Edward Jones' David Chubak on AI, Teaming, and Bridging the Advice Gap

Dow Jones
Oct 07

In 1920, Pittsburgh's KDKA aired the first commercial radio broadcast. Two years later, when Edward Jones was founded, more than 500 licensed radio stations existed in the U.S. Today, Edward Jones continues to thrive, and is doing so amid another period of rapid technological change. But unlike radio's early days, which had no impact on the company's then nascent business, artificial intelligence is forcing every wealth management firm to quickly adapt because the disruptive and fast-growing technology presents enormous opportunities -- and risks.

As head of wealth management and field management for St. Louis-based Edward Jones, David Chubak is helping to steer the $2.6 trillion firm, which has more than 20,000 advisors and nine million clients, through a volatile period defined by technological upheaval. A critical challenge involves nimbly integrating AI while maintaining the human touch that its advisors provide clients.

Chubak guides Edward Jones' client strategies, comprehensive financial planning, advice services, and branch team support across North America. He joined the firm four years ago after spending nearly a decade at Citigroup. Before then was a partner at McKinsey for more than seven years. A member of Edward Jones Enterprise Leadership Team, Chubak was named a principal in 2022. In his role, he's focused on enabling the firm to serve more clients more comprehensively and deepening relationships between the firm's advisors and clients.

Chubak recently joined me on Barron's Advisor's The Way Forward podcast, where he discussed the following topics. (You can listen to the podcast and read the full transcript here.)

Closing the advice gap: "The advice gap isn't just that there are fewer advisors and that they're ultimately retiring faster. It's that more and more clients are looking for more advice. It's a bull market for people who want advice and they're just not finding it."

Protecting against fraud. "Especially as we're seeing aging clients, we're seeing elder abuse issues and potential fraud," says Chubak, discussing its partnership with Carefull to offer identity theft and fraud protection to all clients. "We brought them in as a partner, and we are offering that for free to our clients. The statistic that really got us there is that one in four American families is facing a fraud event."

Serving anxious clients. "We're in a 24-7 news cycle. FOMO is a thing. And unfortunately, it's creating and reinforcing anxiety and not creating the sense of fulfillment that people are looking for. We [have] accountability. And I use that word very deliberately. It's not just a responsibility. We're putting an accountability to our leadership and our FAs [financial advisors] that our responsibility in working with a client is to help them achieve greater financial fulfillment. That's our path forward as a firm."

Human trust over AI: "AI is not going to replace the trust factor that a human being can create by sitting across from a client and being there at the moment that matters. The empathy, understanding, and patience -- those aspects are so important."

Succession planning: "We did this research with Morning Consult and it found that over 40% of advisors don't have a succession plan. When you think of the statistic that a third of advisors are planning to retire in the next decade and senior advisors, our research showed, are planning [to retire] in the next five, it's kind of hard to comprehend [not having a succession plan]. These are people who build financial plans for people in their lives and aren't thinking about that. And when you ask advisors in the research, 70% will say that they're [avoiding succession planning] because they're concerned. They're delaying because they want to find the right person who will carry their legacy."

Increasing teaming efforts: "We started introducing teaming a few years ago. We now have about 5,000 of our financial advisors in one of our alternative team models, of which 500, 600 of them are actually now in a horizontal team, which is two FAs who combine a practice, combine their clients, and serve them together. And I expect that number will grow meaningfully in the years ahead."

The type of clients most seeking teams. "We're leaning into teaming and not just as a way of driving capacity and productivity and succession, but also we're finding more and more clients as they're looking for more comprehensive advice and are also looking for people who have specific capabilities and skills, who have depth and experience. We're finding that especially for clients with complex needs, they're not looking for an individual. What they're looking for is the power of teams and capabilities that can serve all of their needs with a trusted partner who can bring it together."

 

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