Edward Jones saw hefty inflows of net new assets in its second quarter, bringing its total client assets under care to just over $2 trillion.
St. Louis-based Edward Jones reported in a filing with the Securities and Exchange Commission on Friday that it brought in $19 billion in net new assets in the second quarter of 2024. Although that figure was down 21% year over year, it was enough to push the firm's assets under care up to $2.06 trillion. Edward Jones' assets under care had
The firm also reported starting relationships with 60,000 net new households in the second quarter, a figure up 40% year over year. Of its assets under care in the second quarter, $812 billion was held in advisory accounts.
Edward Jones saw its fee revenue from managing those assets rise 16% year over year to over $3 billion in the second quarter. All told, it saw its net revenue for the quarter rise by 16% to $3.9 billion.
"The increase in fee revenue was primarily due to increases in advisory programs with higher average equity market levels and the increase in client dollars invested in advisory programs," according to the
READ MORE:
Compensation expenses up
Offsetting that revenue was $3.4 billion in operating expenses, up 16% year over year. That was driven mainly by "increases in financial advisor compensation and benefits expense and variable compensation. Financial advisor compensation and benefits increased primarily due to an increase in revenues on which commissions are earned," according to the 10-Q.
The firm reported seeing its compensation to advisors rise by 19% year over year to $1.5 billion. Its spending on home and branch office employees increased by 5% to $604 million, and its expenses for variable compensation rose by 25% to $591 million.
Advisor headcount
Edward Jones reported having 19,589 advisors at the end of June. Although that headcount was up 4% from
That resulted in a turnover rate — the percentage of its total headcount that leaves in any given period — of 5.3%. Most of the departing advisors had been with the firm five or fewer years, according to the 10-Q.
"By now, if you were looking for an excuse to stay at the firm, those changes are probably enough for you," Diamond said.
Among other things, Edward Jones has scrapped a policy that used to have most of its advisors working alone in separate branch offices. Now they can join teams or employ the services of associate financial advisors.
Edward Jones has also begun to allow advisors to engage in discretionary transactions — or trade on their clients' behalf after receiving initial approval — through its
"Edward Jones continues to invest in new tools and technology, an expanded set of products and solutions, and new practice models that give financial advisors greater autonomy, flexibility and choice in how they serve clients," a spokesperson for the firm said. "The firm remains focused on developing and rewarding branch teams and building new practice management capabilities to help them grow their practices."
Profit sharing with partners
Edward Jones is set up as a private partnership that shares any profits it makes with financial advisors, branch administrators and executives. The firm reported it allocated $470 million to these partners in the second quarter, a figure up 15% year over year.
That gave it an operating margin of 11.8%, according to the 10-Q, "reflecting a strategic balance between investing in the future and current financial results."
