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Broker Who Won $34M Bias Suit Praises Firm's Diversity Efforts

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What You Need to Know

  • The lead plaintiff in the racial bias suit against Edward Jones that ended in a settlement is optimistic about diversity initiatives.
  • Wayne Bland praises the diversity commitment made by Penny Pennington, the firm's managing partner.
  • The company can be an example for the industry if it follows through on its commitment, Bland says.

The lead plaintiff in the racial bias class-action lawsuit against Edward Jones that recently ended with the firm agreeing to pay $34 million as part of a settlement has applauded the company for the diversity initiatives it has committed to.

But he told ThinkAdvisor there is still much more work for Edward Jones and other companies in the financial sector to do on the diversity front and to address racism.

“I am glad it’s over,” Wayne Bland said in a phone interview on Tuesday, one day after Judge Andrea R. Wood granted final approval to the settlement in U.S. District Court for the Northern District of Illinois. Wood found the proposed settlement fair, reasonable and adequate, according to a court document.

“I’m very optimistic about the impact that this is going to have on advisors in the future as well outside of” those who are part of the class-action lawsuit, Bland said of the settlement in the lawsuit, which was filed May 24, 2018.

Bland, who was with Edward Jones from 2014 to 2016, had alleged the firm “employs company-wide policies and practices regarding training, compensation, partnerships, and the assignment of territories, business opportunities and sales support that unlawfully segregate its workforce and deny African Americans the income and advancement opportunities because of their race.”

In addition to the amount that each of the 809 members of the class ends up receiving, Bland, along with Felicia Slaton Young and Nyisha Bell, who were added to the suit in an amended complaint, shall each receive a service award of $150,000 and attorney and other legal fees and costs, according to court documents.

The settlement will “provide some relief to the class, which is limited,” Bland told ThinkAdvisor. But the programmatic relief that is also being provided as part of the settlement in a reduction in training costs at Edward Jones “is going to really help advisors in the future, and hopefully, it’s going to make it easier for more African Americans to really get into this profession, because it’s a great profession,” he said.

Altogether, the settlement is now valued at $58 million, according to a July 1 memorandum in support of plaintiffs’ motion for final approval of the settlement. That makes it the largest employment discrimination settlement achieved in the U.S. since 2018, the memorandum said.

The amount includes more than $21 million of relief for class members who left the firm before Dec. 31, representing the release of all their training cost obligations, and another $3.1 million for the training cost obligations of other class members, the document said.

Challenges That Remain

The diversity initiatives that Edward Jones and other firms in the industry have started represent a “great start,” he said, but “I believe there’s much more work to do. I think this is just the beginning of having these courageous conversations.”

One problem is that “a lot of advisors have been in this profession for a long time, and I think it’s hard for them to accept the changes,” he said.

Bland was encouraged when Penny Pennington was appointed managing partner at Edward Jones in 2019, and the rest of the new leadership team at the firm has “taken some great first steps, but they have a lot of work to do,” he said.

“I think she can really do some good things at Edward Jones,” he said. Bland hopes the other managing partners will support her, because “they can make a difference.”

A ‘Bold’ Step

It was an especially “bold step” by Pennington to commit to bringing the leadership at its U.S. headquarters to 50% women and 20% people of color by the end of 2025, Bland said, referring to a June announcement by the company. Edward Jones also committed to ”human capital aspirations” of 15% people of color and 40% women among U.S. home office general partners and 15% people of color and 30% women among U.S. financial advisors by the same date.

Currently, just 8% of the firm’s financial advisors are people of color, and 21% are women. In its home office senior leadership roles, 9% are people of color and 30% are women, it said.

“Edward Jones is in a very unique position” and can become “an example for the rest of the industry,” Bland said. With its large advisor headcount, “if they can come through on their commitment to make these changes, instead of being a defendant in a lawsuit, they can be an example in the industry.”

However, noting that Edward Jones has a footprint across the U.S., he predicted that in some locations, “there may be a little bit more resistance to some of these changes, so it’s going to take some work.”

Although executives at Edward Jones and other firms have announced commitments in the past to improve diversity, organizations often “fall short” in actually implementing changes across “all levels” of their entire companies, he said, adding that “follow-through” is crucial.

Pictured: Wayne Bland