So how do brokers really feel about their firms? Many alternately gushed, groaned and gloated. We collect their heartfelt opinions in our exclusive Brokerage Report Card survey.
A year ago when Registered Representative did its Brokerage Report Card survey, the Internet had some reps feeling scared. Online trading firms could do no wrong. Even stalwart full-service providers Merrill Lynch and Morgan Stanley Dean Witter were embarking on new or revamped discount strategies. Full-service brokers' futures seemed uncertain.
That was then. Now reps seem only curious about the impact of technology - not about their careers.
Anxieties about industry consolidation have taken the place of Internet worries. Will they be owned by a bank? A foreign institution?
PaineWebber reps are the best case in point. The merger with UBS Warburg had been announced two months prior to our survey, and PaineWebber reps were wondering about the direction of the firm. It was too soon to tell for sure, but no management changes were imminent, and reps looked forward to more research and syndicate.
Similar uncertainty dogs reps at Prudential Securities who are still waiting for Prudential Insurance to go public. In the meantime, retaining people has been a problem and big recruitment deals cause concerns. But producers rave about the firm's technology.
Change of ownership doesn't mean policy changes. Just ask First Union Securities reps. These former (mostly) Everen brokers say the firm is still in a state of flux and suffers from some operational snafus, but their cherished freedom remains.
At Salomon Smith Barney, the impact of the Citicorp deal translates into confusion about the firm's image. Is it a brokerage? Insurance company? Bank? Whatever you call it, these otherwise happy SSB reps want it known that they're part of Citigroup.
Meanwhile, Morgan Stanley Dean Witter brokers still crow about the 1997 merger of Dean Witter and Morgan Stanley. Research is stronger, most reps say, and they like the strategic direction of the firm.
Retail producers at Merrill Lynch would never want to lose the brand name they all love. The firm's presence and strength in research open doors. Some brokers also report that the firm is lightening up a bit from its traditional heavy-handedness.
A.G. Edwards reps are also protective of their firm's good name and family culture. They sense impending change with the anticipated retirement of CEO Ben Edwards. Meanwhile, gripes about the St. Louis firm being tech-unsavvy have been quieted with the rollout of new workstations.
Across town at Edward Jones, concerns about ambitious expansion plans outweigh fears of being sold. So far, the firm's commitment to old-fashioned values and products remains intact, and Jones brokers like it that way.
Although reps fault A.G. Edwards for being a bit hidebound, no one faults the integrity of the firm and the freedom it offers.
And everyone seems thrilled about the new ClientOne workstations they received this year. Brokers agree the technology upgrade wasn’t a moment too soon. "It’s light-years ahead of what we had," says one producer.
Nevertheless, many complain that management at the firm remains behind the times. For example, Edwards refuses to give new brokers any upfront money, preferring instead to offer higher payouts.
Despite the "excellent working atmosphere," says one producer, "Edwards does not offer enough incentives to people to come here."
And the lack of a strong corporate image is still a sore spot. Brokers feel the firm should be pursuing more advertising and marketing opportunities.
"I think we won’t be independent down the road unless they get a better handle on what’s going on," worries one respondent.
The fact that many of the firm’s branch managers are working their own books also raises some objections. "I don’t believe in a manager being a producer and that’s one of the problems here," another broker says.
But the firm’s conservative approach has advantages. Reps point to a strong compliance record, lack of quotas or proprietary products, and the firm’s genuine concern for clients.Concludes one blissful broker, "It’s so good here that I feel like I’ve died and gone to heaven."--Michael Hayes
Work Environment: Average of Five Items Below 9.21
Freedom from pressure to sell certain products 9.84
Realistic sales quotas 9.42
The firm’s hiring and recruiting practices 8.04
Support: Average of Eight Items Below 8.41
Sales support 8.70
Quality of sales assistants 8.10
Quantity of sales assistants 7.78
Quality of sales ideas 8.20
Ongoing training 8.38
The quote and information system 9.44
Quality of the firm’s operations 8.74
Account statements 7.90
Product: Average of Three Items Below 8.45
Quality of the firm’s research 7.56
The firm’s fixed-income pricing 8.46
Quality of the products offered 9.32
Management: Average of Four Items Below 8.98
Your branch manager 8.22
The firm’s strategic focus 8.66
Overall ethics of the firm 9.74
The firm’s image with the public 9.28
As they have in the past, Edward Jones brokers rave once again about their autonomy.
"The freedom of expression is tremendous," beams one rep. "The situation we have here is fantastic," says another. "We have the ability to conduct our business the way we see fit as long as we follow strict ethical guidelines."
Indeed, reps rate Jones the highest on freedom and ethics at 9.96 and 9.98, respectively--the two highest scores in the entire survey across all eight firms.
Most Jones brokers practice the same mantra. "I do what’s best for the client" is a phrase heard repeatedly among those surveyed. It explains the firm’s conservative stance against online trading.
"We could have made a lot of money off the Internet but we decided it was not in the best interests of our clients," says a respondent.
If Jones reps have a complaint, it’s about the firm’s lack of public image and recognition. "They confuse us with A.G. Edwards," huffs one broker. To address the concern, the firm plans to launch an advertising campaign in 2001, partially funded by fees collected from brokers.
Overexpansion and a slow satellite-based computer system also get some negative comments.
Still, brokers like that Jones emphasizes long-term, quality investments. "We stay away from dot-coms and the latest thing on CNBC," one rep says. "Jones knows the market it is serving."--Tom Nelson
Work Environment: Average of Five Items Below 9.42
Freedom from pressure to sell certain products 9.96
Realistic sales quotas 9.84
The firm’s hiring and recruiting practices 9.26
Support: Average of Eight Items Below 9.11
Sales support 9.38
Quality of sales assistants NA
Quantity of sales assistants 9.30
Quality of sales ideas 9.16
Ongoing training 9.62
The quote and information system 8.82
Quality of the firm’s operations 8.96
Account statements 8.54
Product: Average of Three Items Below 9.21
Quality of the firm’s research 8.76
The firm’s fixed-income pricing 9.24
Quality of the products offered 9.62
Management: Average of Four Items Below 9.59
Your branch manager NA
The firm’s strategic focus 9.60
Overall ethics of the firm 9.98
The firm’s image with the public 9.18
FIRST UNION SECURITIES
Although First Union Securities producers like their independence, their "ownership" of accounts and the lack of pressure, they remain frustrated by a back-office crunch that ensued after Everen Securities’ Chicago operations were consolidated into the Richmond, Va., headquarters.
Reps don’t mince words on this point. "Operations is weak, confused and inefficient," says one producer. The firm has been having a difficult time finding competent help to handle the growing workload, says another rep. "They’re so swamped they’re hiring warm bodies who don’t even know the business," he growls.
Producers also bemoan the bank’s lack of a nationwide presence, especially in the Midwest and West. "We are going to have to work on improving our advertising campaign, especially if we hope to become one of the top players in the industry," says a respondent.
Ongoing training could stand some improvements, as well as the benefits package. "They’re promising us a lot of things as far as benefits but so far I haven’t seen anything," says one rep.
Technology is another story. Producers generally praise the firm for its up-to-date information system. The firm’s fee programs also draw kudos.Not all First Union brokers are dissatisfied with the merger either. Many expect things to settle down and work out well. "I was at Smith Barney when it went through all the mergers," says one happy camper. "I’ve been very impressed with the merger [and] the way [First Union] rolls out programs."--Michael Hayes
Work Environment: Average of Five Items Below 7.87
Freedom from pressure to sell certain products 9.04
Realistic sales quotas 8.60
The firm’s hiring and recruiting practices 6.86
Support: Average of Eight Items Below 7.04
Sales support 6.88
Quality of sales assistants 7.74
Quantity of sales assistants 7.14
Quality of sales ideas 6.55
Ongoing training 6.10
The quote and information system 8.82
Quality of the firm’s operations 6.37
Account statements 6.69
Product: Average of Three Items Below 7.30
Quality of the firm’s research 6.80
The firm’s fixed-income pricing 7.29
Quality of the products offered 7.82
Management: Average of Four Items Below 7.33
Your branch manager 7.17
The firm’s strategic focus 7.22
Overall ethics of the firm 8.84
The firm’s image with the public 6.10
Merrill Lynch brokers appreciate the fact that the Merrill brand name is instantly recognized, and its research is respected. "The best thing about Merrill is that it has a tremendous image and presence," says one broker. "It makes it easy to break the ice with a prospect."
Merrill brokers also love the firm’s progressiveness--its emphasis on financial planning, the addition of banking services to brokerage accounts, its online offerings and fee products. "Unlimited Advantage is a blessing in disguise," says one rep. "It takes every conflict out of the picture."Still, despite the firm’s innovations, brokers gripe about low payouts, workloads, scant training, cost-cutting and the shortage of sales assistants.
The assistants they have are good, "but they’re not paid enough to stay here long," a producer says. "There’s too much cost-cutting. They really need to spend more on training and sales assistants."
Depending on whom you ask, Merrill’s brokerage division might also be a kinder, gentler employer these days. Reps point to less pressure to sell Merrill-brand products and no more financial-plan quotas, thanks to new retail management."It’s letting up somewhat with new management, [although] there’s still some pressure," says one broker.
Another producer agrees, "It’s becoming more broker-friendly." But a third rep hasn’t experienced any softening. "There is a lot of pressure, all the time," he says.--Michael Hayes
Work Environment: Average of Five Items Below 8.03
Freedom from pressure to sell certain products 8.26
Realistic sales quotas 8.02
The firm’s hiring and recruiting practices 7.42
Support: Average of Eight Items Below 7.80
Sales support 7.28
Quality of sales assistants 7.80
Quantity of sales assistants 6.02
Quality of sales ideas 8.00
Ongoing training 8.64
The quote and information system 8.40
Quality of the firm’s operations 7.80
Account statements 8.48
Product: Average of Three Items Below 8.34
Quality of the firm’s research 8.76
The firm’s fixed-income pricing 7.53
Quality of the products offered 8.74
Management: Average of Four Items Below 8.88
Your branch manager 8.29
The firm’s strategic focus 9.08
Overall ethics of the firm 9.36
The firm’s image with the public 8.78
MORGAN STANLEY DEAN WITTER
Morgan Stanley Dean Witter brokers remain charged up by the perceived power of their firm on the Street. Three years after the merger, many still point to its benefits.
"Everyone who was at Dean Witter before the merger feels much better," says one respondent. "There’s a lot more to this company than there used to be. The research is better. The products and services are better. The public image is higher. The internal morale is higher."
In particular, reps repeatedly mention research as their favorite feature of MSDW. "It’s unbiased and they don’t pull any punches with it," says a broker.
Some producers are less enamored with the firm’s commitment to the discount MSDW Online channel. "I don’t like the Internet push," says a respondent. "And I can do without the do-without-your-broker packets they send clients."
Many reps, however, say the firm’s leadership is on the right track. Confides one broker: "I’d hate to see what our stock would do if Phil Purcell retired. He’s a real visionary." Another adds, "The firm is incredibly focused and financially very strong."
MSDW’s weak spot is the same one at other wirehouses. Reps blast the firm for low numbers of sales assistants. The sales assistant issue "is a black eye for us," grumbles one broker. "Low pay and high turnover is not a good combination."
That said, respondents seem pleased overall. "I’m happy as a lark," a broker says. "If I weren’t married, I’d work here 24 hours a day."--Tom Nelson
Work Environment: Average of Five Items Below 8.38
Freedom from pressure to sell certain products 8.50
Realistic sales quotas 9.09
The firm’s hiring and recruiting practices 7.40
Support: Average of Eight Items Below 7.72
Sales support 7.16
Quality of sales assistants 7.42
Quantity of sales assistants 6.58
Quality of sales ideas 7.96
Ongoing training 8.10
The quote and information system 8.98
Quality of the firm’s operations 7.84
Account statements 7.74
Product: Average of Three Items Below 8.84
Quality of the firm’s research 9.26
The firm’s fixed-income pricing 8.26
Quality of the products offered 9.00
Management: Average of Four Items Below 9.02
Your branch manager 8.28
The firm’s strategic focus 8.98
Overall ethics of the firm 9.44
The firm’s image with the public 9.38
The merger with UBS Warburg has left some PaineWebber reps in limbo, wondering about the direction of the firm and their future with it. "It’ll be interesting to see how the merger plays out," says one rep. "UBS will leave the firm’s current management team in place, I believe. I hope they don’t tinker with that."
Adds another: "PaineWebber’s private client group was on track to do some great things before the UBS merger. We’ll see what happens now."
In the meantime, reps are glad to have two things in particular from UBS--more research capability and syndicate. In fact, respondents scored PaineWebber lower on research this year compared with 1999. One broker complains that research used to be much better in years past, so now many reps are looking to UBS for quick improvements.
Brokers would also like some changes in the numbers of sales assistants. "There should be one sales assistant for every two brokers, but the firm doesn’t want to pay for that," says a producer. "So we end up doing more clerical work. And we can’t buy our own sales assistants. The firm won’t let us do that.
"PaineWebber brokers do enjoy their autonomy, however. "The freedom is great here," one respondent says. "No one tells you that you have to sell PaineWebber stocks. No one says you can’t buy something. ... As long as you’re doing business clean and ethically, no one bothers you."--Rick Weinberg
Work Environment: Average of Five Items Below 7.92
Freedom from pressure to sell certain products 9.12
Realistic sales quotas 8.49
The firm’s hiring and recruiting practices 6.92
Support: Average of Eight Items Below 7.24
Sales support 6.92
Quality of sales assistants 7.12
Quantity of sales assistants 6.28
Quality of sales ideas 6.88
Ongoing training 7.44
The quote and information system 8.34
Quality of the firm’s operations 7.26
Account statements 7.64
Product: Average of Three Items Below 7.39
Quality of the firm’s research 7.29
The firm’s fixed-income pricing 6.96
Quality of the products offered 7.91
Management: Average of Four Items Below 8.28
Your branch manager 7.52
The firm’s strategic focus 8.49
Overall ethics of the firm 8.78
The firm’s image with the public 8.34
Technology is the name of the game today. And Prudential Securities is playing the game well, according to its reps.
The firm has "put massive quantities of money into technology," says one broker. "Basically, the firm said, ‘We’re not gonna let anyone get ahead of us in technology. So whatever it takes, we’ll do.’"
In March, it formed a separate technology unit, NetCo, to transform the Prudential Securities Web site, which was to be relaunched by year-end. "Our technology and online capabilities are second to none right now," another rep says.
Technology notwithstanding, Prudential brokers say the firm’s reputation remains tarnished.
"I think we’re still living a little under the cloud of the partnership and insurance problem, although it has gotten dramatically better," says one producer.
But another rep is tired of the whole image discussion. "The firm is a lot better than people perceive it to be," he says. "They base [the bad rap] on things that happened 15 years ago. I wouldn’t be here for 21 years if I didn’t like it."
Reputation isn’t the only problem. Payout is, too. "We’re one of lowest paying firms," complains one respondent. Reps also say retaining people has been a problem.
At the same time, eye-popping recruitment bonuses for new hires became common this year. The ranks don’t much like the message. "They don’t do anything for the old-time brokers," says one veteran. "They spend a lot of money upfront to bring people in. That alienates us old guys."--Rick Weinberg
Work Environment: Average of Five Items Below 7.55
Freedom from pressure to sell certain products 8.70
Realistic sales quotas 8.39
The firm’s hiring and recruiting practices 6.37
Support: Average of Eight Items Below 7.48
Sales support 7.10
Quality of sales assistants 7.20
Quantity of sales assistants 6.63
Quality of sales ideas 7.24
Ongoing training 7.70
The quote and information system 8.48
Quality of the firm’s operations 7.32
Account statements 8.14
Product: Average of Three Items Below 7.01
Quality of the firm’s research 6.82
The firm’s fixed-income pricing 6.32
Quality of the products offered 7.88
Management: Average of Four Items Below 7.70
Your branch manager 7.86
The firm’s strategic focus 7.46
Overall ethics of the firm 8.60
The firm’s image with the public 6.88
SALOMON SMITH BARNEY
Even with powerful Citigroup behind it, Salomon Smith Barney reps say the firm has an identity problem.
"Our image is not as good as it should be," says one rep. "I don’t think the public is as aware of our firm as they are of Merrill Lynch."
There’s some amount of confusion, too. "People wonder if we’re Citigroup, Travelers or Smith Barney," says another rep. "The average guy on the street most likely doesn’t realize that we’re owned by the largest company out there."
But some reps instead focus on what having a sizable parent delivers. "Citigroup has created a powerhouse where clients can access everything they want in terms of financial services," a respondent says. The firm’s managed money program especially draws positive remarks.
Brokers say the success of the firm rests on the shoulders of its CEO. "Sandy Weill is gold," says a rep. "I feel good about the direction he’s taking the firm. I particularly like the firm’s [deferred compensation] CAP plan."
"Sandy Weill has great leadership, great vision," adds another broker. "He really cares about growing the wealth of the firm’s employees, shareholders and clients."
At the same time, some criticize SSB for being tight. "It’s a long process to get things done around here," grumbles one rep. "They watch their pennies."
In particular, brokers say they could use more sales assistants. And some accuse analysts of being too focused on investment banking.--Rick Weinberg
Work Environment: Average of Five Items Below 8.57
Freedom from pressure to sell certain products 9.22
Realistic sales quotas 9.04
The firm’s hiring and recruiting practices 7.51
Support: Average of Eight Items Below 7.77
Sales support 7.68
Quality of sales assistants 7.35
Quantity of sales assistants 6.56
Quality of sales ideas 7.77
Ongoing training 8.04
The quote and information system 8.82
Quality of the firm’s operations 7.86
Account statements 8.04
Product: Average of Three Items Below 8.01
Quality of the firm’s research 7.58
The firm’s fixed-income pricing 7.98
Quality of the products offered 8.48
Management: Average of Four Items Below 8.76
Your branch manager 8.30
The firm’s strategic focus 9.04
Overall ethics of the firm 9.10
The firm’s image with the public 8.60