Just as many big firms are scaling back their training programs to cut costs, Edward Jones is opening a new facility to train rookie brokers in its hometown of St. Louis, MO.

The facility is set to open on October 5th and will train financial advisor recruits who are straight out of college as well as those who have changed careers.

Edward Jones plans to increase its advisor force by 8% this year, or 990 new advisors, and add another 1,000 advisors next year, according to Phill Leathers the firm’s general partner for financial advisor recruiting. Fifteen percent of those new recruits will be recent college graduates, while 85% will be people looking for a career change or experienced advisors changing firms, Leathers says.

“We have an extensive training program,” Leathers adds. “When everyone else is cutting back, we see it as a significant part of our culture.” He visits universities to talk to potential advisors, and is particularly impressed with the University of Central Florida’s professional selling and entrepreneurial programs.

Last week UBS announced that it was cutting around 180 of its rookie brokers. Earlier this year, Merrill Lynch laid off hundreds of its trainees, only to announce that it was relaunching its program in July and resuming its hiring of trainee brokers. Merrill has not revealed the number of trainees it will hire. In a statement, a Morgan Stanley Smith Barney spokesperson said: "A focus of the joint venture is to concentrate on organic growth, and we are committed to expanding and continually investing resources dedicated to the growth of our financial advisor training program." Wells Fargo Advisors did not immediately return calls for comment on its training program.

Philip Palaveev, president of Fusion Advisor Network, says the bigger firms are focusing on hiring experienced advisors from other firms rather than training rookies. He says it costs an average of $200,000 to train a rookie advisor and, on average, only one out of every five trainees is still with the firm 10 years after completing their training.

“Firms would rather use the money to recruit experienced advisors instead of investing in the risky business of training new advisors,” Palaveev adds.  

Alois Pirker, research director at Aite Group, says that smaller firms can no longer rely on wirehouses to train the rookies for the whole industry. “Second tier firms need to step up and build a pipeline of future advisors themselves,” he says.

Palveev says that the lack of advisors will become increasingly problematic over the next decade as it takes around 10 years to train a fully capable, high-producing advisor. “So, if we need experienced advisors in 2020 we better start training them now,” he says.

It’s a point that Leathers understands. “Just moving people from firm A to firm B, it’s a zero-sum game,” he says. “The average age of advisors is mid-fifties. If you just keep focusing on the same pool what will happen to the service to your clients in 15 to 20 years?”