Last week, I wrote about how some financial advisors at Edward (don't-call-us-"Ed") Jones were balking at signing the firm's new employment contract. Among other issues, the firm has a 5-year non-compete clause that one industry recruiter called "unenforceable" in its duration.
[Our Advisor Forums had this to say recently: The consequences for not signing is no job. Go ahead and tell them who's boss, then they'll show you to the door. It might be a different story if you're bringing a large book of business into EJ, but I don't why you would go to EJ with a book of biz.]
A spokesman for the firm sent me an email today stating the management's case. I will reprint the email below, in its entirety, and leave it uncommented on. I posted the Jones' employment contract for your, dear readers', reaction --- you can judge Edward Jones' official response for yourself. (See above for link.) In short the firm states that this employment contract is very similar to the industry's employment contract and, anyway, FAs have been signing it for years.
From Regina DeLuca-Imral, of Edward Jones:
Hi, David. Just checking in to see if you found out who you called at Edward Jones for comment. I see that your blog still says no calls were returned, but none of us in PR received any calls or emails from you asking for comment.
Over the last day or so, though, I investigated what you had in the blog. As it turns out, our employment contract has been in place since 2004-2005. The language is similar to other contracts in the industry. While the language may not be exactly the same, the restrictions on solicitation are very similar throughout the industry. I don't have other contracts in front of me, but I'm sure you could find them.
Financial advisors in California are re-signing their contracts because of a new state statute that goes into affect on Jan. 1. The only significant difference in this contract is the addition of a "commissions agreement." The rest of the contract is the same as it's been for eight years or so. Financial advisors are re-signing their contracts because the state of California will soon require those paid by commission to sign a "commissions agreement," either separate from the contract agreement or within the contract. We've chosen the latter to avoid having too many agreements to sign.