Edward Jones to hire 1,500 financial advisors in 2022

Edward Jones to hire 1,500 financial advisors after headcount fell in 2021

March 14, 2022 5:13 PM

For the first time in a decade, Edward Jones sustained a net loss in its U.S. headcount of financial advisors.

The brokerage that went into 2021 within 2,000 registered representatives of its onetime goal of reaching a force of 20,000. But the firm lost ground after a hiring freeze on trainees and a change in the St. Louis-based firm’s recruiting and advisor development strategy, according to the March 11 annual report of Edward Jones’ parent, The Jones Financial Companies.

Edward Jones company plans to hire about 1,500 advisors this year, with an estimated 15% of them, or 225 reps, being experienced candidates, according to an email from spokeswoman Regina Deluca-Imral.

The firm is carrying out “an intentional strategy to grow its impact by offering a plan and resources for both current financial advisors and new hires to promote branch team success,” Deluca-Imral said in a statement.

“In response to the COVID-19 pandemic, the firm implemented measures to optimize firm resources and control costs, including a temporary pause on the recruitment of non-licensed financial advisors during 2020,” Deluca-Imral said. “The firm remains committed to financial advisor growth to continue to serve existing clients and future clients and create a positive impact in our communities by hiring both experienced financial advisors and non-licensed candidates in future periods.”

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As part of the yearly disclosure, the company also shared: its progress on other metrics tracking its efforts to boost the number of women and minorities among its ranks; a new racial discrimination lawsuit a year after the company settled an earlier one for $34 million; the jump in revenue and income last year that occurred despite the lower advisor headcount; and the higher expenses relating to compensation for Edward Jones practices nationwide.

To see the most interesting takeaways for advisors, scroll down our slideshow. For a look at the overarching figures included in the company’s brief financial disclosure in January, click here. To see where the company’s headcount stood after the third quarter, click here.

Note: Key metrics refer when possible to the company’s U.S. business rather than its combined results including those in Canada, where it had 852 advisors at the end of 2021. The company breaks out most, but not all, of its returns between the two countries.

Financial advisor headcount

In 2011, the number of Edward Jones advisors ticked down by 3%, or 358 reps, to 11,622, according to its annual filings. In the following nine years, the number soared by 58%, or 6,699 reps, to reach 18,321 by the end of 2020. At one point as late as 2019, managing partner Penny Pennington spoke of a force as large as 30,000 reps. Amid the pandemic, LPL Financial surpassed Edward Jones as the largest brokerage in terms of advisor headcount after the second quarter of 2021. For the year, the number of Edward Jones advisors slipped by 2%, or a net 350 reps, to 17,971.

Client assets

One aspect of the company’s 2015 goal to reach 20,000 reps by 2020 included managing $1 trillion in client assets, and Edward Jones hit that mark by 2017, its annual reports show. In 2021, client assets under care jumped 18% year over year to $1.78 trillion due to rising equity values and net new assets. The in-flow surged by 40% to $89.5 billion. In a section disclosing a “significant revenue source,” the company noted that it distributed mutual funds from 124 different families last year. Just one of the companies, Capital Group’s American Funds Distributors and its affiliates, represented 12% of Edward Jones’ total revenue for the year.

Tracking representation

The company has joined a handful of other wealth managers who have started releasing limited demographic data about their financial advisors and other employees. Although the numbers in the annual report don’t include specific percentages of Black, Hispanic, Asian American or other minority professionals, Edward Jones gave the current share of advisors, general partners and “leaders” across the corporate office who are women or “people of color” and its goals for 2025. At least 22% of the firm’s advisors are women, while 9% are people of color. Within three years, the company aims to have a force that is 30% female and 15% people of color.

New lawsuit

Current and former Edward Jones brokers filed a potential class action lawsuit in St. Louis federal court last week alleging that the firm continues to discriminate against women and minorities when assigning client accounts, the news outlet AdvisorHub reported. Ex-advisors who are Black had cited problems with the firm’s practices around neighborhood and account assignments in their earlier lawsuit, which ended with a major settlement last year that included a pledge by Edward Jones to alter its policies. “Edward Jones and JFC deny the allegations and intend to vigorously defend this lawsuit,” according to the disclosure of the latest lawsuit in the firm’s annual report.

Charitable efforts

In 2021, the company donated over $26 million to 259 different organizations and educated more than 175,000 people through its Financial Fitness program, according to the firm’s March 14 annual “purpose, inclusion and citizenship” report. “Through our purpose and partnership for positive impact, we are able to extend our reach into the communities we serve, providing access to financial knowledge for our clients and helping people connect to their own purpose and achieve things in their lives they might not have known were possible,” Pennington said in a statement. “Our efforts to partner for lasting financial strength, promote healthier futures and advance inclusive growth in our own workplace extend into society through the dedication of our approximately 50,000 associates who give of their time, talent and treasure to improve people's lives in their communities."

Rising expenses

Asset levels and values determine the firm’s compensation expenses, which include its pay for advisors. Last year across the U.S. and Canada, the firm’s financial advisor compensation and benefits climbed by 20% to $5 billion due to higher revenue tied to commission payments, according to the firm. Average annual operating expenses per advisor in the U.S. and Canada rose 17% to $183,686. The rising costs came from “intentional investments in the Firm's technology infrastructure, digital initiatives, virtual enablement tools and test and learn pilot programs, as well as increases in advertising, legal and other various items, which were spread across a decreased average number of financial advisors in 2021,” according to Edward Jones.