Edward Jones vs. Vanguard 2024 Comparison
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Summary:
We can best compare Edward Jones and Vanguard by assessing their investing products, minimum investments, fees and commissions, transfers, financial advising, and ownership models. Both are highly rated financial services platforms. Edward Jones offers a wide variety of products but has higher fees and minimum investment amounts. Vanguard is client-owned, making it one of the least expensive investing platforms. Here is what you need to know to choose the best option for you.
Choosing an investing platform is not a decision to take lightly. Edward Jones and Vanguard are two of many options for investing, financial advising, retirement planning, and more. Some people feel strongly toward one or the other. However, your decision between the two should be independent of another person’s emotions. You’ll have to assess each of their offerings and decide which one suits you best. Keep reading to get objective facts about Edward Jones and Vanguard.
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Understanding investing services platforms
Gone are the days of analog investing. Now, you can get access to trusted brokerages digitally. There are several financial service platforms on the market today — some older than the digital age itself and some emerging from it. Edward Jones and The Vanguard Group both fall in the former category. Edward Jones is 100 years old, and Vanguard is 47 years old. History is essential, but we want to know what it’s like to use these companies’ services today.
Commonalities
When it comes to investing, many people prefer to stick with the reputation of long-standing platforms. Regardless, knowing what to expect from online stock brokers is a good idea.
Most stock brokers offer the following services:
- Insurance coverage of your funds if the platform fails
- Buying and selling investment assets
- Secure and protected account management
- Retirement account options
- Financial advising
- Educational resources
Variations
Many top online stock brokers have, more or less, the options just listed above. But multiple factors can vary greatly between brokers. It’s your job to do your research and find the best one for your financial goals and experience level. By reading this article, you’ve begun doing this critical work.
Here are a few factors that can differ from platform to platform:
- Types of brokerage accounts available
- Types of orders available
- Types of securities available
- Trading hours
- Charting features
- User interface
- Types and extent of educational offerings
SuperMoney is here to help you make intelligent and informed financial decisions. Check out our brokerage comparison tools for up-to-date insight on the best stock brokerages.
Now, let’s dive into two of the most popular investing platforms.
Edward Jones vs. Vanguard
Edward Jones and Vanguard have both earned reputations as trustworthy and effective brokerages. They’re investment services in some ways. However, beneath the surface, the two have fundamental differences.
We can compare these companies based on six categories: investing, minimums, fees and commissions, transfers, advising, education, and ownership. Let’s see how the two size up in these categories.
Investing
Both platforms’ purpose is to help you make money by investing. Comparing how Edward Jones and Vanguard fulfill that purpose should come first. The following is a comparison of these firms’ respective investment products and account offerings.
Edward Jones
Edward Jones offers diverse investment opportunities to its members. Its investment philosophy focuses on diversification, long-term strategy, and financial advising.
You can find the following investment products at Edward Jones:
- Stock selection
- Bonds, CDs, and other fixed-income investments
- Mutual funds
- Exchange-traded funds (ETFs)
- Unit investment trusts
- Donor advised funds
- Money market funds
With Edward Jones, individuals and businesses can invest in more than just a classic brokerage account. The following are its account options.
- Retirement accounts: 401(k) rollover options, Roth IRAs, Traditional IRAs, 403(b) plans, 457 plans
- Brokerage Account Options (including custodial accounts)
- 529 Plans
- Cash and credit: personal line of credit, credit cards, check writing, savings accounts, debit cards
- Life insurance options
- Disability and care insurance
- Annuities
- Employee benefit plans
Vanguard
Similar to Edward Jones, you can invest in various avenues at Vanguard. It focuses on catering to all levels of investors through its educational resources, personalized financial advising services, wealth management services, and low-cost approach.
Here are the investment products available at Vanguard:
- ETFs
- Mutual funds
- Stocks
- CDs
- Bonds
- Money market funds
- Cash investments
Vanguard caters to many types of investors from all walks of life, from minors to retirees. Find the following investing account offerings at Vanguard:
- Brokerage accounts
- Trust and organization accounts
- IRAs (Roth and Traditional)
- 529 plans
- UGMA/UTMA
- Small business retirement
- 403(b) services
- 401(k) rollovers
Minimums
Now, let’s talk numbers. If you’re considering investing with either of these platforms, you need to know their investment minimums. Not all investment products require a minimum investment. However, Edward Jones and Vanguard do set some minimums for taking advantage of financial advising services.
Edward Jones
There are no minimums for transactional brokerage accounts. However, if you want to take advantage of Edward Jones’s hands-on “Guided Solutions” or “Advisory Solutions,” expect the following minimum investment requirements:
- Guided Solutions Fund account: $5,000
- Guided Solutions Flex account: $25,000
- Advisory Solutions Fund Models: $25,000
- Advisory Solutions Unified Management Account (UMA) Models: $300,000 for select portfolio objectives
- Select Account Annuities: May require at least $10,000
Vanguard
Vanguard has several fund offerings for members to get the lowest minimum investment requirements possible. For ETFs, there are no minimum account balances or minimum initial investment requirements. You just need to have enough in your account to pay for at least one whole share.
- Vanguard STAR® Funds: $1,000
- Vanguard Target Retirement Funds: $1,000
- Most actively managed Vanguard Funds: $3,000
- Most Admiral Shares index funds: $3,000
- Most actively managed Admiral shares funds: $50,000
- Certain sector-specific Admiral Shares index funds: $50,000
Pro tip
Reinvesting dividend earnings is a great way to compound your returns. Be aware that you can only buy ETFs in full shares, not fractions, with Vanguard. However, both Vanguard and Edward Jones allow fractional dividend reinvesting.
Fees and commissions
Fees and commissions are a natural part of most investing platforms. They vary by brokerage, account, and service. Because of their complexity and variability, understanding fees and commissions can be complicated. Consult a financial advisor or customer service representative at your desired brokerage for detailed information.
Edward Jones
All transactional brokerage accounts are subject to commissions when you buy and sell particular investments. At Edward Jones, commission fees are a flat rate of 2% for most securities, excluding mutual funds, plus processing charges.
Advising fees are as follows. The Guided Solutions program comes with a 1.35% maximum Program Fee. The Advisory Solutions programs include the 1.35% maximum Program Fee and an additional 0.09% to 0.19% Portfolio Strategy Fee. Finally, the UMA Models account also comes with an SMA Manager Fee.
Remember that these fees do not include additional internal investment expenses you might also have to pay. See Edward Jones’s most recent Schedule of Fees for additional costs you can expect when using their services.
Vanguard
Vanguard has famously low fees for both financial advising and account services. But their pricing structure is more complex than Edward Jones’s.
Most investment accounts come with a $20 to $25 yearly fee. Vanguard transparently outlines how one could avoid such fees. Visit the annual fee schedule web page to learn more. Vanguard offers zero commission fees for trading stocks and ETFs online to benefit its clients. Take a closer look at the brokerage fee schedule web page to learn more.
Regarding Vanguard Personal Advisor Services®, one can expect to pay an annual fee of 0.30% of assets under management. For those utilizing the Vanguard Digital Advisor™ service, that yearly fee becomes 0.15% of assets under management.
Transfers
It’s common to transfer assets from one broker to another. Changing is valid and warranted if you aren’t satisfied with your current service provider. Moving accounts will require cooperation with both the original and new brokerage. You should understand the process and implications of doing so. Visit your brokerage’s website for more information.
Edward Jones
Edward Jones recommends contacting one of its financial advisors. The advisor can help you choose the best way to transfer your brokerage account or retirement account into Edward Jones. As for moving out of Edward Jones, a total transfer requires a $95 fee, unless the fee is waived for some reason.
Vanguard
Unlike Edward Jones, Vanguard offers detailed instructions for transferring to and from the firm. The good news is that Vanguard neither charges inbound nor outbound transfer fees. That doesn’t mean the other brokerage won’t impose fees.
If you want to transfer money into Vanguard, you must identify which accounts you’d like to move, gather the necessary information, and initiate the transfer. Digital transfers to Vanguard usually take five to seven business days. Be aware that only some assets and accounts are eligible for in-kind transfers.
Advising
Both Edward Jones and Vanguard pride themselves on their financial advising services. You’ve already seen that Vanguard’s fees for such services are overall lower than those of Edward Jones. But how do the services compare?
Edward Jones
Edward Jones offers several tiers of financial advising so that its clients can find specific packages to meet their needs. The goal is to create a personal relationship with members and help them plan for retirement, prepare for the unexpected, avoid unnecessary taxes, provide emotional guardrails, customize a data-driven strategy for the long term, and promote financial and physical wellness.
Vanguard
Vanguard offers two primary financial advising services: Vanguard Digital Advisor™ and Vanguard Personal Advisor Services®. Both aim to make investing simple and affordable. The benefits of the former include ongoing support, low-cost investing, and custom goals. The service is unique because you receive these benefits from a digital “robo-advisor.”
The latter is a more traditional type of financial advising through which you partner with a human advisor. You get personal financial planning advice customized to fit your goals at the level that suits your needs.
Ownership
While the two companies may seem similar, they operate very differently. The business structure of each of these firms has more of an influence than you may believe. This influence compounds over time, resulting in a significant difference in potential earnings.
Spoiler alert: Vanguard has the potential to produce higher returns due to its low expense ratio.
Edward Jones
Edward Jones is privately owned. Private shareholders own the company and profit from your investment fees and commissions. Therefore, the more fees you pay, the more money that ends up in the pockets of Edward Jones’s shareholders, not its clients. The firm’s expense ratio stays close to the industry average of 1%.
Vanguard
On the contrary, Vanguard is 100% client-owned and operated at cost. The cost needed to manage its securities (expense ratio) is lower than that of many other firms. Vanguard’s average expense ratio is just 0.18%. Profits cycle back into mutual funds, directly benefiting the company’s clients. Since there are no shareholder interests to account for, fees and commissions tend to be lower with Vanguard, and returns for members tend to be higher over time.
Other competitors
As you may know, Edward Jones and Vanguard are just two of several investment industry giants. Don’t hesitate to shop around for the best fit for you.
The following are some other investing platforms to consider:
Pro tip
You’re not alone in your search for the best brokerage app. Use SuperMoney’s brokerage app comparison tools to analyze the best apps on the market right now.
FAQ
Who is Edward Jones’s biggest competitor?
Many argue that Edward Jones’s biggest competitors are Vanguard, Fidelity Investments, and Charles Schwab.
Is there anything better than Vanguard?
When it comes to cost and business model, there are few better than Vanguard. It’s clear that, with their client-ownership model, their clients come first. While Vanguard doesn’t offer as many financial services as other brokerages, you can expect to pay far fewer fees and commissions for the services they do have. Moreover, they didn’t become one of the best in the business by offering mediocre investing and advising services.
Which one is better, Charles Schwab or Edward Jones?
This topic could fill an entire article of its own. As usual, “better” is subjective. Both Charles Schwab and Edward Jones are hugely popular investing platforms. Schwab is a massive mutual fund company with dozens of other offerings, too. Edward Jones is famous for its investment advice and retirement planning services.
How do I switch from Edward Jones to Vanguard?
You can move your Edward Jones investments to Vanguard Group by requesting a transfer through Vanguard. You will need to provide personal and financial information to initiate the transfer. Vanguard will take care of the rest, including contacting Edward Jones, confirming information, and transferring assets. The process should take 4–6 weeks maximum.
Are Edward Jones fees high?
Edward Jones’s fees fall close to the average for brokerages. They are high compared to Vanguard’s. Edward Jones charges up to 1.35% on advising services, while Vanguard charges up to 0.30%.
How does Edward Jones rank?
When it comes to customer satisfaction, Edward Jones ranks highly. According to the J.D. Power 2022 U.S. Financial Advisor Satisfaction Study, Edward Jones ranks number one with a score of 876.
Key takeaways
- Edward Jones and Vanguard are two popular brokerages. Both offer investment products, retirement plans, and financial advising. Each comes with its unique advantages.
- Edward Jones offers a more diverse variety of services and financial advising. Vanguard boasts expense ratios 75% lower than the industry average, making it one of the most affordable investing and financial advising services.
- If you use financial advising services, expect to encounter some minimum investment requirements, fees, and commissions. Edward Jones and Vanguard both offer a range of services with varying fees to fit many types of investors.
Beyond brokerage comparisons: investigating ETFs
We’ve compared two stock brokerages where you might invest in ETFs. With SuperMoney, you can compare ETFs themselves, too. Compare VUG vs. VOO, SPY vs. VOO, and TQQQ vs. QQQ.
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