A former Edward Jones financial advisor has filed a lawsuit against the firm, alleging that its diversity and equity policies unfairly disadvantage white financial advisors in terms of compensation, benefits, and career opportunities.
The lawsuit, filed March 10 in a federal court in St. Louis by Bryan D. Winter, claims that Edward Jones’ policies “expressly” favor diverse advisors over their white counterparts.
Winter, a US Navy veteran who worked at Edward Jones for three years before moving to Raymond James' independent broker-dealer in 2022, according to his BrokerCheck profile, is seeking class-action status, monetary damages, and an order requiring the firm to revise its policies.
“Edward Jones proudly proclaims that it focuses on ‘equity,’ not equality. And because Edward Jones does not treat the races equal, Edward Jones violates the law,” the lawsuit states, as reported by Barron's.
One of the key claims in the lawsuit centers on Edward Jones’ Goodknight program, designed to help retiring advisors transition their clients to newer advisors. Winter alleges that the program provides additional compensation to retiring advisors when they transfer assets to women or diverse advisors, placing white advisors at a disadvantage.
The lawsuit also claims that the firm’s performance rating system is tied to the commissions generated from assets received in the Goodknight program. Because advisors' performance ratings are based in part on commissions from an advisor's book of business – including fees and commissions on assets they may get from a Goodknight program – Winter argues that the structure unfairly skews performance ratings against white advisors.
“The Goodknight compensation structure disadvantaged him and other [straight white males]: he would have received more Goodknights (and certainly would have had a better chance to receive such Goodknights), and both the short-term and long-term benefits that came with those Goodknights, were it not for the policy,” the lawsuit stated.
Additionally, the lawsuit claimed that Edward Jones prioritizes race and gender when making decisions about promotions, terminations, and advisor transitions, further disadvantaging white advisors.
The firm has denied the allegations and defended its approach to diversity and inclusion.
“Edward Jones is committed to creating a place of belonging for all of our associates and clients and making a positive impact in our communities,” a company representative said in a statement to Barron's. “We strongly deny any allegation of discrimination or bias in our business practices. Our purpose remains unchanged. We seek to make a positive impact in the lives of all of our clients and colleagues and together benefit our communities and society.”
Among scores of initiatives, Edward Jones's website highlights immersive events to support DEI, a dozen business resource groups to help people from different cultures and backgrounds share ideas, and goals to boost representation in its leadership from people of color and women by the end of 2025.
This is not the first time Edward Jones has faced legal action related to alleged discrimination. In 2021, the firm reached a $34 million settlement to resolve a lawsuit filed by former advisor Wayne Bland, who accused Edward Jones of widespread discrimination against Black financial advisors. That lawsuit also alleged that the Goodknight program disproportionately benefited white advisors at the expense of nonwhite advisors.
Edward Jones's approach to helping more women and minority advisors get started drew mixed reactions even in 2019, when the firm circulated a memo offering a 10 percent incentive to advisors who give a piece of their book of business to advisors who are women or minorities. While external voices praised the move as a much-needed leg up for traditionally overlooked groups, people on the inside reportedly panned the approach, arguing that it unfairly goes beyond equality in hiring.
"[The new rules] are, by definition, discriminatory," one advisor speaking confidentially to InvestmentNews said at the time. "When you jump into the pay side of it, you're seriously crossing a line."
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