Since January 2006, when Jim Weddle first took over the managing partner position at Edward Jones, he has kept a keen focus on growing the investment firm to new heights. In 2007 he and his team laid out a five-year plan that they updated in 2010, but that was a mere steppingstone to the vision the firm rolled out last year.
In January 2012, Weddle unleashed what Edward Jones is calling its Vision for 2020. Focusing on growing the firm in three key areas — financial advisers, assets under care and households deeply served — Weddle’s vision won’t just have Edward Jones reaching new heights, it might just be soaring.
“Today, in a lot of markets, we are not the top-of-mind choice,” Weddle says. “We don’t have the presence that we need. It’s going to take us several years to get there, but we think we’ve got the way to do so.”
Edward Jones is a leader in the financial services industry that serves nearly 7 million clients with the help of 12,500 financial advisers and more than 34,000 total employees. The firm reported 2012 revenue of $4.96 billion, a mere fraction of what is planned for the years ahead.
“There is a huge demographic opportunity, and we need to better position ourselves,” Weddle says. “We’ve put a lot of tools in place. We’ve put additional products and services in place to enhance the client’s experience and to enable us and position us to do an even better job for them.”
Here is how Weddle formulated Edward Jones’ long-term vision and is beginning to make it a reality.
Create your strategy
In January 2012, Weddle made a big deal of explaining the long-term vision to the team at Edward Jones, not just what the vision was but why it was needed.
“Laying out a long-term vision provides the opportunity and the potential to get everybody aligned,” Weddle says.
The early success Edward Jones has seen with its plan is due to a thorough self-analysis the company performed when it first decided to create this vision.
“When we worked on our five-year plan we did so with the guidance and assistance of two gentlemen, one being Jim Collins who wrote, ‘From Good to Great,’” Weddle says. “One of the things that he suggests is that you ask yourself three questions.
“The first one is, ‘What do you do better than anybody else?’ The second is, ‘What are you most passionate about?, And third is, ‘What’s your economic driver?’”
Weddle says that Edward Jones’ business model makes the firm the better than anybody else in the investment process.
The firm is most passionate about helping its current and potential individual investors live a better life.
And lastly, its economic driver is its financial advisers.
“It’s not easy to get your arms around the answers to those questions,” Weddle says. “We had a lot of answers before we got it right.”
The second adviser that Edward Jones used in its planning process is Michael Porter, a world renowned expert on strategy, who preaches that strategy is all about a sustainable difference.
“It’s about doing things differently or doing different things than your competition and making trade-offs,” Weddle says. “It’s about making decisions as to what you’re going to offer and what you’re not. Who you’re going to serve and who you’re not. How you run your business comes down to the choices that you make.”
Those two things, the three questions and the tradeoffs, are the core of Edward Jones’ long-term plan.
“If you haven’t gone through the process of thinking those things through, good luck,” he says. “I don’t think you understand who you are or what business you’re in, which means it’s going to be very hard to optimize your results. That’s the value of the planning process for us. Yes, it does bring alignment, but it also brings focus.”
Identify your objectives
In order to better serve existing clients as well as to land many more clients by the year 2020, Weddle needed to set reachable goals for the staff.
“We have identified three peaks, three objectives related to that vision,” Weddle says. “First is growth of financial advisers, the number and our presence in the marketplace.”
Edward Jones currently has more than 7 million client accounts and 4 million households. However, the firm has identified about 40 million U.S. and Canada households that look like Edward Jones’ best clients.
“There’s no way that we can possibly serve even a fraction of that number of folks without increasing our presence in the market,” he says. “You might think, ‘Holy cow, how can you possibly to do that?’ Well, by growing 5-6 percent a year gets you there.”
Edward Jones has grown by more than that rate in the past, and Weddle believes the firm can reach this goal with the help of a new talent acquisition organization that was put in place, revamped FA compensation and significantly updated training and support programs.
“We anticipate supporting a good number of new folks that will be joining us each year,” Weddle says. “We’ve got amazingly strong pipelines right now. We think we’ll grow this year by 700 financial advisers in the U.S. and 80 in Canada and that will be a good start on that 2020 vision.”
The second objective of the 2020 vision is the firm’s assets under care. When the vision was first laid out, the firm had about $600 billion. In 2012 it had about $660 billion-$670 billion.
“By the end of 2020 we’d like to see those assets under care be $1 trillion,” he says. “You get there by growing 10 percent a year. We added about $34 billion of net new assets last year, which exceeded our objective of $30 billion.”
The third objective for the firm surrounds its deeply served households. Of those 4 million households Edward Jones currently serves, it identified 1 million households that the firm has a current deep relationship with. The firm wants to increase this number.
“We want to drive our deeply served households from the 1 million we had a year ago when we rolled out our vision to 4 million deeply served households in 2020. That’s a 15 percent compound annual increase and we’re ahead of where we need to be on that. I know 15 percent sounds high when we’re growing our FA’s by 5 percent and our assets by 10 percent.
“The reason we have set it at that level is because so many of our existing households can be moved to what we have defined as deeply served. It’s not just new households, but it’s going deeper with the folks that we already have a relationship with.”
Drive your plan forward
Now that Edward Jones had gone through the self-analysis and identified its objectives, the next step was to begin to roll out the vision and communicate how the business’ various departments and segments are going to have to contribute to meet those goals.
“One of the outcomes of the roll out of the long-term vision was to then say to every division of the firm, ‘We need you to look at the work you do and bring a critical eye to it and identify those things that need to be increased or put in place that will help us to achieve the 2020 vision. We also need you to identify the legacy work that we’re real comfortable with and we do really well, but maybe doesn’t add the value that it used to,’” Weddle says.
“You outgrow some things. You can’t just add on and add on and add on. You’ve got to also abandon things that no longer deliver value to your chosen client.
Every division of the company has got to come up with its business plan for reaching goals of the vision.
“We challenge each other, but it also allows me, if I’m in operations, to understand what the service side is doing,” he says. “It creates alignment and synergies and often times opportunities for working in a highly coordinated way that eliminates some cost and enhances productivity all driven by the vision.”
The No. 1 key to making a strategy implementation successful is having the right people driving results.
“Your results will be no better than the quality of the individuals who make up your organization,” he says. “You have to be brutally honest. At times you will outgrow some individuals.”
Sharing the business plans, challenging each other and making sure that everyone is working on the same priorities and holding people accountable is crucial to success.
“One area is dependent upon progress being made in another,” Weddle says. “We just need to make sure that we’re doing an absolutely terrific job for each one of those individual investors that we help to reach their financial goals. If we can stay focused on that we’re going to have a lot of success.”
Answer important questions about your business and its future.
Develop objectives to reach in a long-term plan.
Implement your plan with the right people and measures.
The Weddle File:
Name: Jim Weddle
Title: Managing partner
Company: Edward Jones
Born: Elgin, Ill. He grew up in Naperville, Ill.
Education: Attended DePauw University and received a double major in psychology and business. He also got a MBA with a major in finance from Washington University in St. Louis.
What was your very first job, and what did you learn from it?
I had a summer job in 7th grade where I worked Monday through Friday from 8 a.m. until noon for a gentleman who was a retired banker. He had a large property and I drove a tractor, cut the grass, pulled the weeds, painted the house and the barn and worked every day doing that. I learned that you make your own luck if you aspire to do or to have, there’s a way that you can go about making that a reality.
What is the best business advice someone has given you?
I had interned here at Edward Jones, and I went out to Indiana where I established a new office and built it up. I had a mentor who was a very senior individual in our firm at the time named Jack. I remember confiding in Jack and he said, ‘What is your concern?’ And I said, ‘Jack, my concern is I’m 23 years old, and I look even younger. I’m afraid people won’t take me seriously.’ He said, ‘People will treat you the way that you act. If you act like a professional, they will treat you like a professional. If you act like you’re 23, they will treat you like you’re 23.’ He also said, ‘Prepare for every day, but do it the day before.’
Who is someone that you’ve admired?
One was an accounting professor who had a huge impact on me. For his class he said, ‘You need to show up to class prepared or I suggest you don’t show up at all.’ He was teaching us how to be ready for the rest of our lives.
The second guy was a business adviser named Peter Drucker. We worked with Peter for 20 years. He helped us to understand very clearly who our customer was, what our value is, and the purpose of our work.