Edward Jones is making a play for an expansion into metro markets such as Boston, Sacramento and Dallas. The St. Louis-based broker-dealer has been aggressively hiring advisors, leading the firm to add 15 new regions going into 2020. The firm groups advisors into regions to create smaller communities that offer mentoring, opportunities and events for their FAs.

Chuck Orban, principal, branch and region development at Edward Jones, talks about this problem of plenty that led to region-splitting, as well as the firm’s current growth strategy, which focuses on hiring more experienced financial advisors.

Q: How many regions are there in the U.S.? How is a region classified as a region?

A: Right now, in the U.S. and Canada, we have a total of 305 regions. And I’ll say our methodology when we create a new region or look at a region structure is really defined by a couple key inputs.

One, we always look at what’s the client opportunity in that region. When I say that if you think about an urban area or a metro area, that’s going to have a much different client opportunity than something that might be rural in the Midwest or up in the plains or something like that.

And then we look at the leadership that we have by current financial advisors. Do we have the depth of leadership that can help lead that region? For training, mentoring and things, do we have folks that can help lead that? And then what’s the current makeup of total financial advisors in the region today? And then really, I’d say the heaviest weighting is, do we have the leadership on the ground to help lead the efforts in that region that we need going forward?

If you just took 305 [regions] by our FAs, you’re going to get around 60 FAs per region as just an average. We don’t manage to a number, we really just go back to those inputs. We have very few regions larger than 80 or 90 financial advisors. What they’ll tell us from the field is that once you get that big, you kind of lose the community feeling. You don’t have the relationships when you get that big as far as gathering goes. And on the other hand, if you have 30 or 40 financial advisors in a region, we may not have all the help we need in there to really work with the training or the mentoring that may be happening in that region. So it varies.

Chuck Orban

Q: How do you decide how to split regions? Why did you reshuffle this year?

A: The reason why we would split or add a region is, do we have ready leadership that can help lead it? And then, do we have an opportunity based on the size -- maybe the region’s gotten too big -- that we feel like a new geography or cutting that or changing the geography would make a benefit to help us really serve that market and serve those clients and grow that market faster than what we have in the past.

We’ve had significant financial advisor growth in the last three years. That really then plays into how many regions do we add based on our financial advisor growth. We added 15 new regions this year going into 2020. So, that was reflective of our results in 2019. We’ve had strong financial advisor growth. We’ve been growing clients in many markets. We have ready leadership to take on, so we’ve re-cut, redesigned some of the geography to establish new regions. We use the term region split. Sometimes we may take two regions, and we’ll carve out and have three regions now or whatever makes sense based on geography and leadership.

Q: On average, every year how many regions do you typically reshuffle?

A: It all depends. What drives that the most on a year-to-year basis is our growth of financial advisors, and that's really what comprises it. So, just at a very simple level, if you take those 15 regions, and let’s just say they're averaging 60 FAs in a region, that’s about 900 FAs. Well, that’s about how many FAs we added last year here at Edward Jones — right around 1000.

In years that we maybe don’t grow as many financial advisors, we won’t add as many new regions the following year to that.

Q: Are the newer regions for 2020 reflective of Edward Jones’ expansion strategy?

A: Historically, we have a lot of offices in rural areas and that’s just really where we kind of started our business years ago. The last 20 years or so we’ve been very specific around strategies about serving more clients in metro markets, more urban markets. And again, that’s based off the client opportunity.

You will see a majority of our new regions are really coming about in our metro areas or the urban areas. And that is reflective because there is significantly more client opportunity there that we are continuing to grow. And that’s the need that we have, that we want to accelerate that growth going forward. We’ve identified 50 markets in the U.S. and Canada based on the client potential.

Q: If you look at the last couple of years, what are some of the areas you focus on in terms of strategy for the regions? Is there anything different in the way you approach the strategy for these faster-growing regions over the last couple of years?

A: What we continue to focus on and maybe what we’ve been doing a little differently as well to help support our client growth and financial advisor growth — one, we’ve continued to focus on attracting individuals to Edward Jones that have not been in the industry before. So, we call them career changers, which we’ve always done, but we continue to focus on those we think that would be a great opportunity and a great fit for the financial advisor role.

In addition, we’ve really increased our efforts, especially in the metro markets, regarding experienced financial advisors, so those that are currently in the industry today. And that’s something in the last two years, we’ve really, on the strategy side and even structure, put some more efforts there because we know in those markets, there are a lot of financial advisors that we think would be a great fit here at Edward Jones. And we purposely — with marketing traction, recruiting events — have really doubled down in some of those metro markets around that strategy. We’re seeing some good results, which is really helping us in those type of markets, because we think it is a good strategy for us going forward.

Editor's note: This interview has been edited for clarity and brevity.