Edward Jones has plans to hire between 1,500 and 1,700 financial advisors in 2023, slightly up from the
The St. Louis-based brokerage, which is one of the largest wealth management firms in the country
Coming off a lackluster third quarter that saw
"We have 8 million existing clients, but there's another 40 million out there. Another 40 million potential clients that act and think like our existing clients," Don Aven, principal of Edward Jones, said in an interview.
He added that Edward Jones currently has a footprint in 68% of counties nationwide and wants to expand that by continuing to service potential clients in the firm's target population, which ranges across wealth segments from "people that are just starting" to business owners to the ultrarich, but generally value high-quality relationships with their advisors.
"Our main segment is the serious long-term individual investor," Aven said.
He added that over time, "we've seen our average account size increase" and the firm was building out capacity to help advisors increasingly cater to high net worth clients. "We're altering our product platform to be able to serve the different segments and meet their different needs, whether it's through security-based lending or some more type of personalized investment advisory solutions," Aven said.
Last week, Financial Advisor IQ
"Our traditional model has been one FA and a branch office administrator in an office," Aven said. But to further serve clients in a more personalized way, the firm was going to offer advisors "much greater flexibility in choice in how they build their practice, which will include multi-FA offices and teaming options."
That model would have more than one advisor sharing the same office, with each managing their own client books and their own financial and regulatory processes. "But we think that that'll really help with their success and retention, and help get their acumen to a higher level in a very short period of time."
In 2022, the firm opened around 170 of these offices, and it intends to expand that, Aven said.
"Another option we'll have for the FAS is the teaming options," Aven said, meaning that one financial advisor can work with administrative assistants who can, down the line, choose to become advisors by getting their Series 7 broker licenses. The roles include a registered brands associate, who will "work at the direction of the FA on deeply serving existing clients" and a registered brands associate who helps grow the book of business by liaising with prospects.
"That will allow the FA to really further enhance the clients' experience," Aven said. "It'll also give our branch office administrators a defined career path if they wish to pursue being an FA at some point."
Aven added that like several major firms, including wirehouses, Edward Jones was not altering its compensation for advisors in 2023. But unlike the wirehouses, which tend to offer a sort of golden-handcuffs-style upfront cash advance as a loan to recruit talent, Edward Jones will continue a policy of non-loan recruiting payments.
"Our compensation is very attractive when we bring someone over. We pay them a salary based off of what they were making before. Plus, in addition to that, we pay them on assets that they bring in over the next two years. And then in addition to that, they get paid all the revenue that their office generates," Aven said.
"And here's the big difference from most other firms: It's not a loan," Aven said. "We want FA's here because they want to be here."
In a competitive market for talent where advisors
Industry compensation consultant Andy Tasnady, the owner of Tasnady & Associates, said in an interview that Edward Jones' entry into teaming would help young talent joining the firm grow their business by getting support from more senior advisors.
"The challenge is, it's hard to ramp up on your own in a crowded field, particularly with some of the challenges with the newer competitors, the online fintech firms, the Schwabs and E-trades of the world," Tasnady said.
He noted that "it's always a good idea to provide as many alternatives as possible" for affiliation and staff growth, although he said the firm's ability to convert administrative roles to advisors might be limited, despite some likely instances of successful transitions.
"Typically the type of people that are in administrative roles, it's a different type of job, to go into a sales, revenue-generating type of role. It's a different type of personality."
Aven was more optimistic about the pathways rollout.
"You could take someone that maybe came right from college, and they went into that role for a couple of years. And then maybe they decide they want to be an associate financial advisor, and then maybe they want to be a financial advisor."
Existing branch office assistants, who already have demonstrated loyalty to the firm and can be bred as homegrown talent to help with retention, might also be good fits because of their deep operational knowledge, Aven said.
"We have lots of great branch office assistants. It's really the secret to our recipe, because they know the clients so well."
