While the firm continues to add new advisors to its ranks, it’s still struggling to keep pace in the so-called recruiting wars. And even current Jones advisors are wondering why.
Why do some firms enjoy tremendous success in retaining and recruiting advisors while others struggle to keep and attract advisor talent? The answer may be largely qualitative and subjective. Things like culture, ease of doing business, perceived economics, and firm leadership all play an important role.
But measuring which firms have been successful in recruiting and retaining talent is quantitative and objective. And through that lens, it’s clear that while Edward Jones continues to add new advisors to its ranks, it’s still struggling to keep pace in the so-called recruiting wars (the firm lost a net 181 experienced advisors in 2022).
It’s numbers like this that leave many to wonder what’s motivating some advisors to join the firm while driving others to leave.
What drives advisor movement?
Financial advisor movement seems to work in waves, with a triggering event setting off heightened levels of attrition. For example, following the 2016 “cross-selling scandal,” Wells Fargo advisors moved with near record velocity. Similarly, after a brief honeymoon period with Bank of America in which the legacy Merrill culture remained intact, many Merrill advisors left the Thundering Herd in the late 2010s and early 2020s as the “bankification” of the firm became more and more evident. And the most recent wave, as movement data proves, is among Edward Jones advisors, many of whom were “lifers” prior to making a change.
In recent years, our firm has had the privilege of counseling Jones advisors nationwide (many of whom were level 9 and above producers). From this unique vantage point, here is our analysis:
First and foremost, we must acknowledge the role that momentum plays in advisor recruiting. Firms either seem to be aggressively adding headcount or aggressively losing it, with movement begetting more movement. And momentum is certainly one part of the equation: When advisors see their peers leaving a firm, it prompts them to ask the tough questions and perhaps consider a change as well. In the case of Edward Jones, accelerated departures beginning in 2021 and into the first half of 2022 were met with the super-sonic boom of top advisor Jennifer Marcontell decamping for independence with Ameriprise. While most advisors did not know Ms. Marcontell personally, witnessing the largest and most connected advisor leave caused many to take notice and rethink their standing within the firm.
But it would be misleading to say that momentum is the primary driver of movement away from Jones. After all, Jones advisors are a savvy bunch and few if any would move solely because their friend or colleague did.
Importantly, we need to consider where these advisors are moving to. As our 2022 “Advisor Transition Report” noted, of the 371 experienced advisors (those with LOS < 3 years) who left Jones in 2022, 237 of them (more than 63%) went independent in some capacity. And 2022 was no outlier: Anecdotally, we see this percentage actually trending higher in 2023.
The fact that so many former Jones advisors have decamped for independence is clear evidence that these advisors are feeling constrained and limited—a noted departure from the entrepreneurial culture they once enjoyed. As one ex-Jones advisor who went independent put it, “The breakdown in culture at the firm has led to Edward Jones advisors to going independent and creating the culture that they miss. There is a whole network of former Edward Jones advisors who help and support each other in a way that feels like the Jones of old.”
It often comes down to culture
“The Jones of old” is a refrain we hear in conversations with almost every single Jones advisor we are lucky enough to speak with, and it’s clear that culture is what these advisors are referring to. For example, advisors were accustomed to a “yes-centric” management team that operated through a business-friendly and common-sense lens. Increasingly, however, the firm is taking a compliance-first approach that is making even simple business challenging to complete.
There are 2 other areas that Edward Jones advisors perceive as negatives relative to other firms on the street: 1.) General inflexibility around running and operating their business, including teaming, office-sharing, and sunsetting (“goodnighting”) of accounts; and 2.) weaknesses in the technology and investment platform.
Interestingly, the firm is clearly well aware of both shortcomings. In recent months, they have greatly expanded access to teaming and office-sharing, increased discretionary trading capabilities, and budgeted countless millions of dollars for technology improvements. For some, these changes will be more than enough. The firm is, after all, listening to advisor sentiment and trying to adapt. For others, it will be too little, too late.
Excitingly, as the quantity and velocity of movement prove, Jones advisors are not stuck. Firms continue to aggressively recruit Jones advisors, proving that most who moved have not been hit with legal recourse—including the dreaded temporary restraining order (TRO). And importantly, even those who go independent can take comfort in the fact that they are not alone: There is a whole network of ex-Jones advisors (even across different firms) who collaborate, share ideas, support each other, and foster the beloved culture that they miss so dearly.
Despite this recent wave of movement from Edward Jones, the vast majority of advisors will stay put and lean into the upcoming enhancements the firm is making. Edward Jones continues to “home grow” talent better than most any firm and, from our experience, its advisors grow faster than industry averages. Time will tell if these last few years of attrition are simply a blip on the radar screen or the new normal for the venerable firm.