For full disclosure, NorthStar Capital Advisors is a registered investment advisor that operates under the fiduciary standard of care for its clients.

A comprehensive examination of Edward Jones’ business model was published yesterday: Can Your Edward Jones Financial Advisor Really Serve Your Best Interests? (The Motley Fool)

The authors’ main thesis is the broker-dealer model that Edward Jones operates is generally inferior to a fiduciary model for individual investors seeking advice.

The authors feel Edward Jones advisors can’t really serve their customers’ best interests because of the multitude of ways they can get paid to preferentially push high-fee products.  Here are some of the components of its financial advisor’s compensation:

The authors conclude: “investors are at greater risk of being taken advantage of when their advisor is not required to put them first, has strong economic incentives to generate fees, and doesn’t need to disclose those conflicts of interest in a particularly clear way.”

To its credit, Edward Jones does an outstanding job of disclosing how its financial advisors get paid in this 46 page document.

Please refer to the original article for a thorough vettting of Edward Jone’s approach.