Jack Sharry: Hello, everyone. Thanks for joining us on this week’s edition of WealthTech on Deck. Edward Jones has been doing some really interesting work around building out their planning products and platform offerings. I’ve been watching this now for a number of years. They brought on some top flight talent from across the industry and across the country as they look to enhance what is being offered to clients through their advisors. Today, we’re going to talk to Russ Tipper. Russ is the Edward Jones general partner responsible for products. We’re going to learn more about what that means. Of course, a primary driver of their business, all businesses these days are their advisory offerings, SMAs, and UMAs, which Russ leads. He’s also responsible for alternatives, retirement products like annuities, and much more. Russ is an experienced hand at all this, with stints at Capital Group, American Funds, Merrill, and a few other name brands I’m sure we’ll hear about as we go. So Russ, it’s great to have you on WealthTech on Deck. I look forward to the conversation.

Russ Tipper: Thanks, Jack. It’s great to be here as well. Thanks for having me.

Jack Sharry: Sure. So Russ, let’s kick things off with you describing more specifically about the product organization you lead. If you would please fill us in on what you’re responsible for and the sorts of things you’re working on.

Russ Tipper: Yeah, Jack, thanks so much. Really excited to be part of Edward Jones. This organization has over 100 years of being committed to serving our clients, our colleagues, and our communities. I’m very fortunate to lead our products organization, which is over 300 professionals, both in St Louis, Tempe, and as you mentioned across North America. We help financial advisors serve their clients in their communities, covering everything from our trading capabilities. So how we execute upon all of our equity and fixed income capabilities, our trust services, and then bringing alive as we look to serve clients across all segments, from high net worth, new to wealth, as well as workplace. So those platforms that you’d mentioned, the products, both financial products and investment products, to bring those client needs to bear. We’ll probably go deeper on a few topics, but you know, I want to make sure that we’re focusing on having the right platforms and capabilities to serve the needs of our current clients as well as our future clients. And a big theme you’re gonna hear me talk about is scalability and efficiency, as our firm journeys to be much more of a comprehensive financial planning led organization. So we want to help our clients serve, you know, making sure that we bring their needs, wants, and wishes to a reality. And so my team is really thinking about, how do we make sure we have the right investment capabilities that are easily implemented in a really scalable way, without compromising the personalization that matters most to those clients.

Jack Sharry: So I’ve been following closely as the leadership at Jones have been, they’ve been prominent in the press, LinkedIn and other places where we get our news. Big vision from everything I see and hear, obviously, products, investment products, financial products, tools, and what have you I think part of what you all do. So talk about that vision. What’s the big vision? And then what’s your role as a product organization? Where do you fit into all that?

Russ Tipper: Yeah, thanks, Jack. Let me kind of ground us on our strategic ambition, right? Like as an organization, we want to improve financial wellness for tens of millions of long-term investors across North America, so that’s US and Canada, through providing comprehensive, personalized planning and access to professional advice, right? You know, we’re really bringing Wall Street to main street, and now we serve clients and communities across America. As I mentioned, you know, we are building heavily in those financial capabilities, both in the capabilities themselves, but most and most importantly on the acumen and accreditation of our financial advisors, we are really proud that we have more CFP designations than any other firm in the industry. Last year alone, we had 1100 nearly 1100 financial advisors receive their CFP designation. That’s over twice as many as our next closest wealth managers. And so we’re heavily focusing on both the acumen as well as deploying those capabilities in a partnership with MoneyGuide through Envestnet, making sure that we offer not only goals based advice, which is kind of an extension of what we already do today, but really getting into like comprehensive fiduciary financial planning, and that is a big step acting as a fiduciary so when I think about my team, my team is not responsible for Those efforts, but we’re working diligently to make sure the recommendations that come out of that financial planning process are seamless and easy to implement. You know, as our financial advisors kind of journey from offering like point in time solutions to ongoing advice now to ongoing, comprehensive advice, we didn’t make it easy, so an advisor might have said before, you know, I don’t do X, right, but if it’s a client’s best interest as a fiduciary, we need to make that come to life. So clearly, you know, things like protection, insurance that might not be core of their practice today are going to be core to bringing those needs, wants, and wishes and protecting them. So how do we make it easy and simple and implement but again, without compromising that personalization that is unique of why our financial advisors are different in the industry, and what our clients are expecting from our financial advisors. Yeah, I would say, Jack, it’s almost like where to start. There’s so many things that we’re doing in our journey of transformation. Let me just hit on a couple. And we can kind of go deeper or go in different directions.

Jack Sharry: So Russ, to the degree you can share what you’re working on now, if you’d be so kind as to fill us in on some of the projects you’re most excited about, some of the stuff you’re working on, I’m going to dig in here a little bit because I know you got a very full plate with lots of stuff going on. So please let us know what you guys are working on and how you’re incorporating all that into your platform and the big vision you’ve described. Sure.

Russ Tipper: As I mentioned, I keep talking about personalization at scale, so I’ll go a little deeper there, but also talk about, like, how we’re expanding our product shelf in a responsible way to kind of support some of our high net worth aspirations. So we’ve been making enormous investments in building out that personalization at scale. We’ve seen as an industry, advisors love the scale of our model business, but you know, a model really is a one size fits most approach, and so many clients aren’t looking for that, and many advisors don’t feel like it expresses kind of their thinking, as well as expressing kind of where the client has been in that journey to get them into that. And while many in the industry have kind of found ways to delay the pain of transitioning a client from where they started to where they’re ending. We’ve gone a very different way. So we’ve built some tools. One’s called model assistant, which is helping create personalized research models. The other is portfolio assistant, helping our financial advisors to build personalized portfolios. They’re both rooted in optimization. We leverage Axioma as our optimizer, and then our partnership with Blackrock Aladdin, from a risk modeling kind of perspective. They’re two sides of the same coin. So instead of trying to say, hey, we’re going to delay the inevitable, why not take the client’s preferences, past experience into consideration when we’re kind of building a portfolio? So say a client has been successfully working with you know, one of our partners, whether it be, you know, an American Funds, a JP Morgan, BlackRock, any number of partners. As they look to move to an advisory program, one solution could be, just take your time and try to push tax or multiple year and then force them into a false sense of, you know, perfection. The other is to say, what do they own? And how do I maybe look into that? And especially when you start thinking about things like package products, like mutual funds and ETFs, there are a lot of unique things about all the different firms we work with. But there’s also a lot of core capabilities that make one large cap growth versus another large cap growth look very, very similar. So a lot of the capabilities that are around, like direct indexing, are being applied here, but instead of the index being, say, the S&P500, the index is now more of our model. And much like a direct index where all clients have very similar risk to that benchmark, they’re all unique snowflakes. So we’re doing the exact same thing with our model business and the tools to help our financial advisors. The difference is, on the model side of it, we’re taking into consideration what the client owned, what those kind of preferences they might be. But because it’s a firm discretionary offering, we’ve got kind of final say. So the client will look at what we’re proposing, taking in where they’ve been, where they want to go, and can say, that’s great. That’s firm discretion. A fully scalable, optimized trading and rebalancing, tax management… this lifetime. The other is that portfolio system, which is saying, you know what, I like that, but you know, I want to make a tweak. I want to maybe be less exposed international markets versus domestic markets. I want to be more exposed to equities versus fixed income based on my kind of views. Or I like that, but this, that’s a little different than what you would say. Or I want to take a little bit more active risk. That’s the portfolio assistant. Our goal, again, is to help our clients move into an advisory perspective and never be stuck, stuck in a brokerage account if they want to, or even be stuck in a legacy model where they can’t move because of that friction. We are trying to remove all those capabilities. Now, these capabilities have been deployed now to our 20,000 kind of financial advisors, and they have been a great way for both easing the move to advisory for those clients who wanted to but had the friction, as well as driving significant efficiencies. So instead of: So Russ, I don’t think we’ve ever talked about this, but I’ve been working with Edward Jones for 30 plus years. I was a national sales manager at Putnam in the early 90s, and Edward Jones was a key account of mine as the national sales manager, and what you’ve just described does not sound like the Edward Jones of old, I will have to say, particularly when you and I were chatting the other day and you mentioned that you were moving to the alts business, I just about lost it. I did not think, if you were to ask me, prior to that discussion, what’s the last firm that would get into the alts business? I’d say, oh, it’s Edward Jones, no doubt. So talk about that transition, or that migration, or that evolution. Because really, what I’ve observed, and it’s really been happening over many years now, and really you’re, I only see you accelerating it is you’re really moving toward really having a good selection, a good diversity of capability. You’re having good support, you have a good process in terms of bringing stuff on. You want to make sure that the advisors are with you. They’re buying in. So talk about just your process around that evolution, that process of engaging with the advisors, getting them comfortable, and then also supporting them as things evolve.

Russ Tipper: Yeah, so Jack, that’s not the first time I’ve heard someone say it doesn’t seem like the old Edward Jones, I’d actually say it is exactly the same old Edward Jones, who’s been serving clients for 100 years, because we put the needs of our clients first, and how do we help them make their dreams, their needs, their wants, their wishes a reality? And so everything I’ve talked about is not launching product for the sake of product, right? We’re not doing things that are our best interests. They’re all about improving outcomes. As you mentioned, alternatives. If there are ways that I can generate better returns, reduce risk, and/or generate higher income for our clients, why not do it? And if anything Jack, I think… inspired and worked with the team around how do we democratize access to those alternatives so that it isn’t just for high net worth clients? Because, again, an affluent client and a high net worth client have the same dreams. They might just be at a different scale. If we can improve again, returns, reduce risks, and generate higher income, why wouldn’t we look to do that? So we’re grounded on improving client outcomes. We’re grounded by putting the client first, and so that’s why you’re seeing us be willing to kind of do these things. But we’re also saying, let’s focus on things like private equity. A client can understand that, right? It’s just a non-public version of a company they might already be kind of investing in, and many firms might have been public before, but now they’ve gone private as there are easier ways to restructure than they could maybe in the public markets. We’ve seen many investment grade companies issuing in the private credit markets. It’s not just, you know, lower quality companies, because of the covenants, and the way that it’s structured, it gives them kind of greater control. And then for most of our clients, you know, real estate is a major investment, and so why not also diversify that, not just through residential real estate, but also kind of commercial real estate as well. So you’re never going to see us have irresponsible product launches. We’re not going to do things that don’t benefit our clients. You’re also not going to see us look to be a supermarket. We still want this to be a highly curated shelf, but we want to offer choice, because the last thing I want to do is a client to leave their great financial advisor because of a lack of access to a product that would improve their outcome. But I would feel very differently if it was something that we feel would not help their outcome, and that client probably is not the one who’s looking to avail themselves of the advice of our financial advisor.

Jack Sharry: So I have to say, I applaud you. I love what I’m seeing, and all kidding aside, it is highly consistent with the Edward Jones I knew way back when, when I first started calling on Jones, John Bachmann was the managing partner, and it’s really fascinating to watch that evolution, and it’s as I’ve seen, Jones literally do everything. It’s very deliberate. It’s thoughtful. Clients’ interest always comes first. You’re always the highest in ratings in terms of how clients view you, how advisors view you. So clearly, it’s working. I don’t see that changing at all. So I guess the next question is, where do you go from here? There’s lots I know you have on your plate. What are some of the things you’re looking forward to developing over time to whatever degree you wish to share?

Russ Tipper: Yeah, so Jack, I think there’s things that I would say are kind of playing a little bit of catch up, and then there are opportunities for us to leap frog, and I think that’s one of the things that I like about us being very thoughtful and deliberate, is where do we want to get to industry parity? Because we don’t believe it’s differentiated, and where do we think we actually can go a step further than the industry, because we think it’s going to deliver client outcomes. Some examples of this is today we have five unique advisory programs. It’s UMA, it’s advisory solution fund. Those are our managed solutions firm, kind of discretionary. We have guided fund and guided flex, our client discretionary offerings. The big difference being guided flex has individual securities versus pooled vehicles in guided fund. And then now our FA managed solutions, which is our answer for FA discretion. When I think about those, it’s like having five unique apartments, right? And it’s a clunky experience if I want to go from one to the other, I need to leave the apartment, lock the door, go into the other one. So we are on a journey, much like other people, of going from apartments to a full house, that house will have lots of rooms you might not use. It reminds me of as a kid, we had a living room, a formal living room. I got to use it for holidays. Otherwise I wasn’t allowed into it, but I knew it was there if I ever needed to, and I was allowed to go into it. So similarly, a client might only need client discretionary for a point in time or firm discretionary, but they have the ability so having a single investment advisory offering that is a I’m signing one time to make a commitment of how we want to work together, which is in an investment advisor relationship, and then the freedom to move across those as my needs change over time is going to be absolutely foundational, and things that are going to be key to where we need to go. I think the leapfrogging part is, is that a lot of people talk about financial planning. More times than not it is one time point in time, and it’s not kind of ongoing. So we’re building significant connectivity between financial planning and this investment advisor offering. So this advisor offering will be linked to the people and accounts that you’re choosing to plan with. So it won’t just be me as one account or one agreement and then my wife or other people who I’m planning with in different agreements. It’ll be a single agreement, talking about the people, the parties, the accounts, and the goals I’m trying to solve for. There will be connectivity between what is happening in the advisory account and its relationships and investments with the plan itself, and the two are going to talk to each other, because as I’m ahead of plan, I might make decisions around how I allocate money across different goals. If I’m behind plan, it might make different decisions. It also helps with how we provide advice, right? So instead of just having, you know, these kind of check the box moments of, hey, if I need to talk to you, it’s a hey, here’s how the plan and the investments are working together, and the justification of why I should stay on course or the justification of why we might need to make some differences. So to me, we’re calling this the signature experience. I truly believe it’s a leapfrogging moment in the industry that we go from talking about this, but the advisor having to swivel between systems to really having now all the tools, capabilities, and technology to do exactly what the clients are expecting for us, which is comprehensive financial planning, comprehensive wealth management, and the two systems are working with each other, not fighting against each other.

Jack Sharry: That’s great. And will signature just be for advisory programs? Or will you have other products that can be incorporated into the process?

Russ Tipper: So think about the financial planning as an umbrella of all of your relationships at Edward Jones, both brokerage and advisory. You’ll also take into consideration to limit your outside assets. Most of the connecting point, though, is going to be across both your advisory assets to your planning. We’ll be aware of what’s happening in brokerage, but at the same time, we’re also not trying to cross the line where we are providing advice in the transactional kind of base relationship, so awareness of how that is helping the goal, but not reaching back now in where we are providing advice on a brokerage account that’s not under a best interest standard and point in time and transactional.

Jack Sharry: Gotcha. What else? Anything else that you’re working on that’s future oriented, that you can share around, just where you see the industry going, where you see Jones in that industry, whether it’s to catch up or to leapfrog.

Russ Tipper: Yeah, so again, we talked a lot about our investment advisory kind of capabilities. We’ve talked a lot about our financial planning capabilities. I’d say the last one I’ll talk about is, as I mentioned a little bit in the beginning, is things we’re doing in terms of making underwriting insurance much easier. So we’ve been working in partnership with a company called Porch. That’s company that our Edward Jones venture team actually has taken a stake in, who is helping us kind of digitize and transform the process for underwriting insurance. It is making what is a no- transparent, cumbersome process to be an incredibly transparent digital process. So what we’ve seen since we’ve been deploying these capabilities is because of that transparency, because it’s been digitized, because it’s helping you know exactly where it is, what was historically a business that had over 40% of applications having some issues and not in good order, that we are trending 4% on our way down to less than 1% of that, plus the speed is going from what would take several months to, in most cases, a month or less, in order to kind of deliver. So as we talk about, how do we leverage our tools, capabilities, and technology to, again, make it easier for a financial advisor? We want to make it easier to plan. We want to make it easier to implement that plan, and it’s not just an advisory context, it’s how do we do things like insurance, make that process much simpler and more streamlined? The one other comment I will make too, because I haven’t hit on it, and no conversation would be complete without talking about artificial intelligence, when I talked about the tools like model assistant earlier, where we are making it easier to do that kind of personalization. What are the drawbacks of personalization, especially when the firm is treating it, is that the advisor doesn’t know exactly what’s happening, and that could create some angst. We are definitely leveraging our data, and I’ll tell you, Jack, data is going to be a competitive advantage. We have over 20,000 financial advisors covering all of North America. We have over 500,000 client interactions on a given week. So think about the power of that data over time, but just in the context of model assistant, we’re using kind of generative language to help drive attribution so that our financial advisors now can talk about what has happened, why it’s happened, the benefits of tax management, the benefits of the transition of existing assets over, the benefits of those optimized trades that again, the advisor can still provide the high level of service, but do it in an incredibly scalable way, and a way that they feel really comfortable about taking their hands off the steering wheel, because they know the outcome isn’t changing. It’s just changing who needs to be one watching and monitoring and trading that outcome on a daily basis.

Jack Sharry: This has been great. Before we look to part ways today, fill me in a little bit on your career journey. I know a bit of it, but especially for our younger audience, they’re always interested in how somebody like you gets to be sitting in the chair you’re sitting in. So fill us in.

Russ Tipper: Yeah, Jack, I feel like I’ve been very fortunate to have a fairly diverse and unique background that really is informing how we’re making decisions today. You might not be aware, like others, I actually started as a financial advisor right out of college. It was such an enlightening experience to me. It taught me the things I loved about the business and the things that were challenges. It really has informed kind of how we’ve talked about today is that disconnect between what the advisor wants to do and the system is… kind of against them. And so I, you know, I sometimes joke that the swivel chair was created for a reason, to help that financial advisor move across all their different seats, different applications. And I think one of the value props of Edward Jones is we are making it simpler, a single experience, versus, I think many of our competitors who are talking about good news, you have 30 different applications that’s going to make your swivel chair spin out of control. So it reminds us kind of like what we’re solving for, which is to create connectivity, to help bring to life the plan the client wants from us. That’s where I’ve learned a lot from my experience as a financial advisor. I’ve also worked at, you know, two asset managers. So my time at Putnam, after that, and then prior to joining here, my time at Capital Group, it fully reinforces, to me, like the importance of the partnerships we have with our asset management firms, they’re critical to the value that our clients get… through kind of our financial advisors, and really helps improve those client outcomes. But one thing that I will say that having spent time at two asset managers and then 11 years at Merrill, is things in which wealth managers probably should have done themselves, but have relied too heavily on an asset manager to go do for them. And so a great example is that concept of tax and personalization at scale, an asset manager can do a phenomenal job, but they can only see one small piece of that pie. And direct index is a perfect example that. But clients are comprehensive. They’re across multiple accounts. And so you might say, okay, well, then use multiple direct indexers. The problem is, they’re all making great decisions for themselves. They’re just not making great decisions holistically. And the trouble with that is twofold. One is, is that you could now start canceling out the benefits of one another. And second is, you’re too focused on your piece versus the client’s overall outcome. So I use examples of you might have a manager that is single sleeve as part of a broader portfolio. They own a 6% position to Apple. It could be based… in the market. That entire position is underwater. That manager would never sell the full 6% because of the active risk it would create the sleeve level. But that sleeve is $100,000 as part of a million-dollar portfolio. That 6% of Apple is only 60 basis points of the broader portfolio. And so again, moving it from a manager doing it to us doing it at a broader portfolio really unlocks a lot of those benefits. So as I mentioned, we’re doing it right now on mutual fund ETF models, but as we continue to build out our UMA capabilities, those are things that are going to be incredibly important to us. As we move, again, to a single advisory experience, how do we make sure that even if we’re not trading ourselves, we’re aware of what’s happening in a client discretionary, an FA discretionary, even a brokerage account, because a client would expect us to know that, hey, I just sold Tesla for a loss. Let’s not trade over here, because they’re making a good decision over here, but blind to the broader portfolio. So that’s definitely areas that we’re focusing a lot on. And luckily, hopefully, my experience has been being in the position of a financial advisor, being in the position of our trusted partners who add so much value, but we’ve asked to do too much. And then now my second stint at a wealth manager, we can try to bring them all together to really deliver on maximizing the FA alpha, the investment manager alpha, and the platform alpha.

Jack Sharry: Well, seems to me they got the right guy in the right chair. So, appreciate your sharing all that. As we look to wrap up, any key takeaways you want to share with our audience?

Russ Tipper: Yeah, I’ll maybe try to reiterate some things from the beginning. You know, our ambition is improving financial wellness for tens of millions of long-term investors across North America through comprehensive, personalized planning and advice. So we’ve got that personalization part is something we’re really focused on. When I talk about financial wellness, put out there a financial wellness score that we want by 2030 to have over 80% of our clients have improved financial wellness. You see a doctor because you want to make sure you’re getting healthier. Our clients are working with their financial advisor because they are looking to do the exact same thing. And then I’m really blessed again to have a really talented team that’s looking to enhance our product shelf and our capabilities to make sure that those financial planning aspirations, those wellness aspirations, come to life, and give our advisors the tools and capabilities to go do that, and the time dividend to invest in those planning conversations and the deep discovery that’s required to have robust, comprehensive financial planning conversations.

Jack Sharry: Very cool. Russ, this has been great. Really have enjoyed the conversation. I expected I’d learned a few things. I learned a whole lot more than that. So thanks for that. One last question before we part, always my favorite. What do you do outside of work that you’re excited or passionate about, that people might find interesting or surprising?

Russ Tipper: Yeah, Jack, my wife and I really love traveling, and our kids are at this really sweet spot from a traveling perspective. They’re 14 and 16, so we really want to try to pass that passion of traveling onto them. It’s also a great opportunity, with my daughter off at boarding school and kids loving to be on devices or with friends in break, that’s a way to kind of get away in a way that we’re all excited to. We’ve been really fortunate over the past few years to be able to travel to places like Japan, Hungary, Slovenia, France, Spain, England, Belize, Costa Rica. We’re going later this year to Thailand, and hoping actually to schedule a trip to Tanzania to go climb Mount Kilimanjaro for my 50th birthday. So…

Jack Sharry: Wow, very cool, interesting and surprising. Yes, I like this. So Russ, thanks. I really appreciate the conversation. Really, really wonderful. And to our audience, thanks for tuning in. If you’ve enjoyed our podcast, please rate, review, subscribe, and share what we’re doing here at WealthTech on Deck, we’re available wherever you get your podcasts. You should also check us out at our dedicated website, wealthtechondeck.com. All of our episodes are there, along with blogs and curated content from many folks around the industry. Russ, thanks again. This has been really a wonderful conversation. Thanks so much.

Russ Tipper: Thank you. I’ve enjoyed the conversation as well. Appreciate it.