The very same funds that they sell to the investing public are not good enough them because they're too expensive.
In a lawsuit filed August 19th of this year on behalf of the employees of Edward Jones states that the high fees for investment management are costing them millions in retirement savings. The glaring hypocrisy is that the expensive funds highlighted in the lawsuit are the very same ones that they currently sell to their clients. What's good enough for you (the investor) is apparently not good enough for their own portfolios. Oh the irony!
Apparently, this is nothing new in the broker/dealer world. Employees are finally getting frustrated with the junk investments in their 401(k) plans - New Your Life Insurance, American Century Investments, Neuberger Berman, Morgan Stanley, and Franklin Templeton have all been targeted with lawsuits. (see video about broker's versus fiduciaries).
Edward Jones has relationships with all of the fund providers whereby they receive millions in revenue sharing for all the funds they sell to their clients. This is how the funds also ended up in the Edward Jones 401(k) plan. These providers are often called "Preferred Partners" and provide about 40 of the 50 fund options within the plan. These fund companies include American Funds, Franklin Templeton, Invesco, The Hartford, MFS, Lord Abbett, JPMorgan, and Goldman Sachs. If you have any of these funds in your portfolio it might be time to think about whether or not your advisor is acting in your best interest.
I for one am very happy to hold the same investments as the ones I recommend for my clients. I invest in very low cost, tax-efficient, and highly diversified funds and am never charged a fund load (sales charge paid at the time of purchase). I very much doubt that Edwards Jones would be involved in this lawsuit if they used these type of investments. But then again, they wouldn't have much of a business left if they stopped selling the more expensive mutual funds as that is a large part of how they make their money.