WealthManagement Magazine

First Union Says Back Office Improving

The back office problems at First Union Securities are improving, according to the firm. Last July, First Union instituted $50 fines for departments that do not respond to brokers promptly. But during a 75-day span from late November to the end of January, the firm hasn't tracked a single problem that would've resulted in paying $50, says Paul Costello, chief administrative officer. Responding to

The back office problems at First Union Securities are improving, according to the firm.

Last July, First Union instituted $50 fines for departments that do not respond to brokers promptly. But during a 75-day span from late November to the end of January, the firm hasn't “tracked a single problem that would've resulted in paying $50,” says Paul Costello, chief administrative officer.

Responding to that comment, a West Coast rep says: “If that's the case, then they've raised the bar [on what problems warrant the $50 payoff]. I plan on filing one today.”

Under the Excellence First program, all corporate offices that support producers are required to “return or acknowledge” a broker's phone call within half a day. Failures result in $50 fines. The money goes to the broker experiencing the service shortfall.

Jokingly, brokers are calling it the “Bust Your Buddies Program.”

The West Coast rep complains that the firm is also slow in sending materials. He says he requested information that required a 48-hour turnaround, but got it several days late.

Another rep, based in California, says he had two “time-sensitive” issues that required material being sent to him. “Both times the materials were four days late.”

Costello says some back office problems were predicable in merging with Everen Securities. “We had two separate clearing infrastructures going on one common platform,” he says. “It's been a case of new policies, new procedures, new relationships and getting used to new processes.”

Reps say the firm suffers from more than simple service problems. In one incident, the firm indicated to customers that all their dividends would be reinvested, a statement First Union later retracted.

Even though back office problems persist, “I see the desire to correct them,” says the West Coast broker. “The company is interested in a solution, not just taping it up with a Band-Aid.”

“We view [the program] as an important communications tool to identify issues,” Costello says. “It's true that we received a number of complaints at first. But we now have more compliments coming in than complaints.”

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