Edward Jones adds a fund family to its preferred list

J.P. Morgan secures a highly coveted place in the broker's stable of asset managers.

Aug 14, 2013 @ 4:00 pm

By Jason Kephart

Edward Jones is bulking up its preferred list of mutual fund companies even as it's in the midst of launching its first proprietary fund.

Jones added J.P. Morgan Funds to its list of preferred mutual fund families at the end of July. It's the second addition to the list, which now numbers nine, in the past year.

J.P. Morgan joins American Funds, Franklin Templeton Investments, Hartford Funds, Invesco Ltd., Lord Abbett & Co., MFS Investments, OppenheimerFunds Inc. and John Hancock Funds, which was added last fall, as the preferred mutual funds for Jones' 12,000-plus financial advisers.

The list is considered one of the most coveted in the industry because of its limited size and the fact that the vast majority of Jones' clients' mutual fund assets are with those partners, said Lee Kowarski, partner at mutual fund industry consultant kasina.

“In order to attract assets at Ed Jones, you need to be one of those partners,” he said.

J.P. Morgan's funds have been among the fastest growing in the industry since the financial crisis.

It had $203 billion in fund assets as of the end of July, up from $74 billion five years ago, according to Morningstar Inc. It's more than doubled its market share to 2%, from 0.84%, over that time.

“J.P. Morgan Funds has a broad and deep lineup of mutual fund offerings,” spokeswoman Regina DeLuca-Imral wrote in an e-mailed statement. “This breadth and depth allows financial advisers to meet a broad range of client needs using J.P. Morgan mutual funds.”

J.P. Morgan and John Hancock are the only fund families on the list that don't currently have a revenue sharing agreement with Jones, according to Ms. DeLuca-Imral.

Last year, Jones pulled in more than $100 million from revenue-sharing fees from the other seven families on the list, according to the broker-dealer's website.

Jones is also in the process of launchingits first proprietary mutual fund, which will be available to advisers on its fee-based Advisory Solutions platform.

The planned fund, the Bridge Builder Bond Fund, will be subadvised by J.P. Morgan, along with Prudential Investments and Robert W. Baird & Co. Inc. It's expected to launch next month.


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