Edward Jones financial advisors are primarily compensated through a portion of various fees and commissions that Edward Jones receives from the investment products and services clients utilize.
Understanding Advisor Compensation at Edward Jones
At Edward Jones, financial advisors receive their pay as a share of the revenue the firm generates from client accounts. This model means their compensation is tied to the financial products and services clients engage with, aligning their interests with the ongoing management and growth of client assets.
Key Components of Advisor Pay
Edward Jones receives fees and commissions from various sources, and a portion of these amounts are then paid to your financial advisor. These components include:
| Compensation Type | Description |
|---|---|
| Ongoing Service Fees (12b-1 Fees) | Your Edward Jones advisor receives a portion of the annual fees known as 12b-1 fees. These fees are paid out of mutual fund assets to cover distribution and marketing expenses, and for the ongoing service provided to clients. Edward Jones receives these fees from certain mutual funds, and a share of that revenue is allocated to the advisor. |
| Trail Commissions | Advisors also receive a portion of trail commissions. These are ongoing payments Edward Jones receives from certain mutual funds and annuities for continuous service, advice, and maintenance of client accounts. |
| Insurance Commissions | When clients purchase insurance products, such as life insurance or annuities, through Edward Jones, the firm receives commissions from the insurance providers. A portion of these commissions is then paid to the financial advisor who facilitated the sale. |
| Renewal Commissions | For certain insurance products, Edward Jones may also receive ongoing renewal commissions for continued coverage. Your financial advisor receives a share of these recurring payments, which compensate them for the ongoing relationship and service related to these policies. |
How Edward Jones Advisors Receive Their Share
It's important to understand that Edward Jones as a firm first receives these fees and commissions from the product manufacturers (e.g., mutual fund companies, annuity providers, insurance companies). From the revenue Edward Jones receives, your financial advisor is then compensated by receiving a predetermined portion or percentage. This payment structure encourages advisors to maintain long-term relationships with clients and provide ongoing service and guidance for their investments.
