Edward Jones has a long history of operating under a one-advisor-per-branch model. But about a year ago, the firm said it would let advisors co-locate in the same building if they chose to. The firm has since expanded the team-based approach: Now, advisors can share clients as well.
The brokerage firm has some 600 of its more than 19,000 advisors operating in some form of team model, whether that’s co-locating or sharing clients, said CEO Penny Pennington, in an interview with WealthManagement.com. She expects that to reach 1,000 by the end of the year.
“Whether a financial advisor is ready to go into a teaming relationship or not, what our financial advisors see is that we're opening the aperture for them in terms of more flexibility and choice for how they want to envision their practice over the next two, five and 10, or way beyond that number of years,” Pennington said.
Under the newest team model, Edward Jones has created an “associate financial advisor” position. These are fully licensed advisors who share a book of business with a veteran financial advisor, working to broaden the relationships with the clients. The veteran advisor is still the one bringing on new business.
The firm currently has about two dozen of those types of teams in place, Pennington said, adding that it's a particularly good model for families, where a child may want to take over the business from a parent, for instance.
“We've got a lot of kids who grew up here at Edward Jones, who see the life of impact that their parents have had and are wanting to come into the practice,” Pennington said.
The associate financial advisor role also provides a career path for branch office administrators, the client service professionals in the branches. The firm has about 22,000 of those branch office administrators, many of whom have ambitions to become licensed financial advisors.
In addition to expanding its teaming options, Edward Jones also has a growing focus on financial planning, Pennington said. Last year, 600 Edward Jones advisors earned their CFP designation, and the firm is on track by the end of next year to have more CFPs than any other company in the industry.
“We are looking forward to being the most advanced, accredited firm in our industry.
“We have a real focus on what we call goals-based advice, which is an approach to financial planning and investment management that's very high value and that we're very good at, and frankly have democratized the availability of that across North America as a result of our size and scale,” Pennington said. “Full on financial planning is becoming more and more what multiple generations of investors are very interested in. So when you think about the skills associated with that, the CFP always comes to mind.”
The firm is rolling out MoneyGuideElite, Envestnet’s financial planning software, to all of its branch teams by the end of the year. The first 200 advisors got access to the software in May; the next 3,000 will have access in the fall and the remaining 15,000 advisors by year-end.
The firm will also start rolling out Salesforce as its new client relationship management system next year.
“If you think about that engine as a way to more efficiently and effectively apply great engagement strategies to particular groups of clients ... a financial advisor can just be smarter," she said. "And then frankly, we'll be able to leverage those insights across the entire 8 million clients.”