In the latest indication of the fiercely competitive market for advisor talent, Edward Jones is overhauling its recruiting deal for experienced practitioners.
Among other changes, the firm is replacing an income guarantee with a salary for one year based on an advisor’s trailing 12-month production at their former firm and enhancing an asset compensation bonus.
“Now they have a guaranteed salary, plus commissions on top of that, plus the asset bonus. It will result in much more cash flow,” says Don Aven, principal of experienced financial advisor talent acquisition at the Edward Jones.
The size of the recruiting deal is tailored to individual advisors, according to Aven, who did not go into further detail.
Edward Jones has been steadily and organically growing its brokerage ranks in recent years, relying heavily on its training program. Advisor headcount stood at 17,830 at the end of 2019, up about 1,000 from the prior year. Data for 2020 will be released next week.
While the training program remains a key part of the firm’s strategy, hiring experienced advisors will play a bigger role going forward, according to Aven. And the firm hopes its new recruiting deal will attract more talent from rivals.
Potential hires include independent advisors as well as solo practitioners at wirehouses and regional BDs. The company’s current advisors often provide some of its best leads for new recruits, according to Aven.
The firm now awards a bonus for assets brought over to Edward Jones within the first two years of employment (up from one year). “Some people have non-competes, and they worry they will have issues bringing over all those assets. This alleviates that,” Aven says.
Unlike its competitors, Edward Jones does not offer new recruits an upfront hiring bonus, which is typically given in the form of a promissory note forgiven over a period of years.
Aven points to what the firm sees as several competitive advantages in its recruitment, such as its compensation plan.
On Wall Street presents its annual analysis of base pay at wirehouse, regional and national broker-dealers.
Edward Jones also operates a bit differently than its wirehouse and regional broker-dealer counterparts. Edward Jones advisors typically work solo in a branch with an assistant and the firm’s offices are often situated in small towns and suburbs. The firm says it prefers its advisors be located in the communities and neighborhoods where clients live.
The coronavirus crisis has presented some hurdles to traditional recruiting practices. Face-to-face meetings and tours of company headquarters are clearly more difficult to do. These challenges have not stopped advisors from switching firms during the pandemic, however.
Edward Jones is not a member of the Broker Protocol, an industry agreement that permits advisors switching between member firms to take basic client contact information with them. Two wirehouses — Morgan Stanley and UBS —
