Edward Jones saw solid growth in both its wealth management business and its bottom line last year, the firm has reported. But some experts say the numbers don’t tell the whole story.
The St. Louis-based financial giant has not yet released its fourth quarter earnings. But an SEC filing it made last week offers an early glimpse at its overall numbers for 2023, which were impressive: The firm finished the year with 19,232 financial advisors, 2% more than it had in 2022. Client assets were up 17%, reaching $1.92 trillion. And net income was up 15%, totalling $1.61 billion.
In general, Edward Jones and its parent company, the Jones Financial Companies, said they were “pleased” with the results. In a statement attached to the filing, the companies — collectively called “the Partnership” — said they had made “significant progress” toward three important goals: better tools and tech for branch teams, a higher advisor headcount and stronger relationships with clients.
“Throughout 2023, the Partnership focused on its intentional investments in human capital, technology infrastructure and digital initiatives to support its objective of delivering more comprehensive planning and advice for clients,” the firm said.
On the surface, the figures seem to indicate an impressive comeback for Edward Jones, which had been rapidly losing both profits and advisors in recent years. In 2021, the firm — which operates in both the U.S. and Canada — suffered a net loss in its U.S. advisor headcount for the first time in a decade.
But even as that headcount rises back up, some analysts say there’s more trouble at Edward Jones than meets the eye.
“I think what’s happening with a lot of firms is that they’re losing seasoned advisors and replacing them with junior, trainee-caliber advisors,” said Jason Diamond, a vice president at the financial advisor recruiting firm Diamond Consultants. “When we speak to Jones advisors, none of them are optimistic about the firm’s recruiting efforts. All of them see their colleagues — who are some of the top advisors at the firm — leaving, and they don’t see quality advisors coming back in the door.”
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On the other hand, Diamond said the latest SEC filing does show a certain kind of progress.
“I think it’s still a net good thing to show a gain in headcount and a gain in client assets, as opposed to the alternative,” he said. “I just think that these numbers kind of hide the difficult truths.”
Financial Planning has reached out to Edward Jones for comment, but had not heard back by the time this article was published.
For a closer look at how Edward Jones performed in 2023, scroll through the cardshow below. To see the firm’s earnings in last year’s third quarter, when its profits and advisors increased, click here. And to look back on how differently the firm was doing little more than a year ago, click here.