While its once industry-leading financial advisor headcount is falling, one of the largest wealth managers is growing under a different approach to hiring.
St. Louis-based Edward Jones boosted its revenue, profit and client assets by double digits in the second quarter on the strength of rising equity values and in-flows to its advisory programs and other kinds of accounts,
Note: Key metrics refer when possible to the company’s U.S. business, rather than its combined results including those in Canada, where it has 878 advisors. The company breaks out most, but not all of its returns between the two countries.
- Earnings: Edward Jones earned income before allocations to partners of $442 million on net revenue of $2.95 billion in the second quarter. The much higher asset-based fee revenue from the year-ago period, due to stock values and client account in-flows, drove up profit by 55% and overall U.S. revenue by 31%. Asset-based fee revenue surged by 39% year-over-year to $2.33 billion in the second quarter, more than offsetting the higher expenses for advisor compensation on the increased business.
- Client assets: Client assets under care soared by 31% from the year-ago period to $1.68 trillion in the second quarter on the higher equity values and net new assets that jumped 49% from the same time in 2020 to $21.7 billion. The average value during the quarter of each type of average client asset grew by at least 23% compared to the prior year: advisory programs ($613.7 billion); mutual fund assets held outside advisory programs ($571.3 billion); insurance ($89.0 billion); and cash holdings ($48.9 billion).
- Recruiting: The firm’s headcount slipped by 1% to 17,977 advisors. Edward Jones had a temporary pause on recruiting in 2020 during the coronavirus. It restarted hiring in the second quarter amid
the settlement of a racial discrimination lawsuit and an ongoing discussion across the industry about how to offer pathways into the profession withoutusing traditional training methods of cold-calling and sales among friends and family. “The Partnership 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,” according to the filing. Edward Jones, it continues, is “committed to an innovative and intentional strategy to grow its impact by offering a plan and resources for both current financial advisors and new hires that is intended to help promote branch team success. This approach may result in fewer financial advisors hired than in past periods.” - Remark: Last month,
for the 12th time in a row , Edward Jones received the highest satisfaction scores among employee advisors in J.D. Power’s annual survey. The company is rolling out additional ways of supporting its more than 15,000 branches aiming to meet the specific needs of their clients, Managing Partner Penny Pennington said in a statement. "As we continue to focus on growth with impact, we are implementing tailored plans for our financial advisors, to enable them to more deeply serve current clients and develop meaningful relationships with new ones,” Pennington said. “This is how we aim to help more people achieve what's truly important to them.”
