Death, taxes, and Edward Jones in first spot: includes chart

Jones scored high marks for front- and back-office technology (8.4 and 7.8, respectively), which is not surprising given the firm’s commitment to keeping up to date. Head of Canadian operations Gary Reamey estimates the firm will spend about $50 million on information technology and infrastructure across the global network in the next year. “There’s not a week that goes by that things don’t change from a technology standpoint,” he says.

Perhaps a little bewildering is the fact that Jones reps still don’t have traditional e-mail capabilities, a common grievance among advisors this year and last. Although reps can communicate with each other within the company via e-mail, sending messages outside — clients included — is impossible.
The firm operates through a satellite communication system, through which everything from television training to news feeds is transmitted. Bandwidth limitations prevent e-mail communication from outside the internal network, but Reamey is confident the company will make the switch to another land-line source in the future.

In the meantime, clients can communicate with their advisors through a contact page on the Internet. Each Jones advisor has a personalized Web spot outlining information he or she feels is relevant to clients. Despite the personalized technology, advisors still rated “Web for clients” a 5.7, more than one full point below the average rating in this year’s report card.

Although Reamey knows Jones’ reps would like to see some changes on the technology front — namely, online account statements and online bill payment — he’s not making any promises. “With the downturn in the market, we’ve had to make some decisions as to which projects we want to go forward with and which we don’t,” he says. “Online account statements and bill payment are two things we want to do, but they’re not going to happen this year.”

The downturn hasn’t been all bad news. Jones has seen a 23% jump in assets under management over the past 12 months, and the number of clients has increased by 26%, Reamey says. Hiring new staff is also on the rise. The sales force has grown 10% since last year, and about 30 new brokers are being added each month. Even services that tend to go by the wayside in bear markets, such as advertising and sales support, have increased.

Reamey credits the firm’s safe business model for its impressive growth. “We serve conservative individual investors exclusively. To serve that customer, we make trade-offs,” he says, such as steering clear of risky investments such as labour-sponsored tax shelters, penny stocks and options. “Our investment reps know that they’re not in business to take every order.”

The trade-offs may be a bit of a sticking point for some Jones advisors, many of whom cite the firm’s limited product selection as one of their biggest complaints. Says one West Coast advisor: “It’s too easy for clients to go to another broker across the street and buy penny stocks.” Others agree. “Senior management is made up of veteran American brokers who preach the Jones bible instead of being business visionaries,” complains another Western rep.

Isolation in one-rep offices isn’t making things any easier. “It can get lonely out here,” says a broker in southern Ontario. “It’s just me and my assistant.”

Reamey realizes that loneliness is a common complaint among Jones brokers, who, for the most part, are confined to small offices in Main Street, Canada, locations.
“It’s something you hear more during the tough markets than in the good ones,” he explains, citing his own experience as a broker. To ward off feelings of isolation, each Jones advisor is assigned a mentor who contacts them on the phone or in person about once a week. Reps are also encouraged to attend regional meetings three times a year.