Edward Jones profits fall sharply but firm loses fewer financial advisors (2024)

A year after Edward Jones suffered its first loss in U.S. financial advisor headcount in a decade, the firm's attrition rate is tapering off and it's deploying an ambitious hiring plan.

But the St. Louis-based company, one of the largest wealth management firms in the industry, said in its 2022 annual report that depressed stock and bond values last year slashed the firm's profits by double digits, in turn extracting a toll on the compensation of top executive Penny Pennington. The firm also disclosed a regulatory investigation into electronic communications with clients among financial advisors and employees.

For the most interesting takeaways from Edward Jones' annual report, filed March 10, scroll down the slideshow. To view coverage of Edward Jones' results in the third quarter, click here. For a look at where the company stood after the first half of the year, follow this link.

See Also

The Top 10 Financial Advisors in the U.S. (2023) | SmartAsset.comThe Fiduciary Rule - A Wolf In Sheep's ClothingHow to Know if your Financial Adviser is a Fiduciary - Find a Fiduciary Financial Advisor Near You - Modera Wealth Management401(k) Fee Study: How Much Does a Fiduciary-Grade Advisor Cost?

Fintech

See Also

Read 0 SmartAsset Reviews (2023)

AssetMark posts record net income, passes 9,200 advisors

March 2, 2023 11:27 AM

Note: All figures refer when possible to the company's U.S. business rather than its combined results including those in Canada, where it had 835 advisors at the end of 2022. The company breaks out most, but not all, of its results between the two countries.

As an industry expert with a deep understanding of wealth management and financial services, I bring a wealth of knowledge to the discussion on Edward Jones, a significant player in the field. My expertise is grounded in a comprehensive understanding of market dynamics, financial trends, and the regulatory landscape that governs firms like Edward Jones.

The article highlights Edward Jones' journey a year after experiencing its first decline in U.S. financial advisor headcount in a decade. To substantiate my insights, let's delve into key concepts:

1. Financial Advisor Headcount:

   • The article mentions that Edward Jones suffered its first loss in financial advisor headcount. Financial advisor headcount is a crucial metric in the wealth management industry, representing the number of financial professionals employed by the firm. A decline may indicate various factors, such as market challenges, changes in strategy, or shifts in the workforce.

2. Attrition Rate and Hiring Plan:

   • Edward Jones is now experiencing a tapering off of its attrition rate and has deployed an ambitious hiring plan. The attrition rate is the rate at which employees, in this case, financial advisors, leave the company. A decline in attrition and an ambitious hiring plan signal efforts to stabilize and grow the workforce.

3. Financial Performance:

   • The article notes that the firm's profits were slashed by double digits due to depressed stock and bond values. Understanding the impact of market fluctuations on a wealth management firm's profitability is crucial. Profits are directly linked to the performance of the assets under management (AUM) and market conditions.

4. Executive Compensation:

   • The compensation of top executive Penny Pennington was affected by the decline in the firm's profits. Executive compensation is a reflection of a company's financial health and performance. When profits decrease, it can lead to adjustments in executive compensation to align with the company's financial situation.

5. Regulatory Investigation:

   • Edward Jones disclosed a regulatory investigation into electronic communications with clients among financial advisors and employees. Regulatory scrutiny in the financial industry is common and can arise from various reasons, including compliance with communication standards, client protection, and adherence to industry regulations.

6. Geographical Breakdown:

   • The article mentions that the figures primarily refer to the company's U.S. business rather than its combined results with Canada. Geographical breakdowns are essential for understanding the regional performance of financial firms and the impact of different market conditions.

In conclusion, my expertise allows me to dissect the nuances of Edward Jones' situation, considering factors such as financial performance, regulatory challenges, workforce dynamics, and the broader wealth management landscape. This analysis provides a comprehensive understanding of the firm's current position and the strategies it is employing to navigate challenges in the market.