold approach.
caters to high-net-worth clients with larger minimums and asset-based fee structure.
Wide range of investment offerings including mutual funds, ETFs, equities, fixed income.
Raymond James’ fee structure is higher than average, but typical for full-service wealth management firms. Their asset-based fee model means fees scale up along with account size, typically ranging from 1-2% annually based on assets under management. Their minimum account sizes and investment activity requirements also cater towards larger investors. So overall their fees are justified based on the robust services offered, but not ideal for smaller investors looking to minimize costs.
Also Read: Comparison Between AIG And New York Life.
The Bottom Line
When weighing Edward Jones Vs. Raymond James, there’s no definitively “better” option. It depends entirely on your needs and priorities as an investor.
Edward Jones caters more towards long-term, passive investors focused on mutual funds. Raymond James appeals to active traders who buy individual stocks and want hands-on portfolio management.
Key advantages of Edward Jones include low minimum investment, transaction-based fee structure, and strong local branch presence.
Raymond James offers more robust research capabilities, discretionary portfolio management, and focuses on high-net-worth investors.
Think critically about your investment philosophy, account size, and desired services. Understanding these key differences allows you to determine which firm may be the better home for your financial goals.
