A.G. Edwards has made a big move into fees.
Actually, its brokers made the move. The firm says it is not pushing fee business.
Nevertheless, the average monthly value of client assets in its various fee programs increased to $21.6 billion by the end of May, up from $14.5 billion at the end February 2000 (the firm's fiscal year-end), says spokesperson Rob Donaldson. Fee-based revenues, including trust accounts, generated 24% of the firm's entire revenues in fiscal 2001, up from 19% in fiscal 2000, Donaldson adds.
Although the firm won't reveal any specifics on the number of its fee-based accounts, Donaldson says the number of all fee-based accounts at the firm increased 59% in fiscal 2001. Fee programs at A.G. Edwards include Client Choice (fee-based brokerage), Private Advisor Service (a separate-account management program), A.G. Edwards Asset Management (in-house money manager), and other mutual fund wrap products and trust accounts. Client Choice was launched in March 2000 and has received a lukewarm response from clients, according to several brokers.
Meanwhile, the firm has pushed back the full release of online trading to 2002. The company previously said it would make online trading available in the fall of 2000, but Edwards expects a pilot to begin in December, with a full rollout next year, Donaldson says.
Edwards Bucks Trend — Boosts Work Force
A.G. Edwards' refusal to pay sign-on bonuses, a practice that has hurt the firm's recruiting efforts in the past, may be working a lot better in this turbulent market.
While other firms like Merrill Lynch are losing brokers, A.G. Edwards says its sales force was up about 5% this spring. According to its fiscal first-quarter report, the firm employed 7,179 brokers at the end of May 2001, up from 6,853 total registered reps at the same time last year. And the firm had 701 retail branches operating at the end of May, up from 678 branches last year.
One Edwards broker in the Midwest thinks he knows why.
“All that front money offered by other firms is fading, and brokers are starting to look beyond those bonuses,” he says. In fact, some brokers who took cash upfront are now paying some of it back because they are not meeting performance requirements, says this broker. “We're the ones who are gaining brokers now. We don't have contracts.”
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