Despite having options for retail clients to save and borrow, and bank partners such as US Bank, PNC and Bank of New York, Edward Jones is looking to start its own de novo bank.
The St. Louis-based brokerage announced Wednesday it submitted an application to charter a Utah industrial bank called the Edward Jones Bank to the Federal Deposit Insurance Corporation (FDIC) and Utah Department of Financial Institutions. Edward Jones has no plans to change its existing relationships with its bank partners, but this gives the firm's retail clients additional banking services around saving and lending.
The process is expected to take several months, said Matt Burkemper, the Edward Jones principal responsible for banking. If approved, it should be operational to Edward Jones' 7 million clients in late 2021.
According to the FDIC's transparency and accountability webpage, the institution processes applications in an average of 208 days (median is 186 days). And within the past 12 months, the FDIC hasn't denied any applicant deposit insurance.
“If and when this does get approved, it allows us to do what we focus on the most and we have a deep focus on how our branch teams can better serve our clients," Burkemper said. "And what a bank will do will just enable us to continue to serve our existing clients more deeply."
“It’s very much focused on making it a more fluid way for the client to work with Edward Jones,” said Raymond Dardano, who is set to become the bank's president. Dardano, the former president of Marlin Business Bank in Utah, started in Jones' cash and lending division in January as the firm's subject-matter expert on banking. He previously helped start UBS Bank USA in 2003 and presided over it for nine years.
Edward Jones isn't revealing details for the potential consumer banking products it will provide, but Dardano and Burkemper both reiterated they will be “very competitive.”
While this is Edward Jones' first attempt at establishing its own de novo bank, other large wealth management firms have already taken the leap. Ameriprise most recently started a consumer bank in 2019, and Schwab established an online one in 2003.
The establishment of a bank will not change the way Edward Jones' 19,000 plus advisors work with clients, Burkemper said.
“It just allows our financial advisors that have these deep relationships with our clients to be able to work with those clients and help them organize and have deep conversations on the right way—or optimal ways—for them to save, or spend, or borrow,” Burkemper said.