Edward Jones added more than 200 financial advisors in the second quarter and boosted its profits substantially, thanks to asset appreciation and client inflows.
Income in the U.S. for the St. Louis-based firm's parent company soared by a quarter in the second three months of 2026, the firm disclosed in a filing with the Securities and Exchange Commission last week. While Edward Jones' expenses also grew by double digits after the costs of paying more than 19,000 advisors, the enlarged ranks of 6.1 million U.S. client households helped the firm easily offset those higher charges.
Recent filings also gave thousands of advisors and other employees more information about the company's pending offer to exchange Class A limited partnership stakes for new Class B shares in the firm.
Scroll down the page for the key takeaways from the U.S. earnings metrics for Edward Jones' parent firm in the second quarter. Unless otherwise noted, every metric refers only to the U.S. business and excludes the firm's business in Canada.
For a look at the firm's rankings in the latest JD Power U.S. Advisor Satisfaction Study, click here. And follow these links to see Financial Planning's coverage of the firm's investment into personal finance platform Quicken and integration of financial safety software firm Carefull.
Financial advisor recruiting and retention
Despite some signs of rising attrition in recent years, the number of Edward Jones advisors in the U.S. has ticked up 1%, or 212 advisors, to 19,647 from the same time a year ago.
Client assets
An influx of net new assets and asset appreciation buoyed Edward Jones' client holdings in the second quarter. The flows climbed 8% year over year to $17.7 billion, while client assets under care surged 15% to $2.6 trillion and customer households increased 2% to 6.1 million.
Expenses
Those stronger business metrics, in turn, came with higher expenses in the form of advisor compensation, to the tune of an 18% bump in that category to $1.9 billion in the second quarter. Variable compensation, which is tied to asset values, soared by a third year over year to $763 million. In addition, the firm spent more on technology.
"Communications and data processing increased due to continued investments in new tools and technology and higher depreciation expense as a result of these recent investments," the company said.
Overall, the company's operating costs jumped 17% from the same period a year ago to $4.3 billion.
Bottom line
Even after those higher expenses, however, the company still netted stronger profits. The company earned $588 million in income before allocations to partners on net revenue of $4.9 billion for a margin of 12% for the quarter. The profit soared by 25%, revenue was up 18% and the margin was 0.8 percentage points higher than the second quarter of last year.
Interest-rate sensitivity
Count Edward Jones and other large wealth management firms generating substantial business from cash management among those invested in any interest-rate moves from the Fed. Excluding assets in the firm's money market fund and at third-party banks, a 1% hike to short-term rates could boost its parent firm's annual net interest income by $120 million, and a 1% cut could shrink it by $147 million, according to the firm.
More details about possible equity swaps
While the company
"Because the 7.5% payment is an expense of the partnership, it is senior to all allocations and distributions of net income," according to a risk factor cited in the filing. "As a consequence of this priority structure, in periods of reduced profitability of the partnership, Class B limited partners may receive lower allocations of net income and lower distributions, or no allocations or distributions at all, while Class A limited partners continue to receive 7.5% payments and allocations and distributions of net income pursuant to the partnership agreement."
With an expected issuance date of Jan. 4, 2027 for the new Class B shares, the firm said the recapitalization would: simplify the structure of the partnership, keep its employee benefit package competitive, provide more transparency for limited partners, align the stakeholders across the various tiers of ownership, reduce the expenses tied to that 7.5% payment, improve its credit and enhance "the limited partner experience through more frequent distributions of allocated net income."
