In this article, we’ll discover:
• Full-service and budget investing accounts can be opened at Charles Schwab in advisory and brokerage modes.
• Edward Jones only offers full-service accounts. They are available in managed and brokerage varieties.
• Advanced trading software will be found only at Schwab.
Edward Jones vs. Schwab Introduction
Before you open your next brokerage account, first consider what Edward Jones and Charles Schwab can offer you.
Investment Services
Edward Jones has a large network of branch locations where customers go to seek financial help and open accounts. It is not possible to open an account online. The company offers both investment-advisory and brokerage accounts, and both have access to stocks, bonds, annuities, mutual funds, and exchange-traded funds.
Charles Schwab has fewer brick-and-mortar locations than Edward Jones, although a brokerage account with Schwab can be opened online. A few accounts may require a paper form or an investment advisor representative. One of the company’s managed accounts, Intelligent Portfolios, can be opened online. This is the company’s robo program. Edward Jones does not offer automated accounts.
In Schwab’s brokerage accounts, which can be either full-service or self-directed, it’s possible to trade every asset class that Edward Jones offers plus foreign stocks, option contracts, forex, and futures.
Winner: Schwab
Banking Services
Investing is just the beginning with these two financial powerhouses. Schwab runs its own bank with FDIC insurance, so banking is an entirely different avenue of possibilities. Several cash services are available through this division of Schwab. We’re talking checking accounts, savings accounts, home loans, and credit cards. An ATM card can be used with the checking account for fee-free withdrawals from any machine in the world.
Edward Jones has some of the same banking services that Schwab offers. It doesn’t own its own bank, although it does partner with a lot of banks to provide FDIC insurance. In fact, there’s more insurance available through Edward Jones thanks to a sweep program that Schwab doesn’t have.
The Flex Funds® account at Edward Jones comes with checkwriting and a debit card. Interest rates are rather low, as they are at Schwab. The debit card does not offer refunds of ATM fees.
Winner: Schwab
Margin Services
Besides standard cash accounts, Edward Jones and Charles Schwab both offer margin accounts. These special accounts can purchase securities with leverage, and in the case of Schwab only, they can trade advanced option spreads.
Margin debits at Schwab cost anywhere from 12.575% to 10.825%, depending on the exact balance, with negotiated rates above $500k. Edward Jones is slightly cheaper with a range of 9.5% to 6.25%.
Customers of both firms can withdraw cash from margin accounts with positions serving as collateral.
Winner: Although Edward Jones has the better rates, we think Schwab is probably the better overall deal for margin customers due to option spreads and self-directed trading
Website Tech
Edward Jones’ website has a lot of useful features on it. These include account management and educational resources. The site does not include any actual trading features, however.
Charles Schwab’s website does have trading tools on it. Besides charting and order tickets on the website, there is a web-browser platform with lots of useful features. Called thinkorswim, this really nice platform offers Level II quotes, a pro-level order ticket, charting with technical indicators, and simulated trading through a feature called paperMoney.
Winner: Schwab
Other Software
The situation with mobile apps is much the same. Edward Jones emphasizes account management over actual trading, although users will find a great deal of information they need, including contact details on the assigned financial planner.
Schwab has two apps. One is the main app, while the other is a thinkorswim app. The former has a great deal of market news and can be used to open new accounts. The latter app is the one experienced traders will want to use. It has lots of pro-level trade types and can submit orders for futures and forex. Despite the mobile format, charting is on a very high level with hundreds of technical indicators.
Last, but certainly not least, is thinkorswim in desktop mode. This is the software’s most advanced level, and there are lots of great tools integrated. We especially enjoyed using time & sales data, direct-access routing, and the security scanner. Like the web-based version of thinkorswim, there is a demo mode, which is necessary to learn this advanced piece of software.
Winner: Schwab
Supplementary Services
Fully-Paid Securities Lending Program: Schwab has it.
Systematic Mutual Fund Investing: Both firms have it. Schwab has it on the sell side, and Edward Jones customers can set up stock purchases.
IPO Availability: Only with a Schwab account.
Extended Hours: Schwab customers can trade futures, forex, and some securities almost 24/6.
DRIP Service: Both broker-dealers have it.
Fractional Shares: Schwab traders can buy the S&P 500 stocks using whole dollars.
IRAs: Retirement accounts are available at both firms, although only Edward Jones has IRA fees.
Winner: Schwab
Recommendations
Mutual-Fund Trading: Schwab.
Small Accounts: Definitely Schwab.
Beginners: Either firm with a managed account.
Stock/ETF Trading: Schwab with thinkorswim.
Long-Term Investors and Retirement Savers: Both firms are very strong here. Self-directed investors at Schwab have ample online tools for extra assistance.
Edward Jones vs Charles Schwab Judgment
Although Edward Jones may have a closer branch location, that doesn’t mean it’s the better investment firm.
Open Charles Schwab Account
Open Schwab Account
Updated on 1/1/2025.
Continue Reading