- Title: Managing Partner
- Time in Current Position: 8 years
- Time with Firm: 37 years
- Previous Employer/Title: Edward Jones
- Years in the Industry: 37
- First Job in Industry: Part-time Research intern
- Alma Mater: BA, DePauw University; MBA, Washington University in St. Louis; University of Pennsylvania Wharton school's Securities Institute
What's your future vision for Edward Jones?
Jim Weddle: Twenty thousand advisors with a trillion dollars in assets under care. We don't say assets under management. We say assets under care because they're not ours. That's what we're going to look like.
What is the current state of wealth management?
JW: There are some interesting trends. You're seeing the growing sophistication in terms of tools that the online providers, like Schwab and Fidelity, are offering. You see Schwab trying to get into our space. Instead of "Talk to Chuck," now it's "Call one of our financial advisors." They've got an 800 number and it's not very personal, but they're trying to provide some guidance, which is what individual investors tell us they need and value. There will always be the do-it-yourselfers, and that's fine. That's not our targeted clientele. I see a very bright future for us. The demographics are just amazingly positive. You've got the baby boomers. I am one. I'm not going to retire anytime soon, but I can see it from here. I'll be 60 this month, and people start saving in a very serious, focused kind of a way. They realize we've got a limited amount of time. In many cases they're reaching for a financial advisor with some expertise to help them accomplish what needs to be done before they retire. And that opportunity is just huge. In addition, baby boomers will eventually transition all that wealth, trillions of dollars of wealth, to their children, and there's a huge opportunity for us there as well.
Do you think the fiduciary standard debate is going to reduce clients' interest in engaging advisors in relationships with transaction-based revenue? Many people don't realize their advisor isn't currently held to a fiduciary standard.
JW: We would love to see the recommendation made by Barney Frank become reality-a combined standard regardless of whether the dollars are in an investment account or a retirement account. Most important, there are two things we hope will happen. One, that our clients continue to have full access to all the products and solutions that we provide with disclosure of any conflicts of interest-and there will always be conflicts of interest. Second, that clients retain the choice of paying either by transaction or a fee. Depending upon how the rules are written, investor choice could be adversely impacted. For long-term, serious individual investors like those at Edward Jones, transaction pricing might be cheaper than fee-based pricing. Our investors don't trade. They invest. Our advice is normally to stay put. A fee in lieu of commission is not offered in that case because with a long-term, quality-oriented investment philosophy, a fee would cost our clients more than a transaction-based model. We would make more money, but it wouldn't be the right thing for the client.
But with your goal of increasing your total advisor count to 20,000, that fee strategy might not be attractive to advisors.
JW: I disagree, but we're also not here to annualize the income of our financial advisors or to annualize the revenue to the firm. I don't have an outside board of directors that I have to answer to, and I'm not concerned about shareholder value. We don't have shares. We're a partnership. That allows us to take a long-term view on the decisions we make. I think it serves our clients and our associates very well.
How is Edward Jones dealing with the aging of its advisor population and recruiting?
JW: We recruit career changers. Somebody who's been out of college for 10 to 15 years. They've done something elseteacher, lawyer, counselor, accountantand they did it well. But they're looking for a better career opportunity, and they're interested in being in our business. Bringing people into the firm who are in their late 30s keeps the average age down a bit. If you're not training and bringing in younger folks, you're getting old in a hurry. And in October we [rolled] out a new approach to advisor retirement. It encourages our financial advisors to anticipate when they would like to retire, and it encourages them to give away their inactive accounts and the accounts they're not spending that much time on to someone who can give them more attention. You bring a new advisor into your branch. You share responsibility with them for a small percentage of your accounts. They're mentored, they get up to speed and they have the opportunity to spin out to their own branch. Do that in anticipation of retiring and you're going to be financially recognized. We keep the retiring advisor on salary for a few years, and most of our folks are owners in the firm, so you can keep your capital in retirement.
You came up in Edward Jones as an advisor. What was your favorite part of that job?
JW: My favorite part about being a financial advisor was not creating clients. That was a lot of hard work, and you received a lot of rejection over time. But it was great actually seeing people accomplish what they had originally set out to do. You established a college savings account for a young person, and then you actually saw them go to college. And you said, "I helped them do that." You worked with people who were just a few years from retirement, and maybe via the work that you were able to do, they were able to retire a year or two earlier. I mean, that's success. That was so much fun. When I became managing partner, I got several emails from former clients of mineand you have to understand, this was like 30 years priorsaying, "Well, congratulations. Looks like you're doing well. We are still living in Florida, receiving the dividend checks" or "still cashing the interest that's coming from the bonds that you helped us to buy." I mean, you just can't help but smile when you get that kind of feedback because you're helping people to live a little better life.
- Number of employee channel advisors: 12,333
- Total aum: $728 billion
- Average employee advisor 12-month trailing Production: $344,194
- Average employee advisor aum: $59 million
- % Women advisors (Not including registered associates): 18.4%
- % minority advisors: 5.7%