Penny Pennington Leads Edward Jones Into Its 100th Year

Something else to point out is that we are opening up greater choice and flexibility for our financial advisors with respect to how they run their practices. For example, we are updating the ways our advisors can team up and operate collaboratively, bringing multiple advisors and branch staff together to be able to serve the more holistic and more complex needs of the clients. We have a lot of conviction that this is the right approach moving forward.

What is your view on why consumers have needs that are more complex and why they want more holistic support today compared with the past? Is it as simple as saying that life is more complicated?

A lot of it is the growing desire among clients for services and relationships that are not just transaction based or product based, and that’s not just true in financial services. There is a broader consumer movement towards longer-term, experienced-based relationships with trusted brands.

It all reflects how they are engaging with other parts of the economy and services outside of the financial space. Think about the way people are engaging with brands that they trust and the tremendous success of organizations that provide consumers with an experience that keeps them curious and interested. I think investors are looking for this same type of experience and service with their financial advisors, frankly.

What is not going to change, I can say with confidence, is the hyper-locality of our business model. Ongoing success will demand that we remain really close to people, communities and families. Today we are in two-thirds of the counties in the U.S., and that is not going to change. We want to be seen in the community and to be engaged in the community.

Our people’s hearts and passions are in their communities, and that is critical to our ongoing success. We strive to be community builders. Our advisors are in their communities serving on hospital boards and school boards, and they raise money for all kinds of social services organizations.

That’s one way that people know that they can trust us. Our people are sitting side by side with them not just in client meetings but out there in the real world, building community. I’m so proud of our people for this. It’s part of our business model and our culture, and it has been for decades.

Something that is changing is our effort to work even more closely and collaboratively with the different professionals that may be touching our client. We are working with the estate planning attorneys, the business attorneys, the tax professionals, etc. Our advisors are empowered to be that trusted hub of the wheel, if you will, that can coordinate the clients’ bigger picture.

It’s all about making sure the client service experience is not just a one-time, transactional thing. The advisory relationship continues over time, and it flexes and changes along with the needs of the client.

Do you think Edward and Ted Jones would have foreseen this move toward goals-based planning and more holistic service that goes beyond a transactional approach?

That’s such an interesting question. You know, I was with a group of retired partners earlier this week, meeting with several hundred people. It was awesome. They are retired from our organization, but they come together once a year to talk about what is happening with Edward Jones. They really care about what we are doing with the brand and the legacy of the organization.

Frankly, they are one of my toughest audiences that I speak in front of in any given year. They ask the hard questions and they push on us. During the most recent meeting, we watched a short video interview of Ted talking about how his father had started the business and how he, as the second generation, came up with his vision for how to carry the business forward.

Remember, Edward Jones started the business in 1922 in downtown St. Louis. Ted describes the firm in its early days as really a wholesale brokerage business. It was originally a business that was not doing much business with the retail investor. The firm at the beginning was doing business with people who were already rich — people who already had a lot of money and a good understanding of the markets.

Ted said in that recorded interview that he didn’t like that business model so much, because, in his words, he wanted to talk to people. Ted said he wanted to work directly with real people and support their growing businesses and lives.

That was back in 1963, I believe, when the interview was filmed. I think he did have a great foresight into what was coming, and that’s why he built the business model the way he did.

Now that you are in at the helm, what lessons can you share about building and protecting a 100-year-old brand?

It’s all about trust, and trust flowing in multiple directions.

A successful brand requires trust from the clients and trust from the people who work for the company. And, frankly, there has to be trust that the organization is financially stable and successful, so that it can reinvest and endure and thrive.

That’s the way we think about stewarding the brand at Edward Jones. We have to ensure that the reason clients trust us is that we are there for them and that we put their interest first — and that we have a sense of integrity. That’s how we hope our clients see us.

Today we can measure this with reputation score, and we watch that really carefully. We know what our score is at a given time and we know which direction it is trending and why.

We nurture the brand based on how our own colleagues’ experience being part of our organization, as well. Our people see that their experience matters and that we care about their purpose and values.

I can add, too, that there are moments where this work of building trust really comes to the fore; for example during times of crisis, like what we saw happen in Florida this year with the recent hurricane.

Our people know how to respond to the needs of our own people. We had our colleagues going in and supporting each other immediately in the wake of the storm. Our people were dropping supplies in the hardest-hit areas to help our own people, and then our own people were immediately able to help provide those supplies to their clients and to their neighbors.

It was an amazing moment coming out of such a serious tragedy. I think our people showed that we care, and that really matters, both internally to our own people and externally in the marketplace.

I should also highlight the financial endurance of the partnership model. Look, we have been highly successful, financially, for 100 years. We have ups and downs, naturally, but we don’t apologize for our success. The success comes as a result of the trust, of the brand we have built and the work we do for our clients and our colleagues.