Edward Jones Trains Young Stockbrokers the Old-Fashioned Way

The brokerage business is getting tougher on Wall Street. Declining fees make small accounts less profitable, and the government’s “do not call” list hampers phone sales. Brokers are leaving big firms to join or start smaller money management businesses, known as registered investment advisers, that charge fees and don’t take commissions on trades. Competition from discounters such as Charles Schwab has eaten into the market share of the four biggest brokers—Merrill Lynch, Morgan Stanley, Wells Fargo, and UBS.

Then there’s Edward Jones, a 91-year-old brokerage based in St. Louis that’s thriving by sticking to its old ways. It hired 2,682 trainees last year and plans to add a similar number this year, according to Steve Kuehl, a partner. Trainees at Edward Jones, which has more than 12,000 advisers, don’t spend their days pitching stocks to strangers over the phone. They go door to door, like vacuum cleaner salesmen. New brokers are brought to headquarters, where the company has constructed what it calls “role-play suites”—rooms designed to look like homes and offices, complete with doors that they can practice knocking on. They review tapes of themselves with coaches to improve their technique. “We try to help them learn how to present their value proposition in terms of helping people meet their financial goals,” says Kuehl. “The core is face to face.”