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How Do Edward Jones and Merrill Lynch Compare?

While all full-service brokers strive to provide a very high level of service to clients, these firms take very different approaches to their business in many ways.

Some full-service brokers purse corporate clients, while others target individuals. Merrill Lynch and Edward D. Jones are two major firms in the full-service arena that have been around for decades. One is taking its training and sales force in a new direction while the other is sticking to a more traditional approach that has led to substantial growth in the past few years.

Origins and History

Edward D. Jones founded Edward Jones in 1922 in Mexico, Mo. A second office was soon opened in Pueblo, Colorado and a teletype machine was used for communication between the offices. The bill for this device was so high that many more offices were opened in a straight line between the original pair to pay for it. (This is why there were offices in Kansas towns such as Hays, Dodge City, and Manhattan.)

Edward Jones has outlasted competitors such as A.G. Edwards to become the market-leading investment company among those brokers using a similar business model.

While all full-service brokers strive to provide a very high level of service to clients, these firms take very different approaches to their business in many ways.

Differing Business Models

Merrill’s Shift

Merrill Lynch began to shift its emphasis in 2012 from pitching stocks and other individual securities to a more comprehensive and holistic approach to financial planning that includes insurance and estate planning. For years, the firm thrived by focusing on landing high net-worth individuals who had at least $250,000 in liquid assets and pitching individual stocks or other securities to these clients.

Merrill moved to an RIA-based platform that charged fees for asset management, rather than commissions. The firm also implemented a three-and-a-half year training program that incorporated the financial planning module from the CFP curriculum, executive and business development and even topics relating to emotional well-being. RIAs are paid a salary plus bonuses and commissions during the program tenure and are expected to bring in at least $10 million in new assets each year. Merrill Lynch receives about 150,000 applications each year, but only a few qualified individuals are chosen for this program. New hires are also paired with more senior advisors who can offer the benefit of their experience. Many industry and RIA experts feel that Merrill’s approach is likely to be effective and will provide trainees with a much more comprehensive perspective of the brokerage business as they build their careers.

In 2010, Merrill also started a discount brokerage service known as Merrill Edge. This platform was designed to compete with Charles Schwab (SCHW), E*trade and other discount brokers that offer many additional services to their clients. Merrill did this to capture smaller investors who do not meet the investment minimums to be full-service clients. This service combines “the investments insights of Merrill Lynch plus the convenience of Bank of America banking,” according to its site.


The number of applications Merrill Lynch receives each year.

The Bottom Line

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About Amy Harvey

Amy R. Harvey writes forStartUps Sections In AmericaRichest.

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