Edward Jones uses recruitment for growth, says managing partner James Weddle. Weddle, in an interview for On Wall Street's annual special report, State of Wealth Management, describes how his firm approaches both college students and military personnel with opportunities to work in the employee advisory channel. He calls it an organic approach to growth, which avoids mergers and acquisitions.
How do you bring new people into the advisor industry?
Were going to be working with several universities so that their students, as part of their coursework, study the material required for them to pass the Series 7 exam. That could potentially lead to an interview with us, or better yet, a career down the road. We also have an initiative that kicked off two or three years ago with the military, where we are in contact with some terrific, quality individuals who have generally been with the military for five to 10, sometimes 20, years. Mostly, they are well-educated, extremely disciplined and used to working hard, love being part of an organization with values and a culture, and can often be a great fit.
Is this an example, then, of Edward Jones trying to find candidates in places where other firms arent looking?
Weve always chosen to grow, as we call it, organically. We havent merged, we havent acquired, and were not about to. Were very protective of our values and the culture of our firm, and one way we preserve it is by offering our opportunity to folks who are extremely talented and where theres a great fit as well. Were looking for career changers, and, of course, leaving the military is a career change. But were going out and looking primarily for people who are currently successful, have college degrees and have a real sincere interest in being in our business. Weve got a terrific, very thorough career-long training program, and being a partnership, we can afford to take the time to train them correctly, and to be patient for them to eventually build a business and become successful.
Are such recruitment efforts helping Edward Jones grow in urban markets, as opposed to suburban and rural markets?
I need to point out that 75 to 80% of our locations today are in major metropolitan markets not necessarily right downtown, but in the suburbs and typically where the people live, not where they work. We are growing right now and piloting branches in more downtown locations its very early on that, but we are doing so.
Career changers are where you find them. To grow in Boston, we need to interview people currently in Boston, who love the area and often already have homes there.
Every firm has its measurement and strategy for success and growth, so is moving into these richer metropolitan markets a strategy to capture clients who traditionally havent been with Edward Jones?
A couple of thoughts come to mind, and Ill be a bit skeptical of our competitors. They have growth strategies, but that exists primarily as one competitor trying to steal a financial advisor from another, and at the end of the day its a zero sum game. We are recruiting career changers, terrific people who have a desire to be in the business, and who we can train and support and help become successful. More of them in the future will be in the metropolitan market, whether in the suburbs or downtown.
Do you think the challenges your competitors face are different from those Edward Jones faces?
No, I think the challenge is still to deliver value to the individual investor, to demonstrate to them day in and day out that they are benefiting from the expertise, the service, the support, the discipline we can bring to their saving and investing.
Is there a need to be mindful of expansion in financial terms versus delivering on growth goals? Are you comfortable with the equation right now, or is more fine-tuning needed?
Im very comfortable with the situation right now, but let me point out a difference between others and us. Im not building shareholder value here. Were building value for the individual investor. Were a private firm, were a partnership. The men and women who do the work here own the place. So were responsible to our clients but were accountable to ourselves, not to outside shareholders, and that is a major strategic advantage.
Im not dissing public companies; we help people invest in great public companies every day. I just dont want to be one.
The industry consensus is that the new client is not only tech-savvy, but more skeptical of advice. What has your team learned that will help advisors get past that skepticism?
I dont know if I can give you the recipe to the secret sauce. But we have done an awful lot of research, and we have verified that even though there are do-it-yourselfers in the millennials, there have always been do-it-yourselfers in the greatest generation or the baby boomers. Those are not our clients.
Everybody has greater access today via the Internet, to all sorts of information and investment tools. But having access to that information doesnt necessarily make you an informed investor or a do-it-yourselfer.
Youve got information right now on the Web on how to write your will and how to diagnose your health. But people are still working with attorneys and they are still working with doctors. And they will continue to work with financial advisors as well, as long as we have their best financial interests at heart.
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