By Bill Beggs Jr.
When we sat down with Jim Weddle in his offce at Edward Jones Corporate Headquarters at Manchester and I-270, the weather was changing rapidly. It was 67 degrees when we arrived, and when we returned to base two hours later, it was very gusty, 32 degrees and still dropping fast.
During the interview at Edward Jones headquarters, the lights in Weddle’s office flickered a couple of times, and outside on the
balcony the fierce wind banged patio
furniture together.
Weddle was unflustered. The investment firm’s managing partner was confident that parallel systems were running out of Tempe, Ariz., so that clients and brokers would have a seamless interface. “We’ve thrown the switch out there,” he said
matter-of-factly.
Weddle isn’t particularly fond of
prognosticators who seem to run around like chickens with their heads cut off when it appears as though the market is headed for a rough patch. Philosophy-wise, he and Jim Cramer, the overly excitable market-watcher of “Mad Money” on CNBC, are diametrically opposed. Comparatively speaking, Cramer seems to be screeching that the sky is falling. Weddle’s firm always keeps an eye on the skies, so the 11,212 financial advisors and the 20,000 branch and home office associates who support them are aware of changes in the weather. But short-term changes, no matter how dramatic they may be, are unimportant.
Key to the Edward Jones approach is not so much the vagaries of the weather as keeping an eye on changes in or stability of the climate. Yes, it may be bone-chillingly cold in the winter and hot enough to fry an egg on the sidewalk in the summer. Point is, both happen to be the normal extremes of living in a temperate economic zone.
“It’s a financial advisor’s job to keep clients from becoming panicked,” Weddle said. “We’ve had a five-year bull market, more or less.
“No one has repealed the business cycle. We’re going to have the down part of the cycle. It’s a normal part of the economy.”
So, do Edward Jones financial advisors let the “R” word cross their lips? Of course, but it’s not the most important word in their vocabularies. And, the “R” word has to be put in perspective. The financial crunch this time, like it was last time and the time before, has been brought on by speculators. Sub-prime mortgages and excesses in the credit market are the culprits this go-round. Another was when the dot-com bubble burst in the late 1990s. Folks who try to get rich quick often get poor just as quick. Investing for retirement is just too sedate for them.
Those types generally aren’t the Edward Jones client. The right investment for them might not be the best investment for you, but advice from Edward Jones is going to be long-term.
“And we’re going to preach diversification,” Weddle said. “We try to do things deliberately.
“The philosophy of all our brokers is the same: Conservative. There’s no one perfect investment. You must be fully aware of your investment objectives and of your risk
tolerance. You must be patient. Buy and hold—but not buy and forget.”
A good friend of Weddle’s is a doctor who’s cut a little more from the Cramer, rather than the Weddle cloth. He called awhile back, frantic about what he perceived as impending financial disaster. In a nutshell, the conversation went like this:
“What should I do?”
“Nothing,” the calmer of the two said. “Stick to your knitting.”
The friend may not be able to retire as early as he would like to, but at 57, he “can see it from here.” The culmination of his investment strategy will be an asset he can rely on to supplement his income in retirement. Today’s volatility is not the be-all and end-all of his financial life just an interesting side trip on a long-term financial journey. The doctor may take the advice, but also could continue to be more emotionally invested in the market.
Emotions, how one feels about what is going on in the markets, is not necessarily a bad thing.
“The Federal Reserve adjusting interest rates has had a positive emotional impact—as well as making funds available to those who need to borrow.”
Weddle applauded the cooperation on both sides of the aisle in Congress to pass the economic stimulus package, wherein most taxpayers will receive several hundred dollars this summer.
“It will be helpful,” he acknowledged. “It’s not going to prevent a recession, but it will have a positive emotional impact.”
Edward Jones had a record-breaking
2007, Weddle pointed out. In addition to
St. Louis, the company now has a presence in Mississauga, Ontario and London. “We don’t need to go to country No. 4,” Weddle said.
At least, not for the time being. The concentration for the near term is to continue to expand and build upon a network of neighborhood offices.
“We’re the only major Wall Street firm that’s a partnership,” Weddle said. We think those associates who help make the firm successful behave differently than employees. It’s been a huge strategic advantage. This way, we’re responsible to our clients and accountable to ourselves.”
Community involvement is a big part of that mind-set, he emphasized.
“Here in St. Louis, we want to be a good, good citizen of the community. We encourage associates to be involved where their interests lie,” Weddle said. “That could be by serving on boards, or via contributing to the United Way—we are so proud of the fact that our associates, with a firm match, raised $3.3 million (for the United Way).”
Raising awareness of the arts and education is a big component of the company’s community mission, and “each financial advisor is out there living in the community that their branch serves, so they may be involved with the YMCA, Rotary, Big Brothers & Big Sisters—and again, we don’t tell them what they need to be involved in. We
suggest that if you have a passion for one of those organizations, volunteer and do a heck of a good job.”
Edward Jones is consistently among the most robust workplace giving campaign’s in the region for both United Way and the Arts & Education Council.
The company has won many plaudits over the years, not the least of which is being on Fortune magazine’s “100 Best Companies to Work For” list nine times—at No. 4 this year.
A few sentences on the home page of the firm’s website sum up what Weddle has been discussing. “For decades, we’ve believed in building relationships through face-to-face interaction, and adhering to a strategy of recommending quality investments that have proven themselves over time. We understand that this approach might be considered unfashionable. But if it means helping our clients achieve their goals, whether for retirement, education, or just financial security, it’s an approach we plan to stick to.”
An emphasis on conversations, on one-on-one interaction—across a desk rather than on the phone. As a website “soundbite” emphasizes: “A bad day is when I don’t meet any clients face to face.”
Another: “Experience has shown that if an investment sounds too good to be true, then it probably is.”
And, a third: “We focus on individual investors, not big corporations. So you’ll get our undivided attention.”
This approach has worked for a long, long time, and Weddle has no intention of “fixing” it.
Edward Jones doesn’t aim to help the
do-it-yourselfer. The stock market is an important part of life for an Edward Jones investor, but generally they leave the heavy lifting up to their financial advisor.
As Weddle points out: “There’s such a demand for our services—from people who know what they don’t know.”
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