Honest Opinions

The buzz on Wall Street is about the quick pace of change. Retail brokers can't stop talking about Internet trading, falling fees, mergers and their firms' strategies. They are both curious and concerned about what the future holds.In the here and now, however, brokers' gripes remain the same--shrinking payouts, too few sales assistants and questionable hiring practices. Awkward technology and overaggressive

The buzz on Wall Street is about the quick pace of change. Retail brokers can't stop talking about Internet trading, falling fees, mergers and their firms' strategies. They are both curious and concerned about what the future holds.

In the here and now, however, brokers' gripes remain the same--shrinking payouts, too few sales assistants and questionable hiring practices. Awkward technology and overaggressive expansion plans are big worries as well.

For example, at A.G. Edwards, reps like the small-firm feel of their company, but worry growth plans might change that. At the same time, reps lament their slow workstations and say the firm is a bit antiquated about adopting new technology.

Brokers at Salomon Smith Barney love the entrepreneurial culture and Sandy Weill's ability to make them money. But they suffer from his penny-pinching, too. And the size question pops up again: How big is too big for Citigroup?

As usual, reps at Merrill Lynch gush about their firm's image and grumble about skimpy payouts. Some wonder what Merrill is doing by getting into the discount business and cutting fee pricing. Others say the initiatives put the firm on the offensive.

Ratings at PaineWebber are perking up compared with past surveys. Reps note that it helps to have analysts who make them money and a firm that leaves them alone.

At Morgan Stanley Dean Witter, the Morgan Stanley banking and research capability continues to draw compliments. Reps say MSDW's technology leads the pack, while the product pushing has generally subsided.

Everen Securities brokers speak well of the firm but have no clue where things are headed now that it is part of First Union. Will the family atmosphere be lost? And what about improving a weak research effort? Hopefully, First Union won't change a unique advantage Everen reps have--solid sales assistant support.

Likewise, Prudential Securities brokers wonder what will happen when the insurance company goes public. Will the brokerage unit be sold? Meanwhile, the firm is watching its pennies, which is creating analyst turnover. But in the tech area, brokers have no beefs--the firm seems ahead of the curve.

The unique one-person offices and hands-off approach still get raves from brokers at Edward Jones. But the company's big expansion plans are raising eyebrows. Growth is expensive and risks changing the small-town feel.

A.G. EDWARDS

While happy with A.G. Edwards' small-firm, client-friendly atmosphere, brokers at the firm are concerned about keeping pace with change.

CEO Ben Edwards is "a little antiquated" when it comes to adopting new technologies like the Internet, says one broker. The main problem is an overloaded workstation (rated the lowest of any firm), which is why Edwards brokers are excited about the firm's new $100 million system upgrade to be rolled out beginning next year.

The firm's research effort also suffers from a conservative bias, say reps, who want more technology coverage.

Growth is causing other challenges. "I'm just a little bit concerned that we might be getting away from our [small-firm] roots as we get bigger," says a respondent. "[Operations] just can't keep up with all that growth," says another broker, echoing others.

However, Edwards producers rave about lack of sales pressure, the positive attitude at HQ, and the firm's generous 401(k) plan. "It's as close to being independent as you can be while still working for a large firm," notes one rep. "They don't tell you what to do. If you need help, they're there for you," says another.

Edwards has got the most important thing right, concludes an Edwards loyalist: "They put brokers first, which a lot of firms don't do."

FIRM SCORES

Work Environment: Average of Five Items Below 9.00

Freedom from pressure to sell certain products 9.76

Realistic sales quotas 8.98

The firm's hiring and recruiting practices 7.80

Payout 9.10

Benefits 9.38

Support: Average of Eight Items Below 7.95

Sales support 8.04

Quality of sales assistants 7.90

Quantity of sales assistants 7.38

Quality of sales ideas 7.80

Ongoing training 8.16

The quote and information system 7.86

Quality of the firm's operations 8.66

Account statements 7.82

Product: Average of Three Items Below 8.44

Quality of the firm's research 7.90

The firm's fixed-income pricing 8.30

Quality of the products offered 9.12

Management: Average of Four Items Below 8.69

Your branch manager 7.90

The firm's strategic focus 7.86

Overall ethics of the firm 9.74

The firm's image with the public 9.24

EDWARD JONES

Edward Jones brokers are still in love with the firm, but the company's big growth plans are causing concerns and some problems.

The firm wants to double the number of reps and offices in the next five years. That's unrealistic, too expensive and risks the firm's good reputation for supporting brokers, reps report.

"All this growth? Who's paying for it? We are," complains one Jones broker. "The expense, the back office disruption and the general growing pains have to be dealt with," another Jones rep says. Operations suffers from too many new--and inexperienced--bodies. "We have to follow everything through," claims a respondent. And a new, more advanced workstation is faulted for being slower and harder to use than the previous system.

Make no mistake--brokers still rate the firm higher in most categories than competitors. Jones reps claim there is absolutely no pressure to sell certain products, nor are they expected to meet any sales quotas, other than making sure their offices are profitable.

Research, which used to be a sore spot with brokers, now gets generally positive comments. "It's improved dramatically," notes a rep.

While conceding the firm needs to grow, "I miss that small-town feeling," says a long-time Jones producer. Growth hasn't changed the best thing about the firm, though, the rep adds. "I love the autonomy, the ability to work one on one with my clients and not have any pressure to sell."

FIRM SCORES

Work Environment: Average of Five Items Below 9.24

Freedom from pressure to sell certain products 9.94

Realistic sales quotas 9.50

The firm's hiring and recruiting practices 8.92

Payout 8.94

Benefits 8.90

Support: Average of Eight Items Below 8.94

Sales support 9.26

Quality of sales assistants NA

Quantity of sales assistants 9.32

Quality of sales ideas 9.00

Ongoing training 9.22

The quote and information system 8.56

Quality of the firm's operations 8.92

Account statements 8.28

Product: Average of Three Items Below 9.17

Quality of the firm's research 8.88

The firm's fixed-income pricing 9.12

Quality of the products offered 9.50

Management: Average of Four Items Below 9.41

Your branch manager NA

The firm's strategic focus 9.24

Overall ethics of the firm 9.80

The firm's image with the public 9.18

EVEREN SECURITIES

Everen reps wonder if the First Union merger will improve the firm's two weak areas--research and image. And they hope the small-firm feel of Everen won't be lost within a large bank environment.

Research is clearly hurting. Everen received the lowest score of all firms. The problem? Analyst turnover. "It's been a real turmoil" since news of the merger, says one respondent.

Everen also came in last in the public image category. "We don't have an image. It's not a negative image; we just don't have one," says another rep.

Brokers are optimistic the lack of name recognition will no longer be a problem under the First Union banner. "We're going to be First Union, so [image] will go up. That [lack of name recognition] was our biggest negative," says one producer.

Unlike brokers at other firms, many Everen reps seem satisfied with the amount and quality of their sales assistants. And they're fond of the hands-off, close-knit culture of Everen.

"[I'm in] a nice stable branch. We've all been together a long time," says a veteran producer for the firm. Brokers report that the firm lets people grow the way they want, while running a clean shop. "There's not a lot of sex and excitement here," notes another respondent.

How will things change under the bank regime? Reps aren't sure. "A product push may be forthcoming. That's the way [banks] do things," says one broker. But another says, "I think First Union intends to leave us alone." Yet another respondent admits, "I don't have any idea what the repercussions will be."

FIRM SCORES

Work Environment: Average of Five Items Below 8.19

Freedom from pressure to sell certain products 9.66

Realistic sales quotas 8.88

The firm's hiring and recruiting practices 6.98

Payout 7.76

Benefits 7.66

Support: Average of Eight Items Below 7.50

Sales support 7.30

Quality of sales assistants 7.28

Quantity of sales assistants 7.24

Quality of sales ideas 6.72

Ongoing training 7.28

The quote and information system 8.52

Quality of the firm's operations 7.68

Account statements 7.98

Product: Average of Three Items Below 7.12

Quality of the firm's research 5.98

The firm's fixed-income pricing 7.12

Quality of the products offered 8.26

Management: Average of Four Items Below 7.96

Your branch manager 8.00

The firm's strategic focus 7.66

Overall ethics of the firm 9.06

The firm's image with the public 7.10

MERRILL LYNCH

While reps at Merrill Lynch are proud of their firm's image and ethics, they gripe about skimpy payouts (lowest score among all firms) and wonder where the firm is ultimately headed.

You pay a price for being with the biggest--and some say the best--firm. "Maybe we have a lower payout but if you work for Joe Blow Brokerage, it's tough to get people to do business with you," says a Merrill producer.

The big announcement in June that Merrill is getting into the discount business and cutting fee pricing has some reps wondering about the future.

"They're targeting three or four different types of clientele instead of one," complains one rep. "If you want to be the Saks Fifth Avenue or Nordstrom of brokerage, then be that. But don't try to be everything."

Yet the new fee pricing "puts us on the offensive," counters another broker. "It enables us ... to be competitive with anybody."

Brokers at the firm complain about not having enough sales assistants, the quality of trainees, and a back office that's too lean for the volume it handles. Reps also say their analysts have been in a slump lately.

Still, there is a certain swagger that comes with being the biggest firm. One rep boasts: "We're seen as the Evil Empire that controls the galaxy. ... Our brokers produce more. Our image goes a long way."

Sums up one rep: "The strength is in the brand name of the company. ... What I don't like is the lack of sufficient support."

FIRM SCORES

Work Environment: Average of Five Items Below 7.20

Freedom from pressure to sell certain products 7.16

Realistic sales quotas 7.26

The firm's hiring and recruiting practices 7.06

Payout 6.20

Benefits 8.32

Support: Average of Eight Items Below 7.49

Sales support 6.56

Quality of sales assistants 7.32

Quantity of sales assistants 6.34

Quality of sales ideas 7.52

Ongoing training 7.82

The quote and information system 8.96

Quality of the firm's operations 7.70

Account statements 7.72

Product: Average of Three Items Below 8.03

Quality of the firm's research 7.90

The firm's fixed-income pricing 7.34

Quality of the products offered 8.84

Management: Average of Four Items Below 8.28

Your branch manager 7.32

The firm's strategic focus 8.10

Overall ethics of the firm 8.90

The firm's image with the public 8.78

MORGAN STANLEY DEAN WITTER

In the view of its brokers, Morgan Stanley Dean Witter is a far better firm than was Dean Witter alone.

"Morgan Stanley's underwriting really makes a difference," says one rep. "Our research is great and it has given us strong recognition among big investors--they recognize our name," says another broker. Still another says: "Best research in the world. All of our research-based products are fantastic."

Also generating kudos is the firm's technology. "It's as good as it gets," says one respondent.

All is not perfect in MSDW land, however. Many reps criticize back-office support and the lack of sales assistants. Four or five brokers will have to share one sales assistant--"a ridiculous ratio," says one producer. "It's crazy, remarkable," snaps another. Others grumble about the quality of rookies being hired.

And some product pushing continues. "They lean on you a bit," says one rep.

Those black marks aside, the firm has the best of both worlds, MSDW brokers say. "We have the high-end institutional stuff and the mom-and-pop stuff," explains one broker.

"The firm's strategic moves have been right on the money," agrees another MSDW broker. "The merger has exceeded our expectations. I'm looking forward to seeing what happens next."

FIRM SCORES

Work Environment: Average of Five Items Below 7.74

Freedom from pressure to sell certain products 8.02

Realistic sales quotas 8.62

The firm's hiring and recruiting practices 6.74

Payout 6.76

Benefits 8.58

Support: Average of Eight Items Below 7.28

Sales support 6.52

Quality of sales assistants 7.18

Quantity of sales assistants 6.16

Quality of sales ideas 7.50

Ongoing training 7.42

The quote and information system 8.72

Quality of the firm's operations 7.52

Account statements 7.22

Product: Average of Three Items Below 8.33

Quality of the firm's research 9.10

The firm's fixed-income pricing 7.32

Quality of the products offered 8.58

Management: Average of Four Items Below 8.53

Your branch manager 7.36

The firm's strategic focus 8.74

Overall ethics of the firm 9.00

The firm's image with the public 9.00

PAINEWEBBER

PaineWebber brokers say the firm fosters an entrepreneurial spirit, and even has analysts who make them money.

"It's just a good firm to work for--for people who like to run their own business," says one rep.

Complaints are the usual industrywide issues--shrinking payouts, lack of enough sales assistants and questionable hiring practices.

"They're hiring used-car salesmen. ... They would not be the people I would be hiring," says one broker.

A few reps say the lack of any real investment banking product is a negative. But others appreciate the firm's focus on retail.

PaineWebber reps universally praise the firm's research. "PaineWebber analysts do catch things coming off bottoms. Our analysts get paid for how well their ideas work out," says one appreciative broker. "We hire really good stock pickers," confirms another producer.

Like all brokers, PaineWebber reps are anxious about the Internet's impact on the business but approve of their firm's actions. "We're doing the perfect thing," claims one respondent. "Online trading is free to clients [but] managed by a PaineWebber broker. We're not competing with discounters." Adds a firm veteran: "We will be competitive. Online trading will help us solidify our full-service relationships."

Another happy camper sums it up this way: "It's a very entrepreneurial type of firm [with] outstanding research. It's tough to complain about."

FIRM SCORES

Work Environment: Average of Five Items Below 7.99

Freedom from pressure to sell certain products 9.50

Realistic sales quotas 8.90

The firm's hiring and recruiting practices 6.70

Payout 7.14

Benefits 7.70

Support: Average of Eight Items Below 7.44

Sales support 7.36

Quality of sales assistants 7.12

Quantity of sales assistants 6.60

Quality of sales ideas 7.64

Ongoing training 7.16

The quote and information system 8.62

Quality of the firm's operations 7.42

Account statements 7.56

Product: Average of Three Items Below 8.24

Quality of the firm's research 9.10

The firm's fixed-income pricing 7.34

Quality of the products offered 8.28

Management: Average of Four Items Below 8.31

Your branch manager 7.78

The firm's strategic focus 8.08

Overall ethics of the firm 8.88

The firm's image with the public 8.50

PRUDENTIAL SECURITIES

With Prudential Insurance getting set to go public, reps wonder what will happen to Prudential Securities.

"One just has to wonder whether a firm the size of Pru [Securities] has to merge to be able to compete," says one broker. "I have questions about the long-term strategic plan."

Watching the bottom line in anticipation of an offering is causing some problems, notably with research. "It's weak all across the board because so many [analysts] are constantly leaving," says one broker. "They're cutting back on research, not replacing analysts ... all for the sake of the bottom line," echoes another.

A public ownership structure could help, though, by improving benefits and creating stock options, brokers say.

Meanwhile, operations suffers from poor training. "You don't get enough follow up," says one rep.

About the firm's image, some reps still feel the taint from the limited partnership scandal. Others say it gets confused with the parent.

So why work at a firm with generally low scores? Because they like it. "I like that they leave us alone. ... You're free to do what you think is the right thing for your clients," says one rep.

And in the technology area--seemingly the key to the industry's future--Prudential has the right vision. "The firm is spending money to bring us into the next century with technology," gushes one producer. "They are growing with the rest of the world." Reps see the firm's tech efforts, together with its new Advisor fee account, as positioning the company well for the future.

FIRM SCORES

Work Environment: Average of Five Items Below 7.71

Freedom from pressure to sell certain products 8.86

Realistic sales quotas 8.56

The firm's hiring and recruiting practices 6.74

Payout 7.32

Benefits 7.06

Support: Average of Eight Items Below 7.40

Sales support 6.36

Quality of sales assistants 7.08

Quantity of sales assistants 6.44

Quality of sales ideas 6.98

Ongoing training 7.44

The quote and information system 8.94

Quality of the firm's operations 7.42

Account statements 8.52

Product: Average of Three Items Below 7.22

Quality of the firm's research 6.86

The firm's fixed-income pricing 6.72

Quality of the products offered 8.08

Management: Average of Four Items Below 7.89

Your branch manager 8.36

The firm's strategic focus 7.20

Overall ethics of the firm 8.80

The firm's image with the public 7.18

SALOMON SMITH BARNEY

Brokers at Salomon Smith Barney say they love the firm's entrepreneurial culture, but fault the firm for scrimping on support.

Getting both the blame and the credit is Citigroup co-CEO Sandy Weill. "We are always seeking out new things," says one rep. "That's the attitude here. Weill is the reason for that. ... He's one of the smartest guys who ever walked down Wall Street." It helps that reps have made money in Travelers stock. "I looked around at other firms, and no one else compared to Sandy Weill and his ability to allow brokers at the firm to succeed beyond belief," says another Weill fan.

But not everyone is so impressed. "The firm cuts costs at every turn to create more money for its senior management," grumbles one broker. "They're petty compared with other firms." Lack of sales assistant support and bare-bones operations are common complaints among the troops.

The size of parent Citigroup is also raising questions. "To what end are they getting bigger?" asks a respondent. "I'd question how well a larger firm could be managed as opposed to a small one." Adds another critic, "We've gotten so big, I don't think they know where they're going half the time."

But the key ingredients have so far been retained. "I like the firm's entrepreneurial spirit and its integrity," sums up a SSB rep. "There's no sales pressure whatsoever and I think the leadership of the company is exceptional."

FIRM SCORES

Work Environment: Average of Five Items Below 8.56

Freedom from pressure to sell certain products 9.40

Realistic sales quotas 9.12

The firm's hiring and recruiting practices 7.74

Payout 8.28

Benefits 8.28

Support: Average of Eight Items Below 7.78

Sales support 7.32

Quality of sales assistants 7.80

Quantity of sales assistants 7.20

Quality of sales ideas 7.36

Ongoing training 7.84

The quote and information system 8.82

Quality of the firm's operations 7.74

Account statements 8.16

Product: Average of Three Items Below 8.26

Quality of the firm's research 8.06

The firm's fixed-income pricing 8.08

Quality of the products offered 8.64

Management: Average of Four Items Below 8.66

Your branch manager 8.26

The firm's strategic focus 8.54

Overall ethics of the firm 9.04

The firm's image with the public 8.80

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