The crux of Edward Jones (EJ)’s success was its distinct, focused strategy and powerful corporate culture. Its strategies are consistent with its core values, which worked together to produce its reputation of being a conservative, high-performance, and customer-centric brokerage. Its strategy consisted of unique features in geographic scope, operations, customer targets, product offerings, employee development and incentive structure that others in the industry did not choose.
In the early years, EJ competed in rural America where as the competition mainly targeted metropolitan areas. From 1948 to 1970, EJ had its central office in St. Louis, and opened up branch offices in locations where competition was primarily local banks. Eventually, after establishing its reputation, it expanded its networks into metropolitan areas.
Each of its offices had one financial advisor (FA) and branch office assistance. The firm stressed the importance of personal relationships and FAs were tasked to know their customers and “deepen the share of wallet”. FAs were given total autonomy in choosing a location and targeting customers. Compared to other firms that utilize a shared FA model or even online advising, EJ offered an added value of a personal financial advisor. Its convenient locations and friendly decor enabled customers to “drop by” and feel comfortable whereas, EJ’s competitors utilized call centers and other low-touch strategies. EJ’s success was reproducible in international markets such as Canada and UK.
Its strategy was to target the average American, serving individual suburban and small-town consumers and excluding institutional businesses. Services were identical across different levels of household income or net worth and FAs pursued accounts of all sizes. With a solid reputation and high service ratings, small investors helped to bring in large accounts through referrals. This provided an opportunity for EJ...