Edward Jones: Drinking The Kool-Aid

What's in the water supply at Edward Jones? For the 16th consecutive year, the firm scored the highest overall approval rating (9.4) on our Annual Broker Report Cards survey. Ed Jones reps may be pooh-poohed in some precincts as small and unsophisticated, but if that's true, at least they are happy, small, and unsophisticated. Doesn't hurt that Ed Jones never seems to make headlines these days well,

What's in the water supply at Edward Jones? For the 16th consecutive year, the firm scored the highest overall approval rating (9.4) on our Annual Broker Report Cards survey.

Ed Jones reps may be pooh-poohed in some precincts as small and unsophisticated, but if that's true, at least they are happy, small, and unsophisticated. Doesn't hurt that Ed Jones never seems to make headlines these days — well, not bad headlines anyway.

As one Ed Jones rep puts it, “Edward Jones may be considered ‘boring,’” but the firm “had no exposure to any of the mortgage problems due to our ethics and investment philosophy.”

Under the five-year plan laid out earlier this year, James Weddle, managing partner, says the firm is going to increase FA headcount by 8 percent to 10 percent this year. So far, so good: The firm had added 850 FAs (as of mid November), and Weddle says he expects that number to reach 1,000 by the end of the year — a growth rate of about 9.3 percent. This would make for a global advisor army of 12,000 dually registered FAs, an impressive cohort. (Dually registered advisors can broker trades as well as offer comprehensive financial advice as a fiduciary. Who's unsophisticated now?)

For the past couple of years, Ed Jones' Achilles Heel has been its lame technology offering, but advisors say the firm is making progress. Last year, Ed Jones rolled out a suite of financial planning software called Financial Assessment Solution Tools (FAST), bringing advisors to equal footing with their colleagues at other financial firms. And, in the summer, the firm rolled out the much-awaited, fee-based advisory account (called Advisor Solutions Account), which attracted assets quickly ($4 billion by mid-November). Advisor Solutions Account also has the distinction of being the largest new product or service launch the firm has ever had.

Edward Jones at a Glance

Company hero: Jim Weddle

Share price performance: Private company

Q3 net client assets, growth (decline) vs. 07:
$477.0 bn, (9.8%)

Q3 advisors, growth (decline) v. 07:
11,900, 9.0%

Performance of retail unit (Q1-Q3 2008):
Revenues: $3.0 bn
Pre-tax income: $274.7 mn
Profit margins: 9.1%

Branches:
U.S.: 9,200
Canada: 590
U.K.: 230

Write-downs, loss reserves: N/A*
Bank deposits: N/A*
Bank branches: N/A*

*Edward Jones does not have private, retail or commercial banking operations.

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