Edward Jones To Pay $34 Million As Settlement To Black Advisors

A federal judge has ordered Edward Jones, a St. Louis based financial services firm, to pay a $34 million settlement for bias claims by Black financial advisors.

The firm is well-known for catering to individual investors and has about 19,000 financial advisors. This settlement comes after a class-action lawsuit was filed in 2018 by Stowell & Friedman on behalf of roughly 800 Black financial advisors. The official complaint was “race discrimination,” according to a court filing that names Wayne Bland as the main plaintiff in the class action case. The Black financial advisors accused Edward Jones of assigning them to less lucrative work, denying them working with certain high-level client accounts, and depriving them of advancement opportunities.

In the case represented, Edward Jones, which Dowd Bennett denied wrongdoing, went as far as to try to get the case dismissed as it claimed that the named plaintiffs failed to provide more than speculative claims in the lawsuit. The firm also made moves to dismiss the case since it believed the suit should have happened in a federal court in St. Louis. The U.S.

All of these arguments were denied by District Judge Andrea Wood in Chicago in November 2020 and proceeded to go on with the lawsuit since one of the named plaintiffs resides there.

After a three-year legal battle, Judge Andrea Wood ruled that there was wrongdoing on Edward Jones’ behalf for denying work and opportunities to Black financial advisors on basis of their race. The judge officially signed off on the settlement earlier this month and has ordered Edward Jones to pay every single of the Black advisors that it employed between the period of May 24, 2014, and December 20, 2020, up to $31,000 each. The firm also agreed to form an advisory council to address internal issues of diversity and equity, bring Black financial advisors together for focus groups and provide senior managers with data on hiring and keeping Black employees.

“We reached this agreement because it is in the best interest of Edward Jones and allows our firm to move forward,” Edward Jones spokeswoman Regina DeLuca-Imral said in a statement. 

“We pledged to continue working toward meaningful increases in diversity among our financial advisors and senior leadership – helping all to succeed.”

Bland, a junior advisor who worked for Edward Jones as a South Carolina-based broker between 2014 and 2016, had to pay back training costs to the company after leaving in search of better opportunities. 

He claimed that Black financial advisors were leaving the company, due to their inability to be productive as a result of lack of resources. As part of the settlement, Edward Jones will be updating its practices of recouping training costs. 

The announcement of this settlement comes after Edward Jones was ranked the No. 5 Best Workplaces in Financial Service & Insurance and named to the FORTUNE 100 Best Companies to Work For for the 22nd consecutive year. On April 21, the firm joined organizations across the nation to participate in CEO Action for Diversity & Inclusion’s third annual Day of Understanding and Reflection, a day dedicated to hosting candid conversations about diversity, equity, and inclusion in the workplace.

“Edward Jones has one of the largest advisory workforces, so we are hopeful that this can make a positive impact for African American advisors,” Suzanne Bish, a partner at Stowell & Friedman, told AdvisorHub. “There is relatively new leadership that seems committed to improving diversity at the firm.”

This lawsuit against Edward Jones highlights a more significant issue for the company: retaining diverse employees. While the firm’s profit increased by 18 percent in 2020, Edward Jones lost 117 advisors in the last quarter of the year. The lawsuit also reveals that only six percent of Edward Jones’ workforce is diverse (Black, Latino, and Asian).