Edward Jones Boosts Broker Count, But Commissions Plummet
Edward Jones added more than 400 brokers to its network of more than 12,900 mostly single-advisor offices last year but suffered a 1% drop in revenue as commission trading tanked.
The St. Louis-based broker to the masses said in a regulatory filing on Thursday that its 2016 net income fell 11% to $746 million from $838 million in 2015. Jones paid $51.2 million of that profit earlier this week to its approximately 400 current and retiring general partners, according to the filing.
Jones ended 2016 with 14,919 advisors, a 3% rise from a year earlier. That keeps it neck-to-neck in brokerage force strength with industry leaders Morgan Stanley and Wells Fargo Advisors, which generally employ more experienced brokers.
The firm, which opened its annual general partners meeting today, has a goal of employing 20,000 brokers by the beginning of 2022, its managing partner Jim Weddle told k-tcc last April. It ended 2016 with 12,928 branches.
Although client assets under management or administration rose 10% to $963 billion as of yearend 2016, the $6.56 billion of fees and commissions that Jones brokers produced was off 1% from 2015. Commissions fell $400 million to $1.98 billion due to “market uncertainties and industry changes as well as continued client investment in fee-based programs,” according to the filing.
Jones, which focuses most of its sales efforts on mutual funds, launched two new fee-based advisory programs last year, helping fee income rise 8%, or $335 million, to $4.42 billion, according to the filing.
Jones historically books more than 20% of its revenue from sales of Capital Group’s American Funds, but since 2013 has also been promoting in-house Bridge Builder funds offered only through fee-based programs that generally charge 1.35% to 1.5% of assets plus administrative fees.