Edward Jones has agreed to pay $17 million to settle a multistate investigation into how it handled the transfer of assets from brokerage to advisory accounts. For investors who trusted the firm to manage their money responsibly, this settlement may raise serious concerns about whether they were charged excessive fees or placed into unsuitable account structures. In this blog, we’ll break down the key issues involved in the investigation, what this means for Edward Jones customers, and what you should know if you think you may have been impacted.
If you or someone you know has suffered significant investment losses working with Edward Jones or another brokerage firm, don’t hesitate to reach out to Meyer Wilson today. Our attorneys are experienced in securities fraud cases and will help to guide you through the process with a free consultation to determine whether your losses are the result of actionable misconduct.
What the Edward Jones Investigation Found
The $17 million settlement stems from a four-year investigation involving 14 state regulators. At the center of it was how Edward Jones (CRD#: 250) supervised customer transitions from commission-based brokerage accounts to fee-based advisory accounts—a process that affected thousands of investors.
According to regulators, the firm’s practices raised concerns for several reasons:
- Double-charging clients: Many investors who purchased mutual funds with a front-end sales load in brokerage accounts were later moved into advisory accounts. These accounts charged ongoing fees, meaning clients paid both the initial load and continuous advisory fees.
- Insufficient fee offsets: While Edward Jones offered some fee adjustments to account for the front-end load paid on mutual funds, regulators found that these offsets often didn’t fully cover the difference, leaving investors with increased overall costs.
- Inadequate supervision: The investigation looked into the supervisory systems Edward Jones had in place to ensure these transitions were in the clients’ best interests.
- Failure to communicate risks: Financial advisors were reportedly encouraged to discuss the impact of new fiduciary regulations with clients but may not have clearly communicated how changes would affect investment costs.
These issues occurred primarily between 2016 and 2018 and were linked to Edward Jones’ response to the Department of Labor’s now-defunct fiduciary rule.
How Account Types Affected Fees
One of the major concerns involved the shift from brokerage to advisory accounts. These account types carry different fee structures:
- Brokerage accounts: Typically charge commissions per transaction. Class A mutual funds in these accounts often come with a one-time front-end load fee.
- Advisory accounts: Charge an ongoing percentage fee based on the total assets managed. These fees are continuous and not linked to specific trades.
Some investors had just paid large upfront fees in their brokerage accounts and were then shifted to advisory accounts—where they began paying new, recurring fees, even though they already paid for their investments through commissions.
The Impact on Edward Jones Clients
Many investors affected by this issue were unaware they were paying more than necessary. According to Arkansas regulators, Edward Jones retained over $10 million in front-end loads that weren’t properly applied toward advisory fees.
If you were a client who transitioned accounts during this time or held Class A mutual fund shares before moving into a fee-based account, you may have unknowingly overpaid.
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Understanding Edward Jones’ Track Record
Edward Jones is one of the largest brokerage firms in the United States, known for offering both brokerage and advisory services. While many investors trust the firm’s local, community-based model, this recent investigation adds to a growing list of regulatory concerns.
Here are a few examples of past issues associated with Edward Jones:
- Mutual fund fee overcharges: The firm has previously paid millions in fines for failing to apply mutual fund fee discounts properly.
- Sales practice concerns: Edward Jones has faced regulatory actions tied to the way certain investment products were recommended or sold to clients.
- Supervisory lapses: Past disciplinary records show instances where the firm lacked sufficient oversight of its financial advisors.
- Conflicts of interest: Edward Jones has been scrutinized for compensation structures that may incentivize advisors to recommend certain products over others.
A History of Regulatory Attention
Regulators have consistently pushed Edward Jones to strengthen its compliance systems. In several cases, the firm was found to have gaps in its internal controls that allowed questionable sales practices to occur without being flagged.
Why These Patterns Matter
For investors, these repeated issues suggest a broader pattern of concern. While not every financial advisor at Edward Jones may have engaged in misconduct, the firm’s oversight practices have failed clients in multiple ways over the years. Understanding the firm’s history can help investors recognize if they were caught in a system that prioritized firm profits over investor interests.
Meyer Wilson Helps Victims of Edward Jones Misconduct Recover Losses
If you’re an investor who moved assets into an Edward Jones advisory account between 2016 and 2018—or suspect your account was affected by similar practices—you may have paid more than you should have. These additional fees weren’t always clearly disclosed, and many investors relied entirely on their financial advisors to guide them fairly.
At Meyer Wilson, we represent investors in cases against brokerage firms like Edward Jones. Our experienced legal team has successfully handled hundreds of cases involving excessive fees, improper investment recommendations, and failure to act in a client’s best interest.
If you or someone you know has been a victim of losses through a brokerage firm, contact our team at Meyer Wilson today. With over 20 years of experience and $350 million in recovered losses for our clients, we are well-versed in handling cases such as these.
Our lawyers are nationwide leaders in investment fraud cases.
Frequently Asked Questions
What is the difference between brokerage and advisory accounts?
Brokerage accounts usually charge per transaction (such as when buying or selling a mutual fund), while advisory accounts charge an ongoing fee based on the total value of your assets. Some investors may pay more in an advisory account depending on how their money is invested.
How could I have overpaid if I switched to an Edward Jones advisory account?
If you purchased mutual fund shares with a front-end load in a brokerage account and later moved to a fee-based advisory account, you may have ended up paying both the initial sales charge and ongoing fees—essentially paying twice for the same investment.
Was Edward Jones required to refund these fees?
In some cases, the firm provided a partial refund or fee offset, but regulators found that many clients still paid excessive charges. The recent $17 million settlement helps address this, but not all investors have been made whole.
Is Edward Jones admitting wrongdoing in the settlement?
As is common with regulatory settlements, Edward Jones did not admit or deny wrongdoing as part of the $17 million agreement. However, the settlement does resolve the concerns raised by state regulators about the firm’s practices.
Recovering Losses Caused by Investment Misconduct.
