UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549


_______________________





FORM
10-Q


(Mark
One)


[ X
      ]
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d)OF
      THE SECURITIES EXCHANGE ACT OF 1934





For the
quarterly period ended September 26, 2008


OR


[     ]
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
      EXCHANGE ACT OF 1934





For the
transition period from _________ to _________





Commission
file number 0-16633





THE JONES
FINANCIAL COMPANIES, L.L.L.P.


____________________________________________________________________________


(Exact
name of registrant as specified in its Partnership Agreement)





MISSOURI
            43-1450818


____________________________________________________________________________


(State
      or other jurisdiction of
            (IRS
      Employer Identification No.)incorporation
      or organization)





12555
Manchester Road


Des
Peres, Missouri 63131


____________________________________________________________________________


(Address
of principal executive office)


(Zip
Code)





(314)
515-2000


____________________________________________________________________________


(Registrant's
telephone number, including area code)





Indicate
by check mark whether the registrant: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. YES [ X ] NO [   ]





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of "large accelerated filer,"
"accelerated filer" and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.  (Check one):





Large
      accelerated filer [   ]
            Accelerated
      filer [   ]Non-accelerated
      filer [ X ]
            Smaller
      reporting company
[   ]


(do not
check if a smaller reporting company)





Indicated
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).  Yes [   ] No [ X
]







1




THE
JONES FINANCIAL COMPANIES, L.L.L.P.





INDEX





PageNumber








Part I.
            FINANCIAL INFORMATIONItem 1.
            Financial
  Statements


Consolidated Statements of Financial
      Condition
            3Consolidated Statements of
      Income
            5Consolidated Statements of Changes in
      Partnership Capital Subject toMandatory
      Redemption
            6Consolidated Statements of Cash
      Flows
            7Notes to Consolidated Financial
      Statements
            8


Item 2.
            Management’s Discussion and Analysis of
      FinancialCondition and Results of Operations
            15Item 3.
            Quantitative and Qualitative Disclosures About Market
      Risk
            26Item 4.
            Controls and Procedures
            26Part II.
            OTHER INFORMATIONItem 1.
            Legal Proceedings
            27Item 1A.
            Risk Factors
            28Item 6.
            Exhibits
            28Signatures
            29








2
 PART I. FINANCIAL INFORMATION
 
 ITEM 1.
                    FINANCIAL STATEMENTS


THE
JONES FINANCIAL COMPANIES, L.L.L.P.


CONSOLIDATED STATEMENTS OF FINANCIAL
CONDITION


ASSETS





(Unaudited)September
      26,
            
            
            December
      31,(Dollars
      in thousands)
            
            2008
            
            
            2007Cash
      and cash equivalents
            
            $
            384,145
            
            
            $
            378,141Cash
      segregated under federal regulations
            
            
            1,644,000
            
            
            
            1,620,129Securities
      purchased under agreements to resell
            
            
            729,000
            
            
            
            595,000Receivable
      from:Customers
            
            
            2,264,950
            
            
            
            1,989,962Brokers, dealers and clearing organizations
            
            
            462,304
            
            
            
            439,378Mutual funds, insurance companies, and other
            
            
            177,010
            
            
            
            173,610Securities
      owned, at fair valueInventory securities
            
            
            174,568
            
            
            
            87,524Investment securities
            
            
            104,575
            
            
            
            136,628Equipment,
      property and improvements, at cost,net of accumulated depreciation
            
            
            459,318
            
            
            
            328,668Other
      assets
            
            
            69,979
            
            
            
            75,338TOTAL
      ASSETS
            
            $
            6,469,849
            
            
            $
            5,824,378





The
accompanying notes are an integral part of these consolidated financial
statements.
  3
 PART I.
FINANCIAL INFORMATION
 
 Item
      1.
                    Financial Statements,
      continued


THE
JONES FINANCIAL COMPANIES, L.L.L.P.


CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION


LIABILITIES





(Unaudited)September
      26,
              
              
              December
      31,(Dollars
      in thousands)
              
              2008
              
              
              2007Payable
      to:Customers
              
              $
              4,068,815
              
              
              $
              3,326,854Brokers, dealers and clearing organizations
              
              
              100,898
              
              
              
              66,469Securities
      sold, not yet purchased, at fair value
              
              
              12,322
              
              
              
              5,410Accrued
      compensation and employee benefits
              
              
              362,548
              
              
              
              497,135Accounts
      payable and accrued expenses
              
              
              189,498
              
              
              
              191,596Long-term
      debt
              
              
              9,284
              
              
              
              10,8344,743,365
              
              
              
              4,098,298Liabilities
      subordinated to claims of general creditors
              
              
              261,100
              
              
              
              275,300Commitments
      and contingencies (See Notes)Partnership
      capital subject to mandatory redemption,net of reserve for anticipated withdrawals
              
              
              1,409,266
              
              
              
              1,328,342Reserve
      for anticipated withdrawals
              
              
              56,118
              
              
              
              122,438Total
      partnership capital subject to mandatory redemption
              
              
              1,465,384
              
              
              
              1,450,780TOTAL LIABILITIES
              
              $
              6,469,849
              
              
              $
              5,824,378


The
accompanying notes are an integral part of these consolidated financial
statements.
  4
 PART I.
FINANCIAL INFORMATION
 
 Item
      1.
                    Financial Statements,
      continued


THE
JONES FINANCIAL COMPANIES, L.L.L.P.


CONSOLIDATED STATEMENTS OF INCOME


(Unaudited)




Three
      Months Ended
              
              
              Nine
      Months Ended(Dollars
      in thousands,
              
              September
      26,
              
              
              September
      28,
              
              
              September
      26,
              
              
              September
      28,except
      per unit information)
              
              2008
              
              
              2007
              
              
              2008
              
              
              2007Revenue:Trade RevenueCommissions
              
              $
              373,088
              
              
              $
              444,875
              
              
              $
              1,246,889
              
              
              $
              1,417,631Principal transactions
              
              
              129,936
              
              
              
              117,228
              
              
              
              381,166
              
              
              
              281,219Investment banking
              
              
              11,210
              
              
              
              10,736
              
              
              
              36,095
              
              
              
              21,280Fee RevenueAsset fees
              
              
              275,917
              
              
              
              282,495
              
              
              
              845,189
              
              
              
              807,444Account and activity fees
              
              
              119,544
              
              
              
              112,313
              
              
              
              354,057
              
              
              
              326,522Interest and dividends
              
              
              47,423
              
              
              
              78,637
              
              
              
              154,228
              
              
              
              235,273Other revenue
              
              
              (9,138
              )
              
              
              5,693
              
              
              
              (10,286
              )
              
              
              19,100Total revenue
              
              
              947,980
              
              
              
              1,051,977
              
              
              
              3,007,338
              
              
              
              3,108,469Interest expense
              
              
              17,607
              
              
              
              19,954
              
              
              
              55,616
              
              
              
              60,185Net revenue
              
              
              930,373
              
              
              
              1,032,023
              
              
              
              2,951,722
              
              
              
              3,048,284Operating
      expenses:Compensation and benefits
              
              
              575,661
              
              
              
              637,530
              
              
              
              1,822,399
              
              
              
              1,855,975Communications and data processing
              
              
              81,694
              
              
              
              78,007
              
              
              
              239,556
              
              
              
              223,391Occupancy and equipment
              
              
              80,081
              
              
              
              72,718
              
              
              
              233,566
              
              
              
              227,077Payroll and other taxes
              
              
              34,302
              
              
              
              33,622
              
              
              
              115,756
              
              
              
              107,933Advertising
              
              
              14,624
              
              
              
              15,735
              
              
              
              52,369
              
              
              
              45,079Postage and shipping
              
              
              15,698
              
              
              
              14,301
              
              
              
              43,510
              
              
              
              42,451Floor brokerage and clearance fees
              
              
              5,028
              
              
              
              4,735
              
              
              
              13,715
              
              
              
              13,228Other operating expenses
              
              
              50,461
              
              
              
              47,226
              
              
              
              156,163
              
              
              
              131,387Total operating expenses
              
              
              857,549
              
              
              
              903,874
              
              
              
              2,677,034
              
              
              
              2,646,521Income
      before allocations to partners
              
              
              72,824
              
              
              
              128,149
              
              
              
              274,688
              
              
              
              401,763Allocations
      to partners:Limited
      partners
              
              
              9,819
              
              
              
              20,792
              
              
              
              37,267
              
              
              
              65,440Subordinated limited partners
              
              
              6,770
              
              
              
              10,946
              
              
              
              26,254
              
              
              
              35,566General partners
              
              
              56,235
              
              
              
              96,411
              
              
              
              211,167
              
              
              
              300,757Net
      Income
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -Income
      before allocations to partnersper
      weighted average $1,000equivalent
      limited partnership unit outstanding
              
              $
              20.14
              
              
              $
              41.84
              
              
              $
              75.95
              
              
              $
              131.17Weighted
      average $1,000 equivalentlimited
      partnership units outstanding
              
              
              487,537
              
              
              
              496,968
              
              
              
              490,678
              
              
              
              498,903


The
accompanying notes are an integral part of these consolidated financial
statements.
  5
 PART I.
FINANCIAL INFORMATION
 
 Item
      1.
                      Financial Statements,
      continued


THE
JONES FINANCIAL COMPANIES, L.L.L.P.


CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERSHIP
CAPITAL


SUBJECT
TO MANDATORY REDEMPTION


NINE
MONTHS ENDED SEPTEMBER 26, 2008 AND SEPTEMBER 28, 2007


(Unaudited)






(Dollars
      in thousands)
            
            Limited
      Partnership Capital
            
            
            Subordinated
      Limited Partnership Capital
            
            
            General
      Partnership Capital
            
            
            TotalTOTAL
      PARTNERSHIP CAPITALSUBJECT
      TO MANDATORYREDEMPTION,
      DECEMBER 31, 2006
            
            $
            229,270
            
            
            $
            137,503
            
            
            $
            636,606
            
            
            $
            1,003,379Reserve
      for anticipated withdrawals
            
            
            (20,938
            )
            
            
            (12,372
            )
            
            
            (62,683
            )
            
            
            (95,993
            )Partnership
      capital subject to mandatoryredemption, net of reserve for anticipatedwithdrawals,
      December 31, 2006
            
            
            208,332
            
            
            
            125,131
            
            
            
            573,923
            
            
            
            907,386Issuance
      of partnership interests
            
            
            293,562
            
            
            
            22,408
            
            
            
            8,038
            
            
            
            324,008Redemption
      of partnership interests
            
            
            (5,587
            )
            
            
            (612
            )
            
            
            -
            
            
            
            (6,199
            )Income
      allocated to partners
            
            
            65,440
            
            
            
            35,566
            
            
            
            300,757
            
            
            
            401,763Withdrawals
      and distributions
            
            
            (1,985
            )
            
            
            (32,556
            )
            
            
            (186,756
            )
            
            
            (221,297
            )TOTAL
      PARTNERSHIP CAPITALSUBJECT
      TO MANDATORYREDEMPTION,
      SEPTEMBER 28, 2007
            
            
            559,762
            
            
            
            149,937
            
            
            
            695,962
            
            
            
            1,405,661Reserve
      for anticipated withdrawals
            
            
            (63,454
            )
            
            
            (3,010
            )
            
            
            (30,990
            )
            
            
            (97,454
            )Partnership
      capital subject to mandatoryredemption,
      net of reserve for anticipatedwithdrawals,
      September 28, 2007
            
            $
            496,308
            
            
            $
            146,927
            
            
            $
            664,972
            
            
            $
            1,308,207TOTAL
      PARTNERSHIP CAPITALSUBJECT
      TO MANDATORYREDEMPTION,
      DECEMBER 31, 2007
            
            $
            545,199
            
            
            $
            158,133
            
            
            $
            747,448
            
            
            $
            1,450,780Reserve
      for anticipated withdrawals
            
            
            (50,713
            )
            
            
            (11,456
            )
            
            
            (60,269
            )
            
            
            (122,438
            )Partnership
      capital subject to mandatoryredemption, net of reserve for anticipatedwithdrawals,
      December 31, 2007
            
            
            494,486
            
            
            
            146,677
            
            
            
            687,179
            
            
            
            1,328,342Issuance
      of partnership interests
            
            
            -
            
            
            
            31,438
            
            
            
            -
            
            
            
            31,438Redemption
      of partnership interests
            
            
            (7,664
            )
            
            
            (1,132
            )
            
            
            -
            
            
            
            (8,796
            )Income
      allocated to partners
            
            
            37,267
            
            
            
            26,254
            
            
            
            211,167
            
            
            
            274,688Withdrawals
      and distributions
            
            
            (3,477
            )
            
            
            (24,175
            )
            
            
            (132,636
            )
            
            
            (160,288
            )TOTAL
      PARTNERSHIP CAPITALSUBJECT
      TO MANDATORYREDEMPTION,
      SEPTEMBER 26, 2008
            
            
            520,612
            
            
            
            179,062
            
            
            
            765,710
            
            
            
            1,465,384Reserve
      for anticipated withdrawals
            
            
            (33,790
            )
            
            
            (2,079
            )
            
            
            (20,249
            )
            
            
            (56,118
            )Partnership
      capital subject to mandatoryredemption,
      net of reserve for anticipatedwithdrawals,
      September 26, 2008
            
            $
            486,822
            
            
            $
            176,983
            
            
            $
            745,461
            
            
            $
            1,409,266







The
accompanying notes are an integral part of these consolidated financial
statements.
  6
 PART I.
FINANCIAL INFORMATION
 
 Item
      1.
                    Financial Statements,
      continued
 THE
JONES FINANCIAL COMPANIES, L.L.L.P.


CONSOLIDATED STATEMENTS OF CASH
FLOWS


(Unaudited)






Nine
      Months EndedSeptember
      26,
              
              
              September
      28,(Dollars
      in thousands)
              
              2008
              
              
              2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Net income
              
              $
              -
              
              
              $
              -Adjustments to reconcile net income to netcash provided by operating activities:Income before allocations to partners
              
              
              274,688
              
              
              
              401,763Depreciation
              
              
              65,555
              
              
              
              70,940Changes in assets and liabilities:Cash segregated under federal regulations
              
              
              (23,871
              )
              
              
              87,806Securities purchased under agreements to resell
              
              
              (134,000
              )
              
              
              (537,000
              )Net payable to customers
              
              
              466,973
              
              
              
              55,747Net receivable from brokers, dealers andclearing organizations
              
              
              11,503
              
              
              
              (25,337
              )Receivable from mutual funds, insurance companiesand other
              
              
              (3,400
              )
              
              
              (17,444
              )Securities owned, net
              
              
              (48,079
              )
              
              
              46,925Other assets
              
              
              5,359
              
              
              
              8,809Accrued compensation and employee benefits
              
              
              (134,587
              )
              
              
              41,720Accounts payable and accrued expenses
              
              
              (26,029
              )
              
              
              (19,869
              )Net cash provided by operating activities
              
              
              454,112
              
              
              
              114,060CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchase of equipment, property and improvements, net
              
              
              (172,274
              )
              
              
              (81,134
              )Net cash used in investing activities
              
              
              (172,274
              )
              
              
              (81,134
              )CASH
      FLOWS FROM FINANCING ACTIVITIES:Repayment of long-term debt
              
              
              (1,550
              )
              
              
              (2,643
              )Repayment of subordinated debt
              
              
              (14,200
              )
              
              
              (23,200
              )Issuance of partnership interests
              
              
              31,438
              
              
              
              324,008Redemption of partnership interests
              
              
              (8,796
              )
              
              
              (6,199
              )Withdrawals and distributions from partnership capital
              
              
              (282,726
              )
              
              
              (317,290
              )Net cash used in financing activities
              
              
              (275,834
              )
              
              
              (25,324
              )Net increase in cash and cash equivalents
              
              
              6,004
              
              
              
              7,602CASH
      AND CASH EQUIVALENTS,Beginning of period
              
              
              378,141
              
              
              
              311,992End of period
              
              $
              384,145
              
              
              $
              319,594Cash
      paid for interest
              
              $
              51,811
              
              
              $
              56,295NON-CASH
      ACTIVITIESAdditions of equipment, property and improvements in
                accounts payable and accrued expenses
              
              $
              23,931
              
              
              $
              -




The
accompanying notes are an integral part of these consolidated financial
statements.
  7
 PART I.
FINANCIAL INFORMATION
 
 Item
      1.
                    Financial Statements,
      continued
 THE
JONES FINANCIAL COMPANIES, L.L.L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS


(Unaudited)





(Dollars
in thousands, except per unit information)





BASIS
OF PRESENTATION





The Partnership's
Business and Basis of Accounting.The accompanying consolidated financial
statements include the accounts of The Jones Financial Companies, L.L.L.P. and
all wholly-owned subsidiaries (collectively, the "Partnership").  All
material intercompany balances and transactions have been eliminated in
consolidation.  Non-controlling minority interests owned are accounted
for under the equity method.  The results of the Partnership's
subsidiary in Canada for the nine months ended August 31, 2008 and 2007 are
included in the Partnership's consolidated financial statements because of the
timing of the Partnership's financial reporting process.





The
Partnership operates as a single business segment.  The Partnership's
principal operating subsidiary, Edward D. Jones & Co., L.P. ("Edward
Jones"), is comprised of three registered broker-dealers serving individual
investors.  Edward Jones primarily derives its revenues from the
retail brokerage business through the sale of listed and unlisted securities,
insurance products, investment banking and principal transactions, as a
distributor of mutual fund shares, and from revenue related to assets held by
and account services provided to its customers.  Edward Jones conducts
business throughout the United States of America, Canada and the United Kingdom
with its customers, various brokers, dealers, clearing organizations,
depositories and banks.  Edward Jones Trust Company ("EJTC"), a
wholly-owned subsidiary of the Partnership, offers trust services to Edward
Jones customers.





The
consolidated financial statements have been prepared under the accrual basis of
accounting in conformity with accounting principles generally accepted in the
United States of America ("GAAP") which require the use of certain estimates by
management in determining the Partnership's assets, liabilities, revenues and
expenses.  Actual results could differ from these
estimates.





Substantially
all of the Partnership's short-term financial assets and liabilities are carried
at fair value or contracted amounts which approximate fair value.





Under the
terms of the Partnership Agreement, a partner’s capital will be redeemed by the
Partnership in the event of the partner’s death, resignation or
termination.  In the event of the partner’s death, the Partnership
must redeem the partner’s capital within six months.  Limited partners
withdrawing from the Partnership due to termination or resignation are repaid
their capital in three equal annual installments beginning the month after their
resignation or termination.  The capital of general partners resigning
or terminated from the Partnership is converted to subordinated limited
partnership capital.  Subordinated limited partners are repaid their
capital in four equal annual installments beginning the month after their
request for withdrawal of contributed capital.  The Partnership’s
Managing Partner has the discretion to waive these withdrawal
restrictions.  All current and future partnership capital is
subordinate to all current and future liabilities of the Partnership, including
the liabilities subordinated to claims of general creditors.





8
 PART I.
FINANCIAL INFORMATION
 
 Item
      1.
                    Financial Statements,
      continued


The
interim financial information included herein is unaudited.  However,
in the opinion of management, such information includes all adjustments,
consisting primarily of normal recurring accruals, which are necessary for a
fair presentation of the results of interim operations.  Certain prior
period amounts have been reclassified to conform to the current year
presentation.





The
results of operations for the nine months ended September 26, 2008 and September
28, 2007 are not necessarily indicative of the results to be expected for the
full year.  These consolidated financial statements should be read in
conjunction with the Partnership's Annual Report on Form 10-K for the year ended
December 31, 2007.





Revenue
Recognition.Customertransactions are
recorded on a settlement date basis, and the related commissions, principal
transactions, and investment banking revenues are recorded on a trade date
basis.  All other forms of revenue are recorded on an accrual basis in
the period earned.





Commissions
consist of charges to customers for the purchase or sale of securities,
insurance products and mutual fund shares.





Principal
transactions revenue is the result of the Partnership's participation in market
making activities in over-the-counter corporate securities, municipal
obligations, U.S. Government obligations, including general obligations and
revenue bonds, unit investment trusts, mortgage-backed securities and
certificates of deposit.





Investment
banking revenues are derived from the Partnership's underwriting and
distribution of securities on behalf of issuers.





Asset
fees revenue consists primarily of service fees and other revenues received
under agreements with mutual fund and insurance companies based on the
underlying value of the Partnership’s customers’ assets invested in those
companies’ products.  Asset-based revenues related to the
Partnership’s interest in the advisor to the Edward Jones Money Market Fund are
included in asset fees revenue.





Account
and activity fees revenue includes fees received from mutual fund companies for
sub-transfer agent accounting services performed by the Partnership and
self-directed IRA custodian account fees.  It also includes other
activity based revenues from customers, mutual fund companies and insurance
companies.





Interest
and dividend income is earned primarily on margin account balances, cash
equivalents, cash segregated under federal regulations, securities purchased
under agreement to resell, inventory securities and investment
securities.





FAIR
VALUE OF SECURITIES





Inventory
and investment securities owned and securities sold, not yet purchased are
presented at fair value.





Fair
value is defined as the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date. Where available, fair value is based on observable market
prices or parameters, or derived from such prices or parameters.  When
observable prices are not available, the Partnership either uses






9
 PART I.
FINANCIAL INFORMATION
 
 Item
      1.
                    Financial Statements,
      continued







The
Partnership adopted Statement of Financial Accounting Standards ("SFAS") No.
157, Fair Value Measurements ("SFAS 157"), effective for the fiscal year
beginning January 1, 2008.  The adoption of SFAS 157 had no financial
impact on the Partnership's consolidated financial condition, results of
operations, or cash flows.  Beginning January 1, 2008, assets and
liabilities recorded at fair value in the Consolidated Statement of Financial
Condition are categorized based upon the level of judgment associated with the
inputs used to measure their fair value.  Hierarchical levels, defined
by SFAS 157 and directly related to the amount of subjectivity associated with
the inputs to fair valuation of these assets and liabilities, are as
follows:





Level I –
Inputs are unadjusted, quoted prices in active markets for identical assets or
liabilities at the measurement date.





The types
of assets and liabilities categorized as Level I generally are government and
agency securities, equities listed in active markets, unit investment trusts and
investments in publicly traded mutual funds with quoted market
prices.





Level II
– Inputs (other than quoted prices included in Level I) are either directly or
indirectly observable for the asset or liability through correlation with
related market data at the measurement date and for the duration of the
instrument’s anticipated life.





The types
of assets and liabilities categorized as Level II generally are municipal bonds,
mortgage and asset backed securities and corporate debt.





Level III
– Inputs are both unobservable and significant to the overall fair value
measurement.  These inputs reflect management’s best estimate of what
market participants would use in pricing the asset or liability at the
measurement date.  Consideration is given to the risk inherent in the
valuation technique and the risk inherent in the inputs to the
model.





The
Partnership does not have any assets or liabilities categorized as Level
III.





On
October 10, 2008 the Financial Accounting Standards Board issued FSP FAS No.
157-3, "Fair Value Measurements" (FSP FAS 157-3), which clarifies the
application of SFAS No. 157 in an inactive market and provides an example to
demonstrate how the fair value of a financial asset is determined when the
market for that financial asset is inactive.  FSP FAS 157-3 was
effective upon issuance, including prior periods for which financial statements
had not been issued.  The adoption of this standard as of September
26, 2008 did not have any impact on the Partnership's results of operations,
cash flows or financial positions.





10
 PART I.
FINANCIAL INFORMATION
 
 Item
      1.
                    Financial Statements,
      continued


Assets
      at Fair Value as of September 26, 2008In
      thousands
              
              Level
      I
              
              
              Level
      II
              
              
              Level
      III
              
              
              TotalSecurities
      purchased under agreements to resell
              
              $
              729,000
              
              
              $
              -
              
              
              $
              -
              
              
              $
              729,000Securities
      Owned:Inventory Securities:Certificate of Deposit
              
              $
              -
              
              
              $
              41,897
              
              
              $
              -
              
              
              $
              41,897U.S. and Canadian Government and U.S.Agency Obligations
              
              
              5,329
              
              
              
              -
              
              
              
              -
              
              
              
              5,329State and Municipal Obligations
              
              
              -
              
              
              
              81,775
              
              
              
              -
              
              
              
              81,775Corporate Bonds and Notes
              
              
              -
              
              
              
              25,435
              
              
              
              -
              
              
              
              25,435Collateralized Mortgage Obligations
              
              
              -
              
              
              
              2,437
              
              
              
              -
              
              
              
              2,437Equities
              
              
              17,440
              
              
              
              -
              
              
              
              -
              
              
              
              17,440Unit Investment Trusts
              
              
              255
              
              
              
              -
              
              
              
              -
              
              
              
              255Total
      Inventory Securities
              
              $
              23,024
              
              
              $
              151,544
              
              
              $
              -
              
              
              $
              174,568Investment
      SecuritiesU.S.
      government and agency obligations heldby U.S. broker-dealer
              
              $
              21,405
              
              
              $
              -
              
              
              $
              -
              
              
              $
              21,405U.S. and Canadian Government and U.S.agency obligations held by foreignbroker-dealers
              
              
              14,182
              
              
              
              -
              
              
              
              -
              
              
              
              14,182Mutual Funds
              
              
              67,935
              
              
              
              -
              
              
              
              -
              
              
              
              67,935Equities
              
              
              -
              
              
              
              1,053
              
              
              
              -
              
              
              
              1,053Total Investment Securities
              
              $
              103,522
              
              
              $
              1,053
              
              
              $
              -
              
              
              $
              104,575Liabilities
      at Fair Value as of September 26, 2008In
      thousands
              
              Level
      I
              
              
              Level
      II
              
              
              Level
      III
              
              
              TotalCertificate of Deposit
              
              $
              -
              
              
              $
              2,462
              
              
              $
              -
              
              
              $
              2,462U.S. and Canadian Government and U.S.Agency Obligations
              
              
              53
              
              
              
              -
              
              
              
              -
              
              
              
              53State and Municipal Obligations
              
              
              -
              
              
              
              81
              
              
              
              -
              
              
              
              81Corporate Bonds and Notes
              
              
              -
              
              
              
              5,665
              
              
              
              -
              
              
              
              5,665Collateralized Mortgage Obligations
              
              
              -
              
              
              
              11
              
              
              
              -
              
              
              
              11Equities
              
              
              3,753
              
              
              
              -
              
              
              
              -
              
              
              
              3,753Unit Investment Trusts
              
              
              297
              
              
              
              -
              
              
              
              -
              
              
              
              297Total Inventory Securities
              
              $
              4,103
              
              
              $
              8,219
              
              
              $
              -
              
              
              $
              12,322
   PART I.
FINANCIAL INFORMATION
 
 Item
      1.
                    Financial Statements,
      continued
 PARTNERSHIP
CAPITAL SUBJECT TO MANDATORY REDEMPTION





SFAS
No. 150, “Accounting for Certain Financial Instruments with Characteristics
of both Liabilities and Equity,” established standards for classifying and
measuring certain financial instruments with characteristics of both liabilities
and equity.





Since the
Partnership is obligated to redeem a partner’s capital after a partner’s death,
SFAS No. 150 requires all of the Partnership’s equity capital to be classified
as a liability.  Income before allocations to partners prior to the
issuance of SFAS No. 150 was classified on the Partnership's consolidated
statements of income as net income.  These allocations are now
classified as a reduction of income before allocations to partners, which
results in a presentation of $0 net income for the nine month periods ended
September 26, 2008 and September 28, 2007.  The financial statement
presentations required to comply with GAAP do not alter the Partnership’s
treatment of income, income allocations or equity capital for any other
purposes.  In addition, SFAS No. 150 does not have any effect on, nor
is it applicable to, the Partnership’s subsidiaries’ financial
statements.





Net
income, as defined in the Partnership Agreement, is now equivalent to income
before allocations to partners in the consolidated statements of
income.  Such income, if any, for each calendar year is allocated to
the Partnership’s three classes of capital in accordance with the formulas
prescribed in the Partnership Agreement.  First, limited partners are
allocated net income in accordance with the prescribed formula for their share
of net income.  Thereafter, subordinated limited partners and general
partners are allocated any remaining net income based on formulas in the
Partnership Agreement.  Limited partners do not share in the net loss
in any year in which there is net loss and the Partnership is not dissolved or
liquidated.





Partnership
capital subject to mandatory redemption, net of reserve for anticipated
withdrawals, of $1,409,266 consists of $486,822 of limited partnership capital
issued in $1,000 units, $176,983 of subordinated limited partnership capital and
$745,461 of general partnership capital as of September 26, 2008.  The
reserve for anticipated withdrawals consists of current year profits to be
withdrawn within the next 12 months or less.





Limited
partnership capital is held by current and former employees, subordinated
limited partners and general partners of the Partnership.  Limited
partners are guaranteed a minimum 7.5% return on the face amount of their
capital.  Expense related to the 7.5% return was $27,583 and $28,072
for the nine months ended September 26, 2008 and September 28, 2007,
respectively, and is included as a component of interest expense.  The
7.5% return is paid to limited partners regardless of the Partnership’s
earnings.





Subordinated
limited partnership capital is held by current and former general partners of
the Partnership.  Subordinated limited partners receive a varying
percentage of the net income of the Partnership based on their capital
invested.  Subordinated limited partner capital is subordinated to the
limited partnership capital.





NET
CAPITAL REQUIREMENTS





As a
result of its activities as a broker-dealer, Edward Jones is subject to the Net
Capital provisions of Rule 15c3-1 of the Securities Exchange Act of 1934 and the
capital rules of the New York Stock Exchange, Inc. ("NYSE").  Under
the alternative method permitted by the rules, Edward Jones must maintain
minimum Net Capital equal to the greater of $0.250 million or 2% PART I.
FINANCIAL INFORMATION
 
 Item
      1.
                      Financial Statements,
      continued


of
aggregate debit items arising from customer transactions.  The Net
Capital rules also provide that partnership capital may not be withdrawn if
resulting Net Capital would be less than 5% of aggregate debit
items.  Additionally, certain withdrawals require the consent of the
Securities and Exchange Commission ("SEC") to the extent they exceed defined
levels, even though such withdrawals would not cause Net Capital to be less than
5% of aggregate debit items.
 
 At
September 26, 2008, Edward Jones' Net Capital of $789.1 million was 37.6%
of aggregate debit items and its Net Capital in excess of the minimum required
was $684.2 million.  Net capital and the related capital
percentages may fluctuate on a daily basis.
 
 At
September 26, 2008, the Partnership’s foreign broker-dealer subsidiaries and
EJTC were in compliance with regulatory capital requirements in the
jurisdictions in which they operate.
 
 CONTINGENCIES
 
 In the
normal course of business, the Partnership has been named as a defendant in
various legal actions, including arbitrations, class actions and other
litigation.  Certain of these legal actions include claims for
substantial compensatory and/or punitive damages or claims for indeterminate
amounts of damages.  The Partnership also is involved, from time to
time, in investigations and proceedings by governmental and self-regulatory
agencies, certain of which may result in adverse judgments, fines or
penalties.
 
 In view
of the inherent difficulty of predicting the outcome of such matters,
particularly in cases in which claimants seek substantial or indeterminate
damages, or actions which are in very preliminary stages, the Partnership cannot
predict with certainty the eventual loss or range of loss related to such
matters.  The Partnership has determined that it is likely that
ultimate resolution in favor of the plaintiffs will result in losses to the
Partnership on some of these matters, and, as a result, has established
appropriate accruals for potential litigation losses.  Based on
current knowledge and after consultation with counsel, the Partnership believes
that the outcome of these actions will not have a material adverse effect on the
consolidated financial condition of the Partnership, although the outcome could
be material to the Partnership’s future operating results for a particular
period or periods.  For additional discussions, refer to "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included in the Partnership's Annual Report on Form 10-K for the fiscal year
ended December 31, 2007, and "Legal Proceedings" in Part II, Item I of this Form
10-Q.
 
 Also, in
the normal course of business, the Partnership enters into contracts which
contain indemnification provisions, such as purchase contracts, service
agreements, escrow agreements, sales of assets, outsourcing agreements and
leasing arrangements.  Under the provisions of these contracts, the
Partnership may indemnify counterparties to the contracts for certain aspects of
the Partnership's past conduct if other parties fail to perform, or if certain
events occur.  These indemnification provisions will vary based upon
the contract.  The Partnership may in turn obtain indemnifications
from other parties in certain contracts.  These indemnification
provisions are not expected to have a material impact on the Partnership's
consolidated results of operations or financial condition.
  13
 PART I.
FINANCIAL INFORMATION
 
 Item
      1.
                            Financial Statements,
      continued
 COMMITMENTS
  The
Partnership has executed construction agreements for the construction of two
office buildings totaling 575,000 square feet and related parking garages on
land the Partnership owns at its St. Louis, Missouri, North Campus location, a
225,000 square foot addition and parking garage at an existing building at its
St. Louis, Missouri, South Campus location and a parking garage at its Tempe,
Arizona, Campus.
  One of
the buildings and related garage at the North Campus location was substantially
completed in October 2008.  The Partnership estimates that the total
cost of the construction as well as the furniture, fixtures and equipment and
information systems costs related to this building and garage to be $84.5
million.  The Partnership has executed $74.9 million in general,
subcontractor and other vendor commitments related to this building and garage,
of which $49.5 million has been paid as of September 26, 2008.
  The
Partnership estimates that the total cost of the construction agreements as well
as the related furniture, fixtures and equipment and information systems costs
for the other two buildings and three parking garages to be $299.1 million, with
estimated completion dates occurring through 2010.  The Partnership
has executed $231.2 million in general, subcontractor and other vendor
commitments related to the construction of these facilities, of which
$70.8 million has been paid as of September 26, 2008.
  14
   ITEM
      2.
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
      CONDITION


AND
      RESULTS OF OPERATIONS




BASIS OF PRESENTATION





For
internal analysis, the Partnership broadly categorizes its revenues as trade
revenue (revenue from buy or sell transactions on securities) and net fee
revenue (sources other than trade revenue).  In the Partnership’s
Consolidated Statements of Income, trade revenue is comprised of commissions,
principal transactions and investment banking.  Net fee revenue is
comprised of asset fees, account and activity fees, interest and dividends net
of interest expense and other revenues.





RESULTS
OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 26, 2008 AND SEPTEMBER 28,
2007





For the
third quarter of 2008, net revenue decreased 10% ($101.7 million) to $930.4
million, while income before allocations to partners decreased 43% ($55.3
million) to $72.8 million.  The Partnership’s profit margin based on
income before allocations to partners decreased to 7.7% in the third quarter of
2008, from 12.2% in the third quarter of 2007.





The
primary factors contributing to the decline in the Partnership’s net revenues
were reduced trade revenue and net interest income in addition to decreases in
asset fees and other revenue.  Trade revenues were negatively impacted
by a shift in customer dollars invested (the principal amount of customers’ buy
and sell transactions which generate commission revenue) to products with lower
margins while net interest income was reduced due primarily to the interest rate
reductions that have occurred starting in September 2007.  These
reductions were partially offset by increased revenues from account and activity
fees.  Operating expenses increased due primarily to costs associated
with the continued expansion and enhancement of the Partnership's branch office
network, as well as increases in advertising, travel and legal
expenses.  The Partnership added 981 financial advisors during the
twelve months ended September 26, 2008, ending the quarter with 11,900 financial
advisors, an increase of 9% from 10,919 as of September 28, 2007.





Trade
Revenue





Trade
revenue comprised 55% of net revenue for the third quarter of 2008, down from
56% for the third quarter of 2007.  Conversely, net fee revenue
comprised 45% for the third quarter of 2008, up from 44% in the third quarter of
2007.





Trade
revenue of $514.2 million decreased 10% ($58.6 million) during the third quarter
of 2008 compared to the same period in the prior year.  Trade revenue
decreased primarily due to a decrease in margin earned on customer dollars
invested when compared to the third quarter of 2007.  Partially
offsetting the decline in margin was an increase in customer dollars
invested.  The Partnership's margin earned on each $1,000 invested
decreased to $17.80 for the third quarter of 2008 from $20.40 in 2007, primarily
due to a shift from higher margin mutual funds to lower margin municipal bonds
and certificates of deposit.  Total customer dollars invested were
$29.0 billion during the third quarter of 2008, a 4% ($1.0 billion) increase
from the third quarter of 2007.





15
 PART I.
FINANCIAL INFORMATION
 
 Item
      2.
                    Management's
      Discussion and Analysis of Financial Condition and Results of Operations,continued





Commissions
revenue decreased 16% ($71.8 million) for the third quarter of 2008 to
$373.1 million.  Customers invested $15.0 billion in commission
generating transactions in the third quarter of 2008 compared to $17.1 billion
in the third quarter of 2007, a 12% decrease.  Revenue from mutual
fund commissions decreased 25% ($71.5 million) and represented virtually all of
the decrease in commissions revenue.  The following table summarizes
commissions revenue quarter over quarter:




Quarter
      ended (in millions)
 September
      26,
              
              
              September
      28,
              
              
              %2008
              
              
              2007
              
              
              ChangeMutual
      funds
              
              $
              219.2
              
              
              $
              290.7
              
              
              
              (25
              )Equities
              
              
              77.1
              
              
              
              79.6
              
              
              
              (3
              )Insurance
              
              
              76.7
              
              
              
              74.5
              
              
              
              3Corporate
      bonds
              
              
              0.1
              
              
              
              0.1
              
              
              
              -$
              373.1
              
              
              $
              444.9
              
              
              
              (16
              )


Principal
transactions revenue increased 11% ($12.7 million) to $129.9 million during the
third quarter of 2008 due primarily to an increase in customer dollars
invested.  Customers invested $13.6 billion in principal transactions
in the third quarter of 2008 compared to $10.5 billion in the third quarter of
2007, an increase of 30%.  The Partnership’s margin earned on
principal transactions decreased to $9.70 per $1,000 invested during the third
quarter of 2008 from $11.10 during the third quarter of 2007 primarily due to a
shift from higher margin taxable fixed income products to lower margin municipal
bonds and certificates of deposit.  Revenue from municipal bonds
increased 50% ($21.9 million) and certificates of deposit increased 83%
($10.4 million).  Revenue from corporate bonds decreased 33%
($14.6 million), government bonds decreased 47% ($4.4 million), unit investment
trust decreased 10% ($.4 million), and collateralized mortgage obligations
decreased 5% ($.2 million).  The increase in municipal bond revenue
was due to the attractive yields on municipal bonds versus their historic yields
relative to treasury securities.








16
 PART I.
FINANCIAL INFORMATION
 
 Item
      2.
                    Management's
      Discussion and Analysis of Financial Condition and Results of Operations,continued




The
following table summarizes principal transaction revenue quarter over
quarter:




Quarter
      ended (in millions)
 September
      26,
              
              
              September
      28,
              
              
              %2008
              
              
              2007
              
              
              ChangeMunicipal
      bonds
              
              $
              65.3
              
              
              $
              43.4
              
              
              
              50Corporate
      bonds
              
              
              29.0
              
              
              
              43.6
              
              
              
              (33
              )Certificates
      of deposit
              
              
              23.0
              
              
              
              12.6
              
              
              
              83Government
      bonds
              
              
              5.0
              
              
              
              9.4
              
              
              
              (47
              )Collateralized
      mortgage obligations
              
              
              4.1
              
              
              
              4.3
              
              
              
              (5
              )Unit
      investment trusts
              
              
              3.5
              
              
              
              3.9
              
              
              
              (10
              )$
              129.9
              
              
              $
              117.2
              
              
              
              11




Investment
banking revenue increased 5% ($0.5 million) during the third quarter of 2008 to
$11.2 million, due primarily to an increase in municipalofferings.





Net
Fee Revenue





Net fee
revenue, which is fee revenue net of interest expense, decreased 9%
($43.0 million) to $416.1 million during the third quarter of
2008.





Asset
fees decreased 2% ($6.6 million) to $275.9 million due primarily to
decreases in customers' mutual fund and insurance assets, partially offset by
increases in money market revenue due to increases in those
assets.  Average customer mutual fund and insurance assets decreased
$25.9 billion or 8% to $305.0 billion in the third quarter of 2008 compared
to $330.9 billion in the third quarter of 2007.  Average customer
money market assets increased $1.4 billion or 7% to $22.7 billion in the third
quarter of 2008, compared to $21.3 billion in the third quarter of
2007.





Account
and activity fees of $119.5 million increased 6% ($7.2 million) quarter over
quarter.  Revenue received from sub-transfer agent services performed
for mutual fund companies increased 10% ($6.1 million) to $67.1 million,
due to a 12% increase in the number of customer accounts for which the
Partnership provides mutual fund sub-transfer agent services.  In
addition, retirement account fees increased 10% ($2.9 million) to $30.8 million
during the third quarter of 2008, due primarily to a 9% increase in the number
of retirement accounts.





Other
revenue decreased 261% ($14.8 million) quarter over quarter primarily due
to two factors.  The Partnership recognized an unrealized loss of $6.1
million due to declines in the market value of investments related to a
non-qualified deferred compensation plan in the current quarter compared to a
$2.8 million gain in 2007's third quarter.  As a result of the
investments declining in value the Partnership's third quarter compensation and
benefits expense was also reduced by an offsetting $6.1 million and similarly
was increased by $2.8 million in last year's third quarter due to the
investments increasing in market value.  The market value gains or
losses from the investments related to the non-qualified deferred compensation
plan have no net impact on the Partnership's financial performance due the
dollar-for-dollar offsetting increase or decrease in compensation and benefits
expense.






17
 PART I.
FINANCIAL INFORMATION
 
 Item
      2.
                      Management's
      Discussion and Analysis of Financial Condition and Results of Operations,continued




Net
interest and dividend income decreased 49% ($28.9 million) to $29.8 million
during the third quarter of 2008 due primarily to a decrease in interest
rates.  Interest income from cash segregated under federal regulations
and securities purchased under agreements to resell decreased 60%
($17.6 million).  The average funds invested in cash segregated
under federal regulations and securities purchased under agreements to resell
during the third quarter of 2008 was $2.1 billion, compared to $2.2 billion in
the third quarter of 2007.  The average rate earned on these
investments decreased to 1.94% during the third quarter of 2008 from 5.08%
during the third quarter of 2007.  Additionally, while average
customer loan balances increased 12% ($225.2 million) to $2.1 billion during the
third quarter of 2008, interest income from customer loans decreased 28% ($12.1
million).  The decrease was due to reduced interest
rates.  The average rate earned on customer loan balances decreased to
approximately 5.86% during the third quarter of 2008 from approximately 9.06%
during the third quarter of 2007.  Generally, the average interest
rate earned on the Partnership's interest bearing assets was negatively impacted
by the Federal Reserve's reduction in its target Federal Funds Rate from 5.25%
in the third quarter of 2007, to 2.00% at the end of the third quarter
2008.  In addition, interest expense decreased 12% ($2.3 million) to
$17.6 million during the third quarter of 2008 due to lower subordinated and
long-term debt balances.





Operating
expenses decreased 5% ($46.3 million) to $857.5 million during the third quarter
of 2008.  Compensation and benefits costs decreased 10% ($61.9
million) to $575.7 million.  Within compensation and benefits costs,
financial advisor compensation decreased 8% ($27.9 million) due to
decreased revenues, while salary and subsidy increased 27% ($9.3 million)
due to new financial advisor compensation programs as well as increased numbers
of financial advisors participating in those programs.  Variable
compensation, including bonuses and profit sharing paid to financial advisors,
branch office assistants and headquarters associates, which expands and
contracts in relation to revenues, income before allocations to partners and the
Partnership’s related profit margin, decreased 62% ($61.3
million).  Headquarters and branch payroll expense increased 9% ($6.9
million) due to increased salary and benefit costs for existing and additional
personnel support as the Partnership grows its financial advisor
network.  On a full time equivalent basis, the Partnership had 5,253
headquarters associates and 11,929 branch staff associates as of September 26,
2008, compared to 4,659 headquarters associates and 11,165 branch staff
associates as of September 28, 2007.





RESULTS
OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 26, 2008 AND SEPTEMBER 28,
2007





For the
first nine months of 2008, net revenue decreased 3% ($96.6 million) to
$3.0 billion, and income before allocations to partners decreased 32%
($127.1 million) to $274.7 million.  The Partnership’s profit margin
based on income before allocations to partners decreased to 9.1% for the first
nine months of 2008, from 12.9% in the first nine months of 2007.  The
Partnership’s decrease in net revenues was primarily due to reduced trade
revenue, net interest income and other revenue, partially offset by increases in
asset fee revenue and account and activity fee revenue.  Operating
expenses increased due primarily to growth in new financial advisor
compensation, costs associated with the continued expansion and enhancement of
the Partnership's branch office network, as well as increases in advertising,
travel and legal expenses.








18
 PART I.
FINANCIAL INFORMATION
 
 Item
      2.
                    Management's
      Discussion and Analysis of Financial Condition and Results of Operations,continued





Trade
Revenue





Trade
revenue comprised 56% of net revenue for both the first nine months of 2008 and
2007.  Conversely, net fee revenue comprised 44% for both the first
nine months of 2008 and 2007.





Trade
revenue of $1.7 billion decreased 3% ($56.0 million) during the first nine
months of 2008 compared to the same period in the prior year.  The
decrease in trade revenue was due to a decline in the margin earned on overall
customer dollars invested, which was partially offset by an increase in customer
dollars invested.  Total customer dollars invested were
$86.5 billion during the first nine months of 2008, a 4%
($3.1 billion) increase from the first nine months of 2007.  The
Partnership's margin earned on each $1,000 invested decreased to $19.30 for the
first nine months of 2008 from $20.60 in 2007.





Commissions
revenue decreased 12% ($170.7 million) for the first nine months of 2008 to
$1.2 billion.  Commissions revenue decreased year over year due
primarily to a 9% ($4.9 billion) decrease in customer dollars invested in
commission generating transactions to $49.7 billion.  Underlying the
decrease in commissions revenues, mutual fund commissions decreased 18% ($173.8
million) and equity commissions decreased 5% ($12.5
million).  Partially offsetting the decline in commission revenue were
increased insurance commissions of 8% ($15.8 million).





The
following table summarizes commissions revenue year over
year:


Nine
      Months ended (in millions)
 September
      26,
                
                
                September
      28,
                
                
                %2008
                
                
                2007
                
                
                ChangeMutual
      funds
                
                $
                799.2
                
                
                $
                973.0
                
                
                
                (18
                )Equities
                
                
                229.9
                
                
                
                242.4
                
                
                
                (5
                )Insurance
                
                
                217.5
                
                
                
                201.7
                
                
                
                8Corporate
      bonds
                
                
                0.3
                
                
                
                0.5
                
                
                
                (40
                )$
                1,246.9
                
                
                $
                1,417.6
                
                
                
                (12
                )


Principal
transactions revenue increased 36% ($100.0 million) to $381.2 million during the
first nine months of 2008 due primarily to an increase in customer dollars
invested.  Customers invested $35.5 billion in principal transactions
in the first nine months of 2008 compared to $28.0 billion in the first nine
months of 2007.  The Partnership’s margin earned on principal
transactions on each $1,000 invested increased to $10.80 during the first nine
months of 2008 from $10.00 during the first nine months of 2007 primarily due to
a shift into higher margin tax-free fixed income products from lower margin
taxable fixed income products.  Revenue from municipal bonds increased
96% ($93.6 million), certificates of deposit increased 33% ($11.4 million),
and corporate bonds increased 1% ($.8 million), while government bonds
decreased 26% ($5.5 million).  The increase in municipal bond
revenue is due to the attractive yields on municipal bonds versus their historic
yields relative to treasury securities.





19
 PART I.
FINANCIAL INFORMATION
 
 Item
      2.
                    Management's
      Discussion and Analysis of Financial Condition and Results of Operations,continued




The
following table summarizes principal transaction revenue year over
year:




Nine
      Months ended (in millions)
 September
      26,
              
              
              September
      28,
              
              
              %2008
              
              
              2007
              
              
              ChangeMunicipal
      bonds
              
              $
              191.1
              
              
              $
              97.5
              
              
              
              96Corporate
      bonds
              
              
              105.3
              
              
              
              104.5
              
              
              
              1Certificates
      of deposit
              
              
              45.7
              
              
              
              34.3
              
              
              
              33Government
      bonds
              
              
              15.5
              
              
              
              21.0
              
              
              
              (26
              )Unit
      investment trusts
              
              
              12.0
              
              
              
              12.0
              
              
              
              -Collateralized
      mortgage obligations
              
              
              11.6
              
              
              
              11.9
              
              
              
              (3
              )$
              381.2
              
              
              $
              281.2
              
              
              
              36


Investment
banking revenue increased 70% ($14.8 million) during the first nine months of
2008 to $36.1 million, due primarily to an increase in municipal bond
offerings.





Net
Fee Revenue





Net fee
revenue, which is fee revenue net of interest expense, decreased 3% ($40.6
million) to $1.3 billion during the first nine months of 2008.





Asset
fees increased 5% ($37.7 million) to $845.2 million due primarily to
increases in customers' mutual fund and money market assets, partially offset by
decreases in insurance assets.  Average customer mutual fund assets
increased 1% ($2.5 billion) to $276.8 billion in the first nine months of
2008 compared to $274.3 billion in the first nine months of
2007.  Average customer money market assets increased 15% ($3.1
billion) to $23.2 billion in the first nine months of 2008 compared to $20.1
billion in the first nine months of 2007.  Insurance assets decreased
2% ($0.7 billion) to $40.4 billion in the first nine months of 2008 compared to
$41.0 billion in the first nine months of 2007.





Account
and activity fees of $354.1 million increased 8% ($27.5 million) year over
year.  Revenue received from sub-transfer agent services performed for
mutual fund companies increased 12% ($20.4 million) to $197.5
million.  The number of customer accounts for which the Partnership
provides mutual fund sub-transfer agent services increased by 14%.  In
addition, retirement account fees increased 12% ($9.4 million) to $90.1 million
during the first nine months of 2008, due primarily to a 10% increase in the
number of retirement accounts.





Other
revenue decreased 154% ($29.4 million) year over year.  The decrease
between years is primarily attributable to the decrease in value in the
investments related to the non-qualified deferred compensation plan and foreign
currency translation losses.  The investments related to the
non-qualified deferred compensation plan had a loss in the market value of
$13.7 million through September 2008, versus a gain of $9.6 million in the
same period last year, resulting in a $23.3 million decrease in
revenue.  As the market value of the investments related to the
non-qualified compensation plan fluctuate, the gains or losses are reflected in
other revenue.  There is an offsetting decrease in compensation and
benefits expense in the first nine months of 2008.  Each period, the
net impact of the market value fluctuations on the investments supporting the




20
 PART I.
FINANCIAL INFORMATION
 
 Item
      2.
                    Management's
      Discussion and Analysis of Financial Condition and Results of Operations,continued




non-qualified
plan to the Partnership's financial performance is zero.  The
translation of the foreign subsidiary financial statements from local currencies
to dollars resulted in a $5.2 million loss during the first nine months of 2008
compared to a $1.9 million gain in the first nine months of 2007.





Net
interest and dividend income decreased 44% ($76.5 million) to $98.6 million
during the first nine months of 2008 due primarily to a decrease in interest
rates.  Interest income from cash segregated under federal regulations
and securities purchased under agreements to resell decreased 50%
($44.1 million).  The average funds invested in cash segregated
under federal regulations and securities purchased under agreements to resell
during the first nine months of 2008 was $2.3 billion, compared to
$2.2 billion in the first nine months of 2007.  The average rate
earned on these investments decreased to 2.50% during the first nine months of
2008 from 5.16% during the first nine months of 2007.  Additionally,
interest income from customer loans decreased 28% ($36.1 million) to
$94.6 million.  While average customer loan balances in the third
quarter increased 5% ($102.6 million) to $2.0 billion, the average rate
earned on customer loan balances decreased due to the decrease in short-term
interest rates during the past year to approximately 6.31% during the first nine
months of 2008 from approximately 9.11% during the first nine months of
2007.  In addition, interest expense decreased 8% ($4.6 million) to
$55.6 million during the first nine months of 2008 due to lower
subordinated and long-term debt balances.





Operating
expenses increased 1% ($30.5 million) to $2.7 billion during the first nine
months of 2008.  Compensation and benefits costs decreased 2% ($33.6
million) to $1.8 billion.  Within compensation and benefits
costs, sales compensation decreased 2% ($15.3 million) due to decreased trade
revenues, while financial advisor salary and subsidy increased 33%
($30.5 million) due to new financial advisor compensation programs as well
as increased numbers of financial advisors participating in those
programs.  Variable compensation, including bonuses and profit sharing
paid to financial advisors, branch office assistants and headquarters'
associates, which expands and contracts in relation to revenues, income before
allocations to partners and the Partnership’s related profit margin decreased
39% ($110.6 million).  Headquarters salary and benefit expense
increased 12% ($26.0 million) to $244.4 million in the first nine months of
2008.  Branch salary and benefit expense increased 13% ($36.7 million)
to $311.0 million. Salary and benefit costs for existing and additional
personnel increased as the Partnership grows its financial advisor
network.  On a full time equivalent basis, the Partnership had 5,253
headquarters associates and 11,929 branch staff associates as of September 26,
2008, compared to 4,659 headquarters associates and 11,165 branch staff
associates as of September 28, 2007.





Communications
and data processing expense increased 7% ($16.2 million) to $239.6 million in
the first nine months of 2008 due to increased costs related to the continued
expansion and enhancement of the Partnership's branch office network, including
the Partnership's conversion to a terrestrial communications network for its
branches from a satellite network (which was completed in the fall of
2007).





Other
operating expenses increased 19% ($24.8 million) primarily due to increased
legal expense, travel and entertainment, and Managed Account Program ("MAP")
money manager expense due to increased MAP assets and related MAP
revenues.   Legal expenses increased 149% ($6.6 million) during
the first nine months of 2008 due to the reversal of legal expense accruals
during the first nine months of 2007 pertaining to the mutual fund Net Asset
Value




21
 PART I.
FINANCIAL INFORMATION
 
 Item
      2.
                    Management's
      Discussion and Analysis of Financial Condition and Results of Operations,continued




transfer
programs.  See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included in the Partnership's Annual Report
on Form 10-K for the fiscal year ended December 31, 2007, and Part II, Item 1
"Legal Proceedings" in this Form 10-Q for additional discussions on legal
matters and regulatory settlements.





Mutual
Funds and Annuities





There are
regulatory proposals being considered that could significantly impact the
disclosure and potentially the amount of compensation that broker-dealers derive
from mutual funds and annuity products.  The Partnership believes it
is likely in the future that broker-dealers will be required to provide more
disclosure to their clients with respect to payments received by them from the
sales of these products.  It is also possible that such payments may
be restricted by law or regulation.  For additional discussion, refer
to "Item 1A-Risk Factors, Regulatory Initiatives" included in the Partnership's
Annual Report on Form 10-K for the fiscal year ended December 31,
2007.





The
Partnership derived 64% of its total revenue from sales and services related to
mutual fund and annuity products in the first nine months of 2008 and 66% in the
first nine months of 2007.  The Partnership derived 35% of its total
revenue for the first nine months of 2008 and 29% of its total revenue for the
first nine months of 2007 from one mutual fund vendor.  Significant
reductions in the revenues from these mutual fund sources could have a material
impact on the Partnership's results of operations.





LIQUIDITY
AND CAPITAL RESOURCES





The
Partnership's capital subject to mandatory redemption at September 26, 2008,
excluding the reserve for anticipated withdrawals, was $1.4 billion, compared to
$1.3 billion at December 31, 2007.  The increase is
primarily due to the retention of general partner earnings ($58.3 million)
and the issuance of subordinated limited partner interests ($31.4 million),
offset by redemption of limited partner and subordinated limited partner
interests ($7.7 million and $1.1 million, respectively).





At
September 26, 2008, the Partnership had $384.1 million in cash and cash
equivalents.  In addition, the Partnership had $729.0 million in
securities purchased under agreements to resell, which have maturities of less
than one week.  The Partnership also had $1.6 billion in cash
segregated under federal regulations, which was not available for general
use.  Lines of credit are in place aggregating $1.2 billion ($1.1
billion of which is through secured uncommitted lines of credit and $0.1 billion
of unsecured lines of credit).  Actual borrowing availability on the
secured lines is based on customers' margin securities which serve as collateral
on loans.  During the first nine months of 2008, the Partnership
borrowed an average of $1.0 million for twelve days and $26.0 million for one
day.  No amounts were outstanding under these lines of credit at
September 26, 2008 or September 28, 2007.  In the third quarter
of 2008, the Partnership entered into a $120 million revolving unsecured
line of credit which the Partnership plans to use primarily for funding the
construction of the new buildings and parking garages.  The revolving
unsecured line of credit has a final maturity date of August 22,
2010.  To the extent that the Partnership obtains permanent financing
on its South Campus facility currently under construction, such proceeds must be
applied towards the amounts outstanding on the unsecured revolving line of
credit if prior to the final maturity date.   Subsequent to
September 26, 2008, there were two draws on the revolving unsecured line of
credit totaling $19.0 million to fund the construction projects.




22
 PART I.
FINANCIAL INFORMATION
 
 Item
      2.
                    Management's
      Discussion and Analysis of Financial Condition and Results of Operations,continued




The
Partnership believes that the liquidity provided by existing cash balances and
securities purchased under agreements to resell and borrowing arrangements will
be sufficient to meet the Partnership's capital and liquidity
requirements.  Depending on conditions in the capital markets and
other factors, the Partnership will, from time to time, consider the issuance of
debt, the proceeds of which could be used to meet growth needs or for other
purposes.





The
Partnership's growth has been financed through sales of limited partnership
interests to its employees and existing limited partners, subordinated limited
partnership interests to its current or retiring general partners, retention of
general partner earnings, private placements of subordinated debt, long-term
secured debt and operating leases under which the Partnership rents
facilities.





The
Partnership has executed construction agreements for the construction of two
office buildings totaling 575,000 square feet and related parking garages on
land the Partnership owns at its St. Louis, Missouri, North Campus location, a
225,000 square foot addition and parking garage at an existing building at its
St. Louis, Missouri, South Campus location and a parking garage at its Tempe,
Arizona, Campus.





One of
the buildings and related garage at the North Campus location was substantially
completed in October 2008.  The Partnership estimates that the total
cost of the construction as well as the furniture, fixtures and equipment and
information systems costs related to this building and garage to be $84.5
million.  The Partnership has executed $74.9 million in general,
subcontractor and other vendor commitments related to this building and garage,
of which $49.5 million has been paid as of September 26, 2008.





The
Partnership estimates that the total cost of the construction agreements as well
as the related furniture, fixtures and equipment and information systems costs
for the other two buildings and three parking garages to be $299.1 million, with
estimated completion dates occurring through 2010.  The Partnership
has executed $231.2 million in general, subcontractor and other vendor
commitments related to the construction of these facilities, of which
$70.8 million has been paid as of September 26, 2008.





As of
September 2008, the Partnership has paid a total of $120.3 million in connection
with the construction projects discussed above.  The Partnership plans
to ultimately finance a portion of the buildings subsequent to completion with
permanent financing.  Until permanent financing is obtained, the
Partnership will continue to use existing financial resources including the $120
million revolving line of credit to fund the construction as
needed.





For the
nine months ended September 26, 2008, cash and cash equivalents increased
$6.0 million to $384.1 million.  Cash provided by operating
activities was $454.1 million.  The primary sources of cash provided
by operating activities include income before allocations to partners adjusted
for depreciation expense, net payable to customers, net receivables from
brokers, dealers and clearing organizations, and other assets.  These
increases to cash and cash equivalents were partially offset by increases in
cash segregated under federal regulations, increases in securities purchased
under agreements to resell, securities owned, receivables from mutual funds,
insurance companies and other along with decreases in accrued compensations and
employee benefits and accounts payable and accrued expenses.  Cash


23
 PART I.
FINANCIAL INFORMATION
 
 Item
      2.
                    Management's
      Discussion and Analysis of Financial Condition and Results of Operations,continued




used in
investing activities was $172.3 million consisting of capital expenditures
supporting the growth of the Partnership’s operations and for construction of
new office space as noted above.  Cash used in financing activities
was $275.8 million, consisting primarily of partnership withdrawals and
distributions ($282.7 million), redemption of partnership interests ($8.8
million) and repayment of subordinated debt ($14.2 million) and long-term
debt ($1.6 million), offset by the issuance of partnership interests
($31.4 million).





As a
result of its activities as a broker-dealer, Edward Jones, the Partnership's
principal subsidiary, is subject to the Net Capital provisions of Rule 15c3-1 of
the Securities Exchange Act of 1934 and the capital rules of the
NYSE.  Under the alternative method permitted by the rules, Edward
Jones must maintain minimum Net Capital, as defined, equal to the greater of
$0.250 million or 2% of aggregate debit items arising from customer
transactions.  The Net Capital rules also provide that partnership
capital may not be withdrawn if resulting Net Capital would be less than 5% of
aggregate debit items.  Additionally, certain withdrawals require the
consent of the SEC to the extent they exceed defined levels, even though such
withdrawals would not cause Net Capital to be less than 5% of aggregate debit
items.  At September 26, 2008, Edward Jones' Net Capital of $789.1
million was 37.6% of aggregate debit items and its Net Capital in excess of the
minimum required was $684.2 million.  Net capital and the related
capital percentage may fluctuate on a daily basis.





CRITICAL
ACCOUNTING POLICIES





The
Partnership's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America, which require
judgment and involve estimation processes to determine its assets, liabilities,
revenues and expenses which may affect its results of operations.





Customers'
transactions are recorded on a settlement date basis with the related revenue
and expenses recorded on a trade date basis.  The Partnership may be
exposed to risk of loss in the event customers, other brokers and dealers,
banks, depositories or clearing organizations are unable to fulfill contractual
obligations.  For transactions in which it extends credit to
customers, the Partnership seeks to control the risks associated with these
activities by requiring customers to maintain margin collateral in compliance
with various regulatory and internal guidelines.





Securities
owned and sold, not yet purchased, including inventory securities and investment
securities, are valued at fair value which is determined by using quoted market
or dealer prices.





The
Partnership provides for potential losses that may arise out of litigation,
regulatory proceedings and other contingencies to the extent that such losses
are probable and can be estimated, in accordance with SFAS No. 5, “Accounting
for Contingencies”.  The Partnership regularly monitors its exposures
for potential losses.  The Partnership’s total liability with respect
to litigation and regulatory proceedings represents the best estimate of
probable losses after considering, among other factors, the progress of each
case, the Partnership’s experience and discussions with legal
counsel.





The
Partnership’s periodic evaluation of the estimated useful lives of equipment,
property and improvements is based on the original life determined at the time
of purchase and any events or changes in circumstances that would result in a
change in the useful life.






24
 PART I.
FINANCIAL INFORMATION
 
 Item
      2.
                    Management's
      Discussion and Analysis of Financial Condition and Results of Operations,continued




The
Partnership enters into lease agreements for certain headquarters facilities as
well as branch office locations.  The associated lease expense is
recognized on a straight-line basis over the minimum lease terms.





For
additional discussions of the Partnership’s accounting policies, refer to
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations - Critical Accounting Policies” included in the Partnership's Annual
Report on Form 10-K for the fiscal year ended December 31, 2007.





THE
EFFECTS OF INFLATION





The
Partnership's net assets are primarily monetary, consisting of cash, securities
inventories and receivables less liabilities.  Monetary net assets are
primarily liquid in nature and would not be significantly affected by
inflation.  Inflation and future expectations of inflation influence
securities prices, as well as activity levels in the securities
markets.  As a result, profitability and capital may be impacted by
inflation and inflationary expectations.  Additionally, inflation's
impact on the Partnership's operating expenses may affect profitability to the
extent that additional costs are not recoverable through increased prices of
services offered by the Partnership.





FORWARD-LOOKING
STATEMENTS





This
report on Form 10-Q and, in particular, Management’s Discussion and Analysis of
Financial Condition and Results of Operations, contains forward-looking
statements within the meaning of the federal securities laws.  You can
identify forward-looking statements by the use of the words “believe,” “expect,”
“anticipate,” “intend,” “estimate,” “project,” “will,” “should,” and other
expressions which predict or indicate future events and trends and which do not
relate to historical matters.  You should not rely on forward-looking
statements because they involve known and unknown risks, uncertainties and other
factors, some of which are beyond the control of the
Partnership.  These risks, uncertainties and other factors may cause
the actual results, performance or achievements of the Partnership to be
materially different from the anticipated future results, performance or
achievements expressed or implied by the forward-looking
statements.





Some of
the factors that might cause differences include, but are not limited to, the
following: (1) regulatory actions; (2) litigation; (3) changes in legislation;
(4) actions of competitors; (5) changes in technology; (6) a fluctuation or
decline in the fair value of securities; (7) changes in interest rates; (8)
securities theft; (9) the ability of customers, other broker-dealers, banks,
depositories and clearing organizations to fulfill contractual obligations; and
(10) general economic conditions.  These forward-looking statements
were based on information, plans and estimates at the date of this report, and
we do not undertake to update any forward-looking statements to reflect changes
in underlying assumptions or factors, new information, future events or other
changes.





25
 PART I.
FINANCIAL INFORMATION


ITEM
      3.
            QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK





The SEC
issued market risk disclosure requirements to enhance disclosures of accounting
policies for derivatives and other financial instruments and to provide
quantitative and qualitative disclosures about market risk inherent in
derivatives and other financial instruments.  Various levels of
management within the Partnership manage the Partnership’s risk
exposure.  Position limits in trading and inventory accounts are
established and monitored on an ongoing basis.  Credit risk related to
various financing activities is reduced by the industry practice of obtaining
and maintaining collateral.  The Partnership monitors its exposure to
counterparty risk through the use of credit exposure information, the monitoring
of collateral values and the establishment of credit limits.





The
Partnership is exposed to market risk from changes in interest
rates.  Such changes in interest rates impact the income from interest
earning assets, primarily receivables from customers on margin balances, and may
have an impact on the expense from liabilities that finance these
assets.  At September 26, 2008, amounts receivable from customers on
margin balances were $2.1 billion.  Liabilities include amounts
payable to customers and other interest and non-interest bearing
liabilities.





Under
current market conditions and based on current levels of interest earning assets
and the liabilities that finance these assets, the Partnership estimates that a
100 basis point increase in short-term interest rates could increase its annual
net interest income by approximately $21 million.  Conversely,
the Partnership estimates that a 100 basis point decrease in short-term interest
rates could decrease the Partnership’s annual net interest income by up to
$45 million.  A decrease in short-term interest rates has a more
significant impact on net interest income because under the current low interest
rate environment, the Partnership’s interest bearing liabilities are less
sensitive to changes in short-term interest rates compared to its interest
earning assets.





Events
over the past several months including the frozen credit markets and recent
failures of a number of large financial services companies have made the capital
markets increasingly volatile.  The Partnership has not been immune to
the continued weakening economic conditions and market turmoil as evidenced by
the Partnership's weaker financial results during the current year.





ITEM
      4.
            CONTROLS AND
PROCEDURES




Based
upon an evaluation performed as of the end of the period covered by this report,
the Partnership's certifying officers, the Chief Executive Officer and the Chief
Financial Officer, have concluded that the Partnership's disclosure controls and
procedures were effective.





There
have been no changes in the Partnership's last fiscal quarter that have
materially affected, or are reasonably likely to materially affect, the
Partnership's internal control over financial reporting.





26
 PART II. OTHER INFORMATION


ITEM
      1.
            LEGAL
PROCEEDINGS





Wage and Hour Class
Actions.  On June 5, 2008, the U.S. District Court for the
Northern District of Ohio, Eastern Division granted preliminary approval of the
settlements in both national class action cases.  In June 2008, the
Partnership transferred $19 million to an escrow account for the national class
settlement fund, and charged this expense against legal expense accruals that
were established prior to 2008.   Required forms have been mailed
to potential class members, which provide for potential class members to consent
to join the class or be excluded from the settlement.  A final
approval hearing is scheduled with the Court on January 5, 2009.





Financial Industry Regulatory
Authority, Inc. ("FINRA") Official Statement Delivery
Matter.  FINRA has conducted an inquiry into certain
deficiencies the Partnership experienced in the mailing of official statements
in various secondary market transactions in municipal securities during the
period in which delivery of official statements was required.  The
transactions in question, which were reported by the Partnership to the
regulator, involved issues in which the Partnership was not a managing
underwriter or a syndicate member.  FINRA has indicated that it will
seek a censure, fine and the institution of certain new
procedures.  The Partnership is currently in discussions to seek a
prompt resolution of this matter.





The
above-stated information supplements the discussion in Part I, Item 3 "Legal
Proceedings" in the Partnership's Annual Report on Form 10-K for the fiscal year
ended December 31, 2007, the Partnership's Quarterly Report on Form 10-Q for the
quarterly period ended June 27, 2008 and the Partnership's Current Report on
Form 8-K filed on September 8, 2008.





For
additional discussion, see also "Contingencies" in Part I, Item 1, "Financial
Statements" of this Form 10-Q.











27
 PART II.
OTHER INFORMATION


ITEM
      1A.
            RISK FACTORS





There
have been no material changes from the risk factors disclosed on Form 10-K for
the fiscal year ended December 31, 2007.




ITEM
      6.
            EXHIBITS





ExhibitNumber
            Description





3.1*
            
            Sixteenth
      Amended and Restated Agreement of Registered Limited Liability Limited
      Partnership of The Jones Financial Companies, L.L.L.P., dated as of May
      12, 2006, incorporated by reference to Exhibit 3.1 to the Company’s
      Quarterly Report on Form 10-Q for the quarter ended March 31,
      2006.3.2*
            
            Sixteenth
      Restated Certificate of Limited Partnership of the Jones Financial
      Companies, L.L.L.P., dated as of July 21, 2008, as
  amended.3.3*
            
            Form
      of Limited Partnership Agreement of Edward D. Jones & Co., L.P.,
      incorporated by reference to Exhibit 2 to the Company’s Annual Report on
      Form 10-K for the year ended December 31, 1993.31.1**
            
            Certification
      pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 302 of
      the Sarbanes-Oxley act of 2002.31.2**
            
            Certification
      pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 302 of
      the Sarbanes-Oxley act of 2002.32.1**
            
            Certification
      pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of
      the Sarbanes -Oxley act of 2002.32.2**
            
            Certification
      pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of
      the Sarbanes -Oxley act of 2002.





*
Incorporated by reference to previously filed exhibits.


** Filed
herewith








28


SIGNATURES




Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized:





THE
      JONES FINANCIAL COMPANIES,
      L.L.L.P.(Registrant)Date:
      November 7, 2008
            /s/
      James D.
      WeddleJames
      D. Weddle, Chief Executive OfficerDate:
      November 7, 2008
            /s/
      Steven
      NovikSteven
      Novik, Chief Financial Officer