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Raymond James, Edward Jones escalate virus response, brace for long-term impact

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It’s no longer business as usual.

In the face of the coronavirus pandemic, Raymond James called off an advisor conference scheduled for next month. Edward Jones is suspending business travel through May. And JPMorgan is staggering advisor shifts to avoid full offices.

These are just some of the strict measures firms are taking to protect staff and clients in the face of a fast-moving viral outbreak that is threatening employees' health — as well as corporate revenues.

To combat U.S. outbreak of the coronavirus, firms are examining and revising policies on travel, conferences, meetings and office hours.

In addition to suspending tavel, Edward Jones is encouraging its 18,000 advisors to consider virtual meetings with clients, according to a spokesman.

JPMorgan is also restricting travel and seeking to avoid offices full of employees. After an employee tested positive for the virus, Morgan Stanley is deep cleaning its office in Purchase, New York.

Medical personnel collect a sample from a patient at a drive-thru COVID-19 testing clinic at a Kaiser Permanente facility in San Francisco, California, on March 12, 2020.

The effects of these and other actions will likely ripple across wealth management. If advisors from the largest firms stay home well into May, key industry conferences that do go forward as planned could be hard pressed to find attendees.

FPA, NAPFA and IWI put on springtime conferences typically attended by hundreds, if not thousands of advisors who come from across the country to learn, network and get CE credits. LPL Financial and Hightower cancelled smaller corporate events earlier this month. JPMorgan and Edward Jones said they were cancelling large events and moving to virtual meetings where possible.

For its part, Raymond James told advisors it was calling off its Elevate conference that was set to take place in Orlando April 20-23. The event is typically attended by many of the firm’s more than 4,700 advisors who come to meet with senior leaders and get updates on technology and other business practices.

The rationale for such steps becomes more pronounced every day. Lincoln Financial Network, an independent broker-dealer with more than 8,600advisors, held an event at the end of February at the Gaylord National Harbor Resort and Conference Center in National Harbor, Maryland. An attendee at another conference held at the same location tested positive for the coronavirus. Lincoln has required all attendees to work from home for the next 14 days.

“We take the health of our employees and workplace safety very seriously,” a spokesman said in an email, adding that the firm has placed restrictions on travel.

While industry associations and firms may have to shutter conferences, wealth management firms may also take a hit to revenue.

Earlier this month, Edward Jones warned in an SEC filing that the spreading virus was undermining the global economy and sparking market volatility. The firm "cannot reliably predict the ultimate impact on financial markets and the partnership’s business operations and financial results."

Likewise, Oppenheimer & Co., a brokerage with about 1,000 advisors, said in an SEC filing that contagious outbreaks "could impair our ability to manage our businesses and could limit our revenue due to client’s lowering their level of activity or due to a sell-off in markets that would limit our anticipated revenue that is based on managed assets."

The outbreak is unfolding just as banks, brokerages and private equity firms have been making big wealth management plays, building corporate strategies around steady fee-based revenues that now look less steady. On March 12, U.S. stocks had their worst one-day drop since Black Monday in 1987.

The world’s 500 richest people collectively lost $331 billion on Thursday, according to Bloomberg News. It was the biggest one-day drop in the eight-year history of the Bloomberg Billionaires Index. The billionaire group’s year-to-date losses currently total $950 billion.

Efforts to combat the virus may further complicate wealth management operations.

RBC has asked some staff to self-quarantine after an employee in Manhattan became infected. Wells Fargo took similar action for an office in San Francisco. And even the SEC requested D.C.-based staff to work from home for similar reasons.

In each case, it was a matter of a single employee in a single office. What will firms and regulators do should multiple offices become infected?

Advisors and clients may also become ensnared in larger quarantines. New York authorities imposed a containment zone on New Rochelle, which has had a slew of cases reported this month, and Gov. Andrew Cuomo announced a ban on gatherings of 500 or more. Other states and cities are enacting similar measures.

Financial advisor Liz Landau, who is based near New Rochelle in White Plains, says she’s seen people in her area react in a variety of ways to the spreading pandemic. "There are people wavering between trying to act normally and total and utter hysteria," she told Financial Planning Wednesday afternoon.

--With additional reporting by Tobias Salinger and Jessica Mathews.

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