Edward Jones Reverses Long-Standing Product Policy
By Hal M. Bundrick
NEW YORK (MainStreet) -- Edward Jones is known for cold-calling, door-to-door walking investment reps that tout independence - and offer no proprietary investment products. Until now. The neighborhood-based solo practitioner model is not changing, but the product platform is. For the first time ever - and contrary to its long-standing policy -- the St. Louis-based regional broker will soon offer a house-brand mutual fund.
The Bridge Builder Bond Fund, an intermediate fixed income fund, will launch in the fourth quarter as a part of the firm's Advisory Solutions wrap account, a fee-based mutual fund asset allocation investment program available to Edward Jones clients through their local investment reps.
"We've long said that our intent is to not be a manufacturer of products," says Steve Seifert, Edward Jones Investment Advisory Principal. "But given the size of our (advisory account) program today, we hold some very large positions in several mutual funds. The practicality of owning individual funds within a program of our size does pose some challenges, particularly when it comes to removing or replacing a manager. So by leveraging the sub-advised structure, we are still able to leverage the thinking of our mutual fund research department, but instead of selecting funds or ETFs they are simply selecting managers."The mutual fund will be subadvised by J.P. Morgan Asset Management, Prudential Investments and Robert W. Baird & Co. Inc. The Advisory Solutions managed mutual fund account was introduced by Edward Jones in 2008 and has more than $95 billion in client assets under management held in nearly one-half million accounts. The platform utilizes over 350 mutual funds. "We can replace a manager without disrupting the clients' accounts in the way that we would if we were selling one fund and replacing it with another fund or ETF," Seifert added. He also said that while additional proprietary funds could be added to the managed allocation platform in the future, the firm is taking the process slowly. "That is the only fund at this point that is slated to be launched. We have no other plans at this point for a second fund. Certainly not this year."
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV