WealthManagement Magazine

Wachovia: Back on Track

After a rough couple of years, Wachovia is back in good graces with its brokers. The many integration headaches of the firm's merger with Prudential Securities have finally subsided. Reps polled say management has tackled a number of improvements: Branch organization, sales support and investment research are all better than a year ago. More important, the payout grid, a nagging situation that irked

After a rough couple of years, Wachovia is back in good graces with its brokers. The many integration headaches of the firm's merger with Prudential Securities have finally subsided. Reps polled say management has tackled a number of improvements: Branch organization, sales support and investment research are all better than a year ago. More important, the payout grid, a nagging situation that irked FAs from the beginning of the marriage, was fixed.

In fact, Wachovia brokers are happier with the firm now than they were in 2002, before the merger took place. FAs gave Wachovia substantially better grades this year in almost every category measured by the survey, except for a few. Wachovia's overall grade shot up to 7.9, from 7.2 in 2004, and 7.4 in 2003. That puts it in second place among wirehouses, behind Merrill, and fourth place overall.

“I think the merger between Wachovia and Prudential was a larger undertaking than they perhaps might have considered,” says one Texas-based broker. “And once they sort of got that digested, they could turn their focus on other things. They no longer had to continue putting out fires,” he says. The firm's strategic focus, among other things, is vastly improved, he says, by simple virtue of the fact that the firm finally has the time to implement one.

“Quality of research” got the highest grade of any from Wachovia advisors: 9.2, up from 7.5 last year. Reps note that in the past year, the firm started to offer FAs good independent research from the likes of Sanford Bernstein and Credit Suisse First Boston. “They made it easier to access. It's now a one-stop shop,” says one broker. The next highest grade was awarded to “freedom from pressure to sell certain products,” at 9.1, on par with last year.

Overall, the categories of “support” and “products” did vastly better than last year. In part, a reorganization of some branch offices into branch “complexes” gave a needed boost to sales support, by increasing management oversight and accessibility, the availability of sales assistants and marketing dollars for things like seminars and advertising. Marks for “quality and quantity of sales assistants” and “quality of sales ideas” were up a point or more versus last year.

The resolution of some technology glitches on the firm's platform also resulted in higher grades for the firm's quote and information system. “The system kept shutting down in September of last year,” says one broker. “It was too much at one time. It's just like learning a new language. But that's settled now. People are getting used to it,” he says.

Wachovia reps were also very pleased with the firm's decision to vastly simplify its payout grid. Brokers now get 20 basis points on the first $9,000 in production every month, and 50 basis points on every dollar after that. Also, whereas Prudential brokers used to be paid for their managed business on a quarterly basis, they're now paid monthly. “So it's really simple to understand and gives you a carrot to produce more. Plus the monthly paychecks are more predictable too,” says one broker.

There are a few things that Wachovia advisors gave slightly lower grades to this year: “benefits,” “operations” and “account statements.” On the operations end, brokers can no longer contact operations support people individually; instead everything is routed through a central service desk, which can slow things down when FAs need help on particularly complex cases.

Still, Wachovia reps say they're not sweating the small stuff. Wachovia has put the biggest issues behind it. “That doesn't mean that there aren't issues left, but the firm is being extremely proactive in prioritizing what they can get done and what's most important to getting a lot of the stuff resolved,” says a Texas-based broker.

Wachovia
Score Average, All Firms
Overall Average 7.9 7.8
Work Environment 8.0 7.9
Freedom from pressure to sell certain products 9.1 9.0
Realistic sales quotas 8.4 8.4
Hiring and recruiting practices 7.6 7.8
Payout 7.8 7.3
Benefits 7.1 7.8
Support 7.4 7.5
Sales support 7.0 7.4
Quality of sales assistants 8.1 7.9
Quantity of sales assistants 8.0 7.0
Quality of sales ideas 7.6 7.4
Ongoing training 7.3 7.5
Quote and information system 7.6 8.1
Quality of operations 6.6 7.4
Account statements 6.7 7.4
Product 8.6 7.9
Quality of research 9.2 7.9
Fixed-income pricing 8.4 7.5
Quality of the products offered 8.3 8.3
Management 8.3 7.9
Your branch manager 8.7 8.0
Strategic focus 7.7 7.5
Overall ethics 8.6 8.2
Public image 8.2 7.9
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