The day after his retirement in December, Edward Jones broker Jim Goodknight, 60, headed to the lake by his home in Joplin, Mo., to spend some well-deserved time fishing. Seeing him alone, surrounded by silence, it would be easy to forget that the unassuming Goodknight changed the way Edward Jones does business.
In 1978, Goodknight, an eight-year broker overwhelmed with business, realized he needed help. A family friend's son, a fresh-out-of-college kid named Don Swanson, was looking to enter the business. Goodknight, eager for some help, gave Swanson “quite a few” of his smaller accounts that were taking up too much of his time. His workload diminished, Goodknight was able to increase his own productivity. Swanson, meanwhile, had secured both a mentor with considerable experience and a viable clientele. The process eased Swanson into the business, and, eventually, he managed to open his own office.
Thus was the “Goodknight Plan” born.
A few years later, Goodknight met with another local broker, Dan Stanley, and offered him a more detailed plan offering Stanley 80 percent of his accounts representing 20 percent of Goodknight's assets. The following year, Goodknight managed 20 percent growth within his remaining accounts. Shortly thereafter, Goodknight began talking with higher-ups at Edward Jones about this arrangement, and, in 1996, the firm formulated a formal Goodknight Plan.
This is the plan in a nutshell: One broker provides a younger broker a percentage of his business after first putting it in a shared “house account,” a type of transitional account, as both broker and prospective client adjust to the change. Eventually, the younger broker draws the clients into his own account, only to perhaps someday pass clients off to another broker. In the meantime, the original broker can just keep adding Goodknight Plans.
According to Tom Lynn, leader of Edward Jones's “Goodknight Department,” 280 plans have gone into effect in the last three years. In July, Edward Jones celebrated its 500th Goodknight graduate. “It's a completely voluntary service, but we find more and more people using it,” Lynn says. “It's just an overwhelming service for the new people.”
Greenfield, Ind.-based broker Bob Campbell started two plans within a year and is about to start his third. “I have more assets under management today than I've had at any point,” Campbell says.
Brokers who use the Goodknight Plan like to emphasize that the list of clients to be transferred — selected by the two brokers and based on criteria which includes account size, personal relationships and workloads — is flexible. If any clients resist the change, “we just simply take ‘em back,” Goodknight says.
Goodknight, who had already made plans to pass along most of his old accounts upon his retirement to his son Patrick, says he doesn't know what all the fuss is about. “I've always been surprised it became famous,” Goodknight says. “I mean, it just seems like common sense.”