When it comes to choosing an investment firm to manage your portfolio, Edward Jones and Fisher Investments are two of the biggest names in the industry. Both firms have been around for decades, manage billions in assets, and employ thousands of financial advisors across the country. However, there are some key differences between Edward Jones and Fisher Investments that investors should understand before selecting one. In this article, we will compare the business models, fee structures, investment strategies, reputations and client profiles of Edward Jones and Fisher Investments to help you determine which may be a better fit.
Edward Jones operates a decentralized franchise model while Fisher Investments uses a centralized management structure
One of the biggest differences between Edward Jones and Fisher Investments is their management structure. Edward Jones has a decentralized franchise business model, with over 18,000 locally-owned offices across North America. Financial advisors are independent contractors who pay fees to Edward Jones to operate under the company brand name. This gives advisors more autonomy to run their practices as they see fit. In contrast, Fisher Investments is highly centralized. All offices are company-owned and financial advisors are employees, not franchise owners. This gives Fisher a high degree of control over advisor practices and standardizes the client experience.
Edward Jones caters more to individual investors while Fisher Investments focuses on institutional clients
Edward Jones primarily serves individual retail investors, with a focus on middle class Americans and smaller portfolio sizes. The vast majority of Edward Jones clients are individuals investing their own money. Fisher Investments, on the other hand, mainly works with large institutional clients like pension funds, endowments and foundations. While Fisher does take on individual clients, their minimum account size is $500,000, pricing out many retail investors. Fisher’s institutional focus means they manage very large portfolios versus the smaller accounts Edward Jones typically oversees.
Edward Jones advisors provide comprehensive financial planning while Fisher offers investment-only asset management
Edward Jones promotes itself as a full-service financial advisor, not just an investment manager. Their advisors offer long-term financial planning guidance on topics like retirement, education savings, insurance and tax strategies. Fisher Investments explicitly states they only provide investment management services. They do not offer tax advice, estate planning or any other financial planning services outside of investing your money. Fisher aims to be hands-off, simply managing your portfolio while leaving holistic financial planning to other firms.
Fees are straightforward at Edward Jones but less transparent at Fisher Investments
Edward Jones uses a simple, transparent asset-based fee structure. Advisors charge an AUM fee, typically around 1%, deducted directly from client accounts. Fisher Investments fees are more complex. While rates start at 1.5% for larger accounts, fees can reach 3% after including administrative charges, commissions and markup on trades. Critics contend Fisher’s fees are not fully disclosed and are significantly higher versus competitors when all costs are considered. Edward Jones’ straight-forward, clearly disclosed pricing model has less potential for ‘hidden’ fees.
Edward Jones offers a buy-and-hold strategy while Fisher practices active management
The investment philosophies of Edward Jones and Fisher Investments differ considerably. Edward Jones utilizes a buy-and-hold strategy focused on long-term positions in stocks, bonds and mutual funds. Portfolios change slowly over time. Fisher Investments follows an active trading approach, making frequent changes to capitalize on short-term market opportunities. Their tactical style aims to outperform markets through active bets and constant position adjustments.
In summary, the decentralized structure, retail client base, financial planning services and transparent fees of Edward Jones cater to individual investors, while Fisher Investments’ institutional focus, asset-only management and active trading suits large portfolios. Understanding these key differences allows investors to select the investment firm that best aligns with their needs and preferences.