Edward Jones aims to have 600 offices in the UK by the end of 2011 by recruiting people who want to be both a financial adviser and a stockbroker with control over their own office.
Tony Morris, market development specialist at Edward Jones, believes the firm’s “unique” proposition appeals to IFAs who want to offer a fuller service to their clients by giving whole-of-market financial advice as well as a stockbroking service, without the hassle of spending time on administrative matters.
People recruited by the firm are trained to become investment representatives (IRs) with their own office and a full-time administrator, all of which is paid for by Edward Jones.
Morris states: “Customers will only speak to the IR or the IR’s assistant so they will get to know them personally. We ensure IRs spend as much time as possible face-to-face with their customers. If the work doesn’t require a licence the administrator will do it, thus freeing up the IR’s time.”
Before joining Edward Jones, applicants are put through a rigorous pre-screening and interview procedure, which is designed to find people who are a “suitable fit”. This includes several interviews, background checks and personality tests to see how the adviser handles their clients’ needs.
If successful, IRs are given initial training for 11 weeks to study for the stockbroking exams, learn how Edward Jones’ systems work, and learn how to talk to existing and prospective customers about their new role.
IRs are paid a salary throughout the training period which is equivalent to what they were making as an IFA, and this reduces over time until it is completely replaced by commissions and milestone bonuses.
One obligation is IRs have to hold a minimum of four seminars a year, free of charge, which educate consumers about financial matters, such as estate planning and school fees planning.
Edward Jones provides ongoing training and mentoring, a helpline called ‘branch services’, and support for compliance, marketing and product research.
Morris states: “We only have one profit centre, which is our IRs. Everyone’s role here is to ensure the IR spends as much time as possible with their customers. It is as close as you can get to being in business for yourself but not by yourself.”
He adds the service is not suitable for everyone because people have to be able to manage themselves – they are not given any sales targets and it is a case of “the harder you work the more rewards you will get”.
Morris is keen to stress the firm’s “old-fashioned” values, which focus on face-to-face contact with clients and establishing a community for advisers. There are currently 200 IRs in the UK and Morris expects 315 by the end of 2007 and plans for 600 by the end of 2011.
Edward Jones recently announced it is restructuring its UK operation with the creation of five new regions, each with its own regional leader who will be responsible for guiding branches and the overall development of the firm in their geographical area.
The regions are Scotland and Northern Ireland, the North, Midlands and North London, and East Anglia and the South.
David Gwilliam, a former IFA who trained to become an IR, believes advisers who are not also stockbrokers are restricted in what they can offer their clients and the ability to directly invest “cuts out one of the middle-men”.
He was attracted by the chance to manage his own business and create his own business opportunities, rather than having them fed to him through a large IFA firm.
Going forward, Gwilliam predicts 50% of his business will be focused on helping clients understand self-invested personal pensions (Sipps) because, being a stockbroker, he is able to make full use of all the product’s investment options.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7968 4554 or email [email protected].IFAonline
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