The Winner Is Outstanding Advice

Our Outstanding Broker Award winners (see Page 66) come from varied backgrounds and some rather humble upbringings. For these reps, hard work beat out youth, inexperience and lack of connections. Outstanding brokers overcame hurdles to become trusted sources of advice for both investors and other professionals in their communities. How? Someone once told me that a broker's job is to counter the pendulum

Our Outstanding Broker Award winners (see Page 66) come from varied backgrounds and some rather humble upbringings. For these reps, hard work beat out youth, inexperience and lack of connections. Outstanding brokers overcame hurdles to become trusted sources of advice for both investors and other professionals in their communities.

How? Someone once told me that a broker's job is to counter the pendulum of investor psychology — caution against irrational exuberance (someone else's words) and urge action in times of pessimism. Good brokers are always selling what clients don't want to buy.

When we talk to award-winning brokers' clients, they confirm their reps have indeed kept them on an even keel and won their confidence by consistent, outstanding service.

Salaried Brokers

A favorite recurring rumor on Wall Street is that firms want to convert brokers to salaried employees. But so far, it remains a rumor.

That said, salaries do have a place. In fact, recruiters report more interest in steady-paycheck positions. Plus, registered reps working in teams and performing client-service functions say salaried arrangements fit well with what they do (see “The Salaried Stockbroker,” Page 91).

And contrary to what some might claim, a widespread conversion to salaries would not benefit investors. Ben Edwards always made the point that commissioned brokers work for their clients, while salaried reps work for the employers.

Which way do you think is best for clients?

Not to worry. No retail firm can afford to be the first to convert to salaried brokers, so it's likely no firm will.

Selling a Sell Discipline

Like most investors, I don't know why I didn't think about selling. We should have done this month's story, “Selling a Sell Discipline,” Page 59, a year ago.

The article reviews basics of technical analysis and how some reps spot warning signs. Looking at charts is a quick and easy way to get second opinions. What are the markets doing, the sector, the stock? Do you know? Does it fit with the story you're being told?

Trading in and out based on perceived technical patterns will probably do more harm than good. But having a bit of history about where a security has traded or how a sector has performed can give clients the perspective to ignore short-term noise, and stay with their plans and your common-sense advice.

Best of luck,

I Got Your Metrics

Corporate executives are different from you and me. These are the folks whose “vision” is to “break down silos” and create “multiproduct, multiservice disciplines” with the right “business metrics.”

They don't get this stuff from the troops. Some they get from consultants like Mike Herman (see “Compensation Consultant,” Page 105), and the rest maybe from their chums in the executive suites.

Regardless of what spawns these “visions,” the result can be a disconnect between what management says (e.g., “focus on the customer”) and what they often urge you to do (“penetrate by cross-selling”). The “metrics” justify it all.

Hey, I've got the metrics right here: Figure out how to attract and retain decent branch managers. Pay sales assistants well and train them. Give reps team help. Offer real professional education via independent associations and institutions of learning. End product manufacturing. Empower local offices. Go portable, don't compromise on full disclosure, and develop truly modern trading systems.

Forget the spreadsheets. Give brokers and their clients what they need.

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