No 1. Edward Jones
Keeping Up with the Joneses
Andrew Glatzel knows the ups and downs of starting a small business, literally. When he first began working as an investment representative, he knocked on nearly every door in the neighborhoods surrounding his Kaimuki office, including the homes located in mountainous St. Louis Heights and Wilhelmina Rise.
“It was the end of the summer of 1999 and it was hot, really hot,” says Glatzel. “That first year was very tough.”
Glatzel works for Edward Jones, an investment firm with an old-fashioned, hometown business model that includes having its investment representatives pound the pavement and burn a little shoe leather. Equal parts Wall Street and Main Street, Jones reps work in one-broker offices with a single assistant, offering financial guidance to mostly small-time and, in some cases, first-time investors. (According to Kiplinger’s Personal Finance, Edward Jones clients have an average income of $54,000 and a net worth of $383,000. The average account size is $104,000.) It may sound small town, but with more than 9,400 branch offices throughout the country collecting more than $2.5 billion in revenues, Edward Jones is definitely big time.
The appeal of this good-neighbor approach, which smells of hot dogs and apple pie, is easy to appreciate. In an investment world, racked by corporate scandal, gun-shy investors may feel more comfortable handing over their life savings to a neighbor who has his or her office next door to the cracked-seed store rather than an unseen representative cloistered in a downtown high-rise.
But the Jonesian model has turned out to be as big a hit with its reps as it is with clients. The company topped Hawaii Business’s inaugural Best Places to Work list, finishing No. 1 on both the small-business and overall lists. It’s a spot with which Edward Jones is familiar, having topped Fortune magazine’s Best Companies to Work For rankings in 2001 and 2002. It placed fourth in 2003.
“My favorite thing about working for Edward Jones has to be the tremendous support the company provides,” says Glatzel. “It enables me to do the best possible job for my customers. It has made a huge contribution to my success.”
That support is substantial. In addition to a base salary of $24,000 and paying for extensive training, including a nine-week training program at a Mainland campus, Edward Jones picks up the tab for office rent and, amazingly, the salary of an assistant. Moreover, the company pays for nearly half of health-insurance costs for the first two years of business.
In the first startup year, Edward Jones projects out-of-pocket expenses at approximately $9,000, but it also expects that reps will earn approximately $20,000 in projected commissions and bonuses. In exchange, the company gets a percentage of the gross commissions clients pay. These tiny branch offices are the company’s only profit centers, so reps are expected to turn a profit as soon as possible. However, there are no timelines or deadlines. Each is considered a one-of-a-kind business, with unique challenges.
Although more than 70 percent of Glatzel’s clients work and live in Kaimuki, Edward Jones reps aren’t bound by geographic territories. Without having to worry about crushing debt and many monthly bills, reps are free to drum up business the old-fashioned way – knocking on doors and speaking with people face to face.
It’s the American Dream with zero-percent financing, or no financing at all, for that matter.
“It’s the next best thing to owning your own business, maybe better, since we don’t have any overhead,” says Cindi John, an Edward Jones rep since 1998. “I wanted to build something of my own. I don’t want someone looking over my shoulder eight hours a day. I get to run the business the way I want to.”
|Fun Fact: Families are encouraged to join Edward Jones reps at the company’s regional sales meetings held annually throughout the country. In addition, Jones offers incentive trips to destinations such as Kenya, Monte Carlo, Aspen, Walt Disney World and Australia. Making time for these trips shouldn’t be a problem for Jones reps, since they set their own schedules.|
According to John, there are close to 40 Edward Jones reps throughout the state, each falling under the purview of regional leader Jane Smoot, who is based in Aina Haina. However, it’s a loose, flexible network. How much or how little each rep interacts with the regional leader is really up to the discretion of the individual reps themselves. They do keep in constant contact with the home office, receiving additional educational and supporting materials – hardly a looking-over-the-shoulder relationship.
Before joining Edward Jones, John worked for eight years as a divorce attorney, “dismantling portfolios instead of building them.” She enjoyed working with clients, but didn’t care for trial work, so a friend recommended entering the investment field. She was pleasantly surprised at what she found with Edward Jones and, shortly thereafter, was knocking on doors in Makiki and on Round Top Drive, gathering a customer base for her S. King Street business.
“ was a very difficult year, starting any small business is,” says John. “It was like a plane taking off at the airport, you have the throttle on full until you reach a certain level.”
John started to earn a profit in her third year and no longer has to knock on any Makiki doors in search of business. Today, she gets all her new customers through referrals. She has also qualified for Edward Jones’ profit-sharing program, so not only is she an employee, but she’s also an owner. And if she wants to take a half-day off, she just asks the boss – herself. “I found that people are very emotional about their money, whether they are getting divorced or not,” says John. “Sometimes I wake up worrying about my clients, but generally I sleep better now, because I know they’re sleeping better.”
Nonexempt Salary: $26,000
Exempt Salary: $86,000 401(k)
Match: 100 % match, up to $500, *profit sharing
Starting Vacation Days: 10