Jonathan A Rivard, financial advisor at Edward Jones, stands outside the company's downtown Toronto offices on Aug. 23.Christopher Katsarov/The Globe and Mail
Largely recognized for its suburban banner ads and strip mall locations, independent wealth manager Edward Jones Canada has been slowly pivoting its business to bring multi-adviser teams into downtown office buildings – a move that has nearly doubled its assets in the past five years.
For the privately owned subsidiary of U.S. investment giant Edward D. Jones & Co., the shift in business strategy is a huge leap from the traditional one-person adviser storefront office that can be found in hundreds of strip malls across Canada. The Canadian headquarters are in Mississauga, more than 30 kilometres west of Toronto’s downtown core.
But in 2018, Edward Jones Canada’s chief executive, David Gunn, opened the first multi-adviser branch office in Toronto’s financial core. Located on the ninth floor of the Adelaide Place – a 20-storey building at 150 York Street – the office is set up to house six securities-licensed advisers, as well as three assistants and additional support staff.
Today, the Canadian arm of Edward Jones has almost doubled its assets, with 841 advisers who manage more than $52-billion, as of July 28. That is up from the 783 advisers managing $30-billion in assets in 2018. Mr. Gunn says the company is on track to hit an annual objective of adding $7-billion in assets from both new and existing clients.
The growth in overall assets has propelled Edward Jones into one of the top ten independent wealth managers in the country by assets – bigger than publicly traded Richardson Wealth and Canaccord Genuity that manage about $35-billion and $38-billion in Canada.
“We win about $2.50 for every dollar that we lose – which means we are consistently taking clients away from both the big banks and independents,” Mr. Gunn said in an interview.
The shift to downtown office towers is a bold move for an investment firm that has dominated kitchen-table conversations with clients since it first entered Canada in 1994. Similar to its parent company, which manages about US$1.7-trillion in assets, the brand is well-recognized as helping service small rural communities. In the past, company leaders have veered away from head offices on Wall Street.
However, in both the U.S. and Canada, the benefit of the storefront advertising has “lessened” over time, Mr. Gunn said.
“That’s one of the big reasons we’re making this move to not just open multi-adviser branches but also to move into high-rise office towers.”
As a privately-owned company, Edward Jones has flown under the radar as a growing force in wealth management. Along with recruiting advisers from competitors, the company has begun to tap into the firm’s existing assistants and associates who support adviser teams to offer those who are interested to become licensed.
Unlike some of its competitors – which predominately focus on ultra-high net worth clients – Edward Jones mainly targets clients with investable assets between $250,000 to $2-million, a cohort who Mr. Gunn says is “highly underserved.”
He is also focused on the amount of wealth that will be landing in the hands of women. Today, women control 35 per cent of financial wealth, yet represent just more than 17 per cent of full-service brokerage advisers – a slight increase from a little more than 16 per cent in 2016, according to data from Toronto-based Investor Economics, a unit of ISS Market Intelligence.
Currently, 23 per cent of advisers at Edward Jones are female, which Mr. Gunn expects to grow to 26 per cent by the end of 2026: “Women, now more than ever, can really have an advantage in the business,” he said.
Part of that growth, Mr. Gunn added, will come from female advisers who may prefer to work in a team environment as opposed to starting out on their own.
Jonathan Rivard was one of the first Edward Jones employees in Canada to join a multi-adviser team. Twenty years ago, he began to build his practice at the firm by knocking on doors in the suburb of Richmond Hill, Ont. Now, working in downtown Toronto, he manages about $300-million of client assets, largely focused on Ontario’s farming community. But the other part of his business has come from clients working on Bay Street.
“We didn’t have a presence in the financial district, and we needed to have a footprint here for clients,” Mr. Rivard said in an interview. “The other draw was to build a footprint for recruitment. The largest community of financial services talent outside of Manhattan is right here in Toronto.
“From a competitive acquisition perspective, there’s a ton of talent down here and in order for us to continue to grow, it’s nice to have a presence in Canada’s financial district.”
Mr. Rivard still meets clients across their tables – as well as in their barns – on a weekly basis. But four days a week he commutes to the downtown core and sits with clients face to face in his office.
While many wealth managers have run similar team business models for decades, soaring real-estate costs and adviser demand for collaboration are what drove Edward Jones to make the switch. The company is also in the process of reducing its head office real estate by 50 per cent, from 80,000 square feet to 40,000 square feet, as more individuals chose to work hybrid.
Mr. Gunn has opened four more multi-adviser offices – including locations in Vancouver and Calgary – and another 80 offices across the country have been converted to house two advisers in each. While rare, he says, a small number of “unfavourable” locations have closed.
“We certainly aren’t shuttering our storefronts, but rather repurposing some of them as the square footage can easily accommodate a second office,” Mr. Gunn said. ”This approach gives us an opportunity to invest differently. Over the next three years, we’ll invest close to $200-million in Canada alone on technology upgrades.”
He doesn’t have a set goal on the number of single offices that will be converted over time. Rather, he says, the firm is assessing each market, and if a group of advisers want to share real estate, the offices will be re-tooled.