Edward Jones is coming off a year that saw a
Historically, Aven said, Edward Jones has been built on single wealth managers working alone alongside office administrators in branch offices. In recent years, he said, the firm has begun allowing them to work in teams, to share an office under the same roof with another advisor or to employ the services of an associate financial advisor.
Aven said those options have helped make Edward Jones appealing not only to current employees but to advisory teams who might be considering moving to the firm from elsewhere. He noted that the percentage of advisors who work as part of teams is on the rise throughout the entire industry.
"Now the ability to potentially transition their team over to Jones has gotten us a lot of interest," Aven said.
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Edward Jones has reported that 1,600 advisors and support professionals are taking part in these new arrangements. The firm expects the figure to nearly double to 3,000 this year, and that roughly 20% of its offices will be taking advantage of these options.
But some say the arrival and departure numbers
Phil Waxelbaum, an industry recruiter and the founder of Masada Consulting, said Edward Jones does very little recruiting from other firms. So, in its case, the replacements are almost all industry newcomers.
That means Edward Jones' attrition figure tells only half the story.
"This is nothing more than fun with numbers," Waxelbaum said. "There is no way to prove anything. If they'd tell us 'here are the 50 advisors who left and these were their production rates, and here were the 100 advisors who joined and we're optimistic that one day this will be their production rates,' that would be meaningful."
New office arrangements isn't the only change Edward Jones has made in recent years. The firm has also begun to allow advisors to engage in discretionary transactions — or trade on their clients' behalf after receiving initial approval — through its
And Edward Jones has been making use of the financial tech firm Evestnet's MoneyGuide system, which provides advisors with visual representations of tax planning, income distribution and the benefits and drawbacks of annuities, among other things. Aven said Edward Jones is also going to work with the software giant Salesforce on a new customer relationship management system, which will provide clients with their main means of dealing with the firm online.
"These are tools that are allowing our advisors to get a deeper understanding of what's truly important to our clients," Aven said. "And it also provides capacity to our advisors through leveraging that technology."
Rick Rummage, an industry recruiter and the CEO of The Rummage Group, said Edward Jones still has a good deal of ground to make up with its competitors.
"They tend to be 10 to 20 years behind the competition with the way they treat advisors and their investments in technology," he said.
Rummage also said Edward Jones tends to have some of the lowest recruiting deals for transitioning advisors. Perhaps for that reason, he said, many of their hires tend to be newcomers to the industry rather than experienced teams plucked from rivals.
That can be a difficult way to add to the firm's headcount, Rummage said. The dropout rate for novices in the advisory industry, he noted,
"They do seem to have been slightly more successful in bringing in new people into the business," Rummage said. "They've had slightly higher than the average success rate with that."
Aven said Edward Jones' typical recruiting deal consists of an offer equal roughly to two times an advisory team's previous annual revenue. Many of its rivals on Wall Street offer anywhere between three to four times those trailing 12 months of revenue.
Edward Jones also does not use the sort of recruiting loans that wealth managers will often offer advisors in return for a commitment to stay in place for a certain period of time. These "promissory notes," as they're sometimes called, can be generous but also bind advisors to stay put for as long as 10 years.
"There are no handcuffs," Aven said.
Aven said Edward Jones is also supporting advisors through professional development. He said the firm has 3,600 advisors who have obtained Certified Financial Planner designations, often considered the gold standard for expertise and conduct in the industry. His expectation is that figure will rise to anywhere between 4,000 and 4,500 by the end of the year, he said.
"I think that just shows our commitment to help our FAs continue to raise acumen to serve their clients the best way possible," Aven said.
Edward Jones' 2% increase in advisor headcount last year brought its total to 19,232. Its assets under care were up 17% to $1.9 trillion, helping to generate nearly $14 billion in revenue. Of that, $11.2 billion came from fees charged for managing accounts.
Offsetting that was $12 billion in operating expenses, comprising both compensation and benefits and expenses related to communications and data processing. Of that, $5.2 billion was compensation to financial advisors, according to the Form 10-K.
The results helped bolster Pennington's salary into the same arena as many of her Wall Street counterparts. Her $25 million pay day, for instance, compares favorably with the $29 million
Pennington's 2023 pay consists of a $250,000 base salary along with awards tied to the firm's performance. In another sign that things are going well at Edward Jones, Edward Jones reported having 8 million clients in North America at the end of 2023. Aven said he and others at the firm think there are 40 million more prospects to add to that number today.
He said Edward Jones views its "typical client" as someone having between $250,000 and $5 million to invest, although those limits are far from definitive.
"We're now in 68% of the counties in the U.S., and we still have 40 million potential clients out there," he said. "That's why we feel it's our obligation to continue to grow and reach out to them.
