Edward Jones ramps up

It may not be a boom time for sales but it’s a boom time for financial advice, according to Edward Jones Canada. The subsidiary of the American-based financial advice giant is looking to add nearly 500 staff — including 250 advisors — to its roster in the greater Toronto area alone.

Gary Reamey, the principal responsible for overseeing Edward Jones Canadian division, says his firm is seeing a substantial increase in client growth, necessitating an aggressive expansion in Southern Ontario. The firm is looking to expand it’s presence by almost 200% over the next five years.

While assets under management are down for many advisors, there is no shortage of clients looking for advice. According to Reamey, the market downturn which devastated the personal finances of many Canadians has motivated investors to look for professional financial advice.

“In every market we are in, we are either doing more business with existing clients or acquiring more clients. If I looked today, the number of client accounts is up 13% from this time a year ago,” Reamey says. “There are more investors now looking for second opinions and investment advice than I’ve seen in my 32 years in the investment business.”

Reamey says his firm is targeting to have 1,100 advisors in Canada within five years. It’s looking to grow its current advisor base of 630 to 700 by the end of this year.

The population density of southern Ontario’s golden horseshoe, which encompasses about five million people, makes it prime territory for the company to grow. Reamey says 158 branches will be in place in the region by the end of this year, and he hopes to grow that to 380 within five years.

This likely means increased competition for existing advisors in the region. Edward Jones is an aggressive recruiter of people new to the advisory business. Reamey says 85% of its new recruits will come from outside the financial services business, with only 15% having previous financial advice experience.

Edward Jones is one of only a handful of independent advisory firms that offers both a first-year salary and paid training that can last up to 18 months. Advisors come out of that training as an IIROC registrant with a securities license and a license to sell insurance. The firm is a major source of much needed and capable new blood to the industry.

Scott Harrigan, department leader for “location rich markets” for Edward Jones, wouldn’t speculate on what the attrition rate is for advisors, but he did point out that the difficult job market makes it a little easier to find quality talent.

“The market conditions out there are certainly providing an opportunity [for recruiting]. If you’re working with the investor, goals like retirement planning, estate planning and saving for children’s education; whether its good markets or bad markets, those goals remain the same,” he says. “Now more than ever, people are in need of that expertise, that guidance. What were looking for are great people to provide that service.”

Those that do stay at the firm tend to like it. The company is consistently ranked amongst the “50 Best Employers” by the Globe and Mail’s Report on Business magazine and Montreal’s La Presse, taking the number four spot this year. The firm is employee owned, with roughly 12,000 of the firm’s 40,000 advisors globally, owning an equity stake. In Canada, Reamey says one of three advisors is considered a partner.

Once established Edward Jones advisors provide investment advice philosophy that centres around long-term, buy-and-hold investment strategies geared towards conservative investors.

Reamey suggested its advisors are going to target pretty much anyone with disposable income, but he thinks his advisors will have the most resonance with investors he classifies as underserved. It’s a market where everyone is a competitor.

“Underserved means individuals who have serious money to invest and feel like they are not getting the service they want,” he says. “The reality is, if clients have disposable income, even the Lexus dealership is a competitor.”

(05/12/09)