CHICAGO - St. Louis-based Edward Jones has added a handful of municipal professionals to its ranks over the last year and is looking to further boost its banking staff as the retail brokerage seeks to parlay its specialty into new business given the heightened attention now on retail buyers.

The firm's municipal growth stems primarily from the need to satisfy a thirst for retail product from its swelling ranks of retail brokers, known as financial advisers. The firm had about 11,000 brokers last year and is up to 11,707 now with plans to reach 17,500 by 2012.

"The growth of Edward Jones as a firm necessitates that we grow public finance so that we have access to municipal product and in order to do that we have to grow our number of public finance offices and bankers," said head of investment banking Bret Kimes.

The firm's roughly dozen bankers are located in St. Louis, Chicago, Michigan, Raleigh-Durham, Phoenix and Houston. The firm most recently opened a second Michigan office with the hiring of David Kahn as a managing director in Lansing last month.

Kahn was most recently with Raymond James & Associates and previously worked with UBS and Bear Stearns & Co. Before becoming a banker, he served as a former associate director of the Michigan Association of School Administrators.

Edward Jones first established a physical public finance banking presence in Michigan last summer with the hiring of Don Bemis as a managing director in Detroit. Bemis had spent 16 years with the former A.G. Edwards & Sons Inc. and then Wachovia Securities - which is now Wells Fargo Securities - after its acquisition of A.G. Edwards in 2006. Bemis previously was a state superintendent of public instruction and a superintendent of Utica Community Schools.

Earlier this year the firm established a banking presence in Chicago with the hiring of Kate DeProsperis in March as a director. She previously worked at Bank of America Merrill Lynch and Citi.

The firm's trading desk received a boost with the hiring of Mark Pitcher in St. Louis in April and Tony Pusateri as a team leader in the municipal trading east group last year. Both men previously worked for the former A.G. Edwards and then Wachovia.

Additional hirers over the last year all in the St. Louis headquarters of the firm include Richard Han as a director, Sharon Smith as a investment banking specialist, and Vern Kovarik as a municipal syndicate underwriting specialist.

The firm has capitalized on moves by its competitors to scale back on their municipal staffing. Kimes and Richard Ryffel, who joined the firm early last year after tenures at Banc of America and A.G. Edwards, have long known many of the bankers and in some cases previously worked with the professionals they've hired over the last year.

The two said their focus on building the firm in the near-term remains on adding bankers to increase access to municipal product in the primary market although the firm has added to its trading staff and expects to ramp up its secondary market capabilities.

They remain in the market for opportunistic hires of bankers with at least 10 years of experience who are a good fit for Edward Jones "culture" that depends on close working relationships among the various capital markets' groups. Their eyes are on supplementing existing offices and further expanding in the East, West and Upper Midwest. Kimes said the firm expects to add five to six bankers over the next six to nine months.

While the firm needs additional bankers to accommodate growing product demand from its brokers, it needs the added staff also to accommodate its growing number of potential municipal clients. The firm has received requests from issuers and municipal financial advisers to participate in competitive selection processes for negotiated transactions and is receiving a growing number of invitations to participate in selling groups.

With retail assuming a more dominant role in the market amid a flight to quality, issuers are increasingly looking to appeal to retail buyers - from mom-and-pop buyers to mutual funds and money managers - to increase interest in their paper. Ryffel said he sees the trend continuing "just because so much capital has exited the market."

Edward Jones' rankings as a co-manager and senior manager don't necessarily reflect its growth. By the privately held firm's own account, it has participated on negotiated sales as either a senior manager, co-manager or selling group member on 423 issues so far this year compared to 416 last year and 406 in 2007.

The firm overall generated $3.8 billion of net revenue in 2008 with $435 billion assets under management as of July. It ranked 12th last year as a senior manager in Missouri. It ranked 63rd as a senior manager nationally in 2007, 40th last year and 47th so far this year. It ranked 25th as a co-manager in 2007, 27th last year and 21st so far this year as a co-manager nationally, according to Thomson Reuters.

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