Edward Jones has prided itself on a business model with solo practices for 100 years. But now it says it has recognized that changes are taking place in the industry and that there’s a need to serve its clients more efficiently, so the firm has moved into offering business models beyond its well-known solo advisor offices, according to an executive at the firm.
“We’re looking at expanding our multi-FA spaces, [where] historically our firm has leaned much more heavily on one advisor, one officer administrator in an office,” said David Chubak, head of the U.S. business unit at Edward Jones.
The firm said a single practice model may no longer accommodate all of its clients’ needs. Instead of abandoning solo practices, however, Edward Jones is allowing its advisors to choose the model that works for them so they can find one that offers them better success at their particular locations, he said.
“Edward Jones’ traditional model—with one financial advisor and branch office administrator per office—has served the firm well for the last 100 years,” he said. “Many financial advisors and their client support team members prefer and will remain in this model.”
In one of the new practice models, the firm will bring another financial advisor into an office who can co-own a book with the original advisor. Another option advisors will have is to hire an associate financial advisor or a registered branch associate who will help manage the practice so that it has greater capacity, Chubak explained.
“The firm’s new practice models and new roles offer additional options for how clients work with their financial advisor and how branch teams work together, in addition to building capacity for branch teams and deeper experience to serve more clients more completely,” he said.
He said that over time there will be an evolution, and the firm will see a combination of different successful models.
“You’ll see Edward Jones be a model where we want to give FAs the choice, tools, the investment, the enablement, [so they can] build a practice that meets their potential but [it] doesn’t have to be a single model of how you have to make it happen.”
The change is the latest in a series the firm introduced to help its advisors work with an evolving client base. Edward Jones is also incorporating more technology into its offices to help its advisors work more efficiently, Chubak explained.
“Client needs are shifting, and the industry is moving more toward an advice model from a portfolio management model,” he said. Technology can do a lot of portfolio analytics and rebalancing at a faster velocity, he said.
Managed Accounts
The firm has also introduced a Financial Advisor Managed Solutions product. This is a managed account program that allows clients to grant their advisor investment discretion, and that advisor will continue to provide ongoing investment advice and guidance.
“The discretionary investment and trading authority you give us includes the authority for your financial advisor and other Edward Jones personnel to manage your assets on a discretionary basis by buying and selling investments for your account whenever your financial advisor or other Edward Jones personnel deem appropriate and without your approval of each transaction,” the firm said in an SEC filing.