Ditching ‘know-it-all’ for ‘learn-it-all’: How Edward Jones’ Penny Pennington is conquering this crisis for the century-old wealth manager

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Penny Pennington spent 19 years climbing the ranks at Edward Jones before becoming its sixth leader in January 2019, armed with a strategic plan for the future of the century-old wealth management firm.

Twelve months later, COVID-19 arrived in the U.S.

Gyrating financial markets were quickly accompanied by a deep economic contraction — all while the nature of work was being turned upside down. Then, earlier this month, widespread protests erupted over racial injustice, striking in Pennington, a native of Nashville and resident of St. Louis, the urge to speak out in favor of “greater understanding and empathy.”

Catching up with Pennington just before the protests began, I was struck by the candor and humility that no doubt have helped catapult her to the top of Edward Jones, overseeing 49,000 employees across North America. As you follow our conversation, I believe you will notice a rare level of self-awareness in her discussions of the firm's leadership model, the state of the industry during this pandemic and economic downturn, her career path and those of women in financial services, and more.

Below are excerpts from the conversation.

When did you first realize the gravity of the impending pandemic? What were some of your early steps?

Like so many world events, we will never forget where we were at about that time, right?

I'm on the board of the St. Louis Federal Reserve, and I remember being at a board meeting in February with another member, who leads a global company. She began talking about the effects of COVID-19 in Asia, as well as her estimation of when it would be affecting us dramatically. That was my first instance of: It's on its way and we need to get ready. That was a wakeup call.

As we were getting ready, we got the information that Pennsylvania was the first state to issue stay-at-home orders. We have a number of branches and regional leadership in Pennsylvania. So, it was then that we swung into immediate action with a set of guiding principles that we penned as an executive committee on March 17.

We penned the principles because we knew that there was no way we would be able to, top-down, respond to the urgency, the speed, the agility that would be required as we foresaw a roll of stay-at-home orders across North America. The bedrock of the principles was to remain connected to our clients and prospective clients, to remain connected to one another as colleagues, and to ensure that we continue to be helpful and healthy in our communities.

We have a branch in 2,000 of the 3,000 counties in the United States and all 10 provinces in Canada. So, as Pennsylvania issued their stay-at-home order, our folks went into action with a great deal of autonomy to ensure that those guiding principles were operationalized across the map.

We did things like ramping up the number of remote connections available in our firm, from 15,000 to 50,000, in 10 days' time. That took Herculean effort.

We also began to understand very quickly that our clients needed more complete advice from us than ever before. That included, in addition to their financial well-being, things like their physical and mental well-being.

So, we dialed up the resources that were available directly to them and to our branch teams to help them through the early weeks, which were certainly more anxious.

We've now moved into a period that I've called the uncertain interrupted normal, where things are certainly different than they were three months ago, but we've entered a phase where we are more likely learning a new normal with our clients and for our organization.

You mentioned that you realized a top-down leadership approach, amid uncertainty and regional nuances, would not be effective. Was that a realization unique to the pandemic?

It's absolutely something that we knew before COVID-19. The definition of leadership has been changing for the past several years — from a top-down, directive-driven, know-it-all approach to one that recognizes that that was always an illusion.

It's become even more of an illusion in the last several years, as the consumer has become more educated; more tech-aware, tech-expectant, and tech-demanding; less homogenous and more unique; and more desiring that brands and companies treat them as unique individuals. There is no way that a top-down, know-it-all leadership style can meet the needs of that growing group of consumers in a hyper-personalized way and at the speed that they expect it.

We've known for quite some time that this pivot was happening, and our organization has always had, as a hallmark, distributed leadership. We're all over North America, and so we have a distributed leadership model that has put more leaders closer to clients and investors than just about any firm in our industry. We use our core values as the guide for decision making, which leaves a lot of local autonomy in the hands of regional leaders and individual financial advisers as they build their practices.

This is something that's really been dialed up with COVID-19. What it has affirmed for us is that building our organization around flexible, agile, growth-minded leadership is what's going to be in the best interest of our existing clients and the investors we want to serve in the future.

Talk about how advisers have pivoted in their interaction with clients during this period. What have they learned?

What's been affirmed for us is the thing that will never change: Human-centered relationships are the root of what we do, for whom we do it, and, frankly, why we do it. Human centeredness is the root of a trusted relationship. That has not gone away.

So, we've continued to stay closely connected with our clients, much more virtually than we were a few months ago. We've asked our clients not to come into the branch, but to work with us virtually through Webex, through Zoom, with virtual coffee chats, virtual networking opportunities, through good-old-fashioned telephone calls.

I've seen a few photos of clients standing on one side of the window, pressing their hand up against the window with their financial adviser on the other side.

It's a signal of the trust and, frankly, love built up over years of relationships and of being local in communities. And it's a signal that, right now, we are in this together.

So, the learning around technology certainly has ramped up. There are folks among us who have said, thank goodness, this is the way I've been building my practice for years. One financial adviser in particular, in Chicago — a couple hundred clients, about $75 million of assets under care — he only has 10 clients within 10 or 20 miles of his branch. His entire network, his entire practice, is country-wide. So, we have financial advisers who have been working in this more virtual environment for years with really good tools to do that.

What everyone is finding — this is true of firms like ours in the wealth management business, as well as CEOs I'm talking to in B2C as well as B2B environments — is that building new relationships of trust virtually is something that we are all learning about. Consumers are learning about it, businesses are learning about, and leaders are learning about it as well.

A year into your tenure as managing partner, you probably had several plans in place and being executed — then, this crisis hit. What moved to the back burner?

Actually, none of our plans got put on the back burner. And I know that if I could see your face, Devin, you’re probably going, “What? How could that be true?”

The commitment that we made when I became managing partner in January of 2019 was a four-part commitment to a transformational journey for the benefit of our clients. The first part is to make human-centered, complete wealth management a reality for our clients. Second part: knowing that the talent and the technology required for that growth of impact has to be dialed up. Third part is that our operating system as a firm, which is the way that we make decisions and the way that we're organized, has to evolve. And the fourth part of that commitment is to leverage our unique culture and private partnership to make better decisions with more ease and speed.

What we found at the start of COVID-19 is that we had about a two-week delay where we stopped much of the work that we were doing on that transformational journey in order to respond in the moment with the agility that was required. But when we picked that work back up again after a couple weeks, what we discovered was that our four-part commitment had actually been affirmed in its importance. And we got right back to it.

We did some lessons-learned experiences with our senior leadership team, and that confirmed to us that what we learned during COVID-19 was simply affirming the path that we were on. It sped us up and affirmed the necessity.

I also recognize that we are in a privileged place in the work that we do. We count 42 million investors in the United States who think and behave like serious long-term individual investors. There are three attributes of that: They value advice; they appreciate human relationship for that advice; and they have a long-term orientation. They want to marshal their own resources for a future of their making, and they're looking for help to do that.

So, 42 million of those folks out there, and we serve 7 million today. We are in a growth industry and a growth paradigm at a time when there are actually too few human financial advisers for the needs. So, we are not in an industry that has been diminished in its impact or importance because of what's been happening these past three months. The need for it has actually been dialed up. I realize that that's a privileged and blessed place to be.

How have the skills required to be a successful adviser evolved over time?

I was a financial adviser — that's how I got my start at Edward Jones. I started as a financial adviser in January of 2000, just before the tech bubble burst in March of that year.

From that experience, I derive a lot of understanding as well as empathy for what it takes to be a successful financial adviser. At its heart, what remains the same is the skill as well as the heart required to build trust.

Building trust requires a level of empathy. It requires authenticity. It requires, of course, expertise for people to trust you with their hopes, dreams, and assets that they're marshaling to achieve what matters most to them.

People have to feel all of that from their financial adviser from the very beginning of the relationship.

What's required to do that has evolved somewhat over time in terms of the tools that you apply. Of course, technology — when I was a financial adviser, we used green screen and a telephone. The internet wasn't really alive and well; we didn't have Webex or Zoom capabilities. We used face-to-face much more, and we used the telephone. That's quite different today. Also, the nature of the products and services that are utilized for clients — those are changing all the time. Edward Jones supports our financial advisers in that learning and that expertise — that's an important part of the job. But to remain a real human being, bringing your experience, bringing your empathy to the relationship — that, as I said, is what's at the heart of the matter.

You've spent two decades at one company, which isn't seen as the norm anymore, at least for younger professionals today. What kept you engaged along the way?

I was in corporate banking for 14 years before coming to Edward Jones, and I was at three different organizations in those 14 years. That may sound a little bit more like, from a stereotypical standpoint, what younger people want to do, which is move around more often — and I did.

I was moving around in search of something, though, and I found it when I came to Edward Jones. I was moving around in search of not only success in my career, but a level of significance that made it worth it.

When I began to build my practice here and make that kind of difference in the lives of others, I found my purpose. That's what made it worth it for me to remain at the organization. That's the first thing.

The second thing is that I have had six different jobs at Edward Jones in the 20 years that I've been here. Each time — stretching myself, being asked to stretch, being supported to stretch into something completely different — I thought, I don't have the experience to do this. How can they possibly have confidence in me to do that?

So, I was a financial adviser; I was a leader in my region; I moved to St. Louis and I came into our home office, responsible for the training of all our new financial advisers; I moved to the responsibility of the hiring, support, and development for all of our client-service professionals in our branches; then I moved to be responsible for our entire distributed leadership team; and then I moved to a completely different division, responsible for all the products, services, marketing, trading, and capital markets for the entire organization. And now I’m the firm’s managing partner.

Because we're a growth organization, because we believe in the growth and development and possibilities for incredible professionals, I have had — I won't call it six different careers — but I have had six different growing experiences at this firm. There has been no grass that’s grown under my feet during that 20-year period of time.

As younger professionals, especially women, seek to follow a path similar to yours, what advice do you offer?

What I'll share is a hopeful and optimistic point of view that has been learned and experienced by me during a very rewarding and supported career. I know that others have different experiences in their careers.

The level of support, camaraderie, "you go, girl" kind of mentorship, and coaching that I've gotten in my career has taught me to know that we have a lot more work to do for others who have not received that. We have a lot more that can be done and will be done.

But a career like mine is in the grasp of anyone who seeks it. As a financial adviser and, earlier in my career, in investment banking, I was one of the few women in the room. And frankly, I kind of enjoyed that.

I enjoyed standing out. I enjoyed looking different than others who consumers or investors might have had experience with.

I also taught my fellow financial advisers, who happened to be men, a thing or two about the level of empathy that would benefit them while working with women and around women. I was happy to bring that to the table, and I challenge other women to do the same.

About 19-20% of our financial advisers are women. It needs to be a much bigger number than that, but we are on the right path and we are supporting them in growing their practices, as well as growing into leadership. Women have different points of view that need to be ventilated, need to be aired out, need to be supported and talked about. We are doing that.

Helping women understand the route to leadership has to do with our own sense — often our own misguided sense — of what qualification means for leadership. So, we are helping our entire organization understand that. I see that understanding, that empathy, that awareness growing in the marketplace at large for supporting women and men in that journey.

As we work from home, is mentorship being sacrificed?

I can appreciate how there might be some experience of that being relinquished because of the freneticism of what's happening right now — the heads-down, “we’ve got a lot of work to do” nature of this period. We also don't have as much passing each other in the hallway, stopping each other for a short conversation about, “Hey, I'm about to go into this meeting, and I'm thinking about saying this or doing that. What advice do you have for me?”

So, yes, we are having to learn new ways to do that. But when we're at our best — and I see this happening in our organization right now, because it's challenging times, because we're all learning new things, because of the team-based nature of our organization — leaders are reaching out to people, peers are reaching out to each other, saying, “Could we get on a Zoom call right now just to talk this through for a minute before I get on with my client?” Regional leadership is helping new financial advisers. And much more, every day. I'm actually seeing the experience of mentorship being dialed up.

Any final thoughts?

I keep thinking about the changing role of leadership, from know-it-all to learn-it-all kinds of leaders.

What an opportunity this period is for leaders to exemplify that — that kind of vulnerability, that kind of learning and growth mindset.

If we do that well, we will serve our customers better. We will come together in more unified ways during periods of crisis. We will allow professionals to bring together their values with their careers and professional purpose.

I believe so strongly that we can come out of this stronger, and that we can create something positive for young professionals, for professionals advancing in their careers who are looking to make greater impact, and for leaders who really want to be making a different kind of mark on the world.