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Smith Barney 2001 Complete Broker Comments

A “I have no complaints.” B (Research): “I don’t think any firm’s research is good. All firms are too tied to companies. Small firms, regional firms, wire houses—only a handful are good.” I think the firm is great. It’s the largest financial firm in the country. The reason I like it is they don’t force you to do their own products. You can pick appropriate funds, manager, and annuities. We have a


“I have no complaints.”


(Research): “I don’t think any firm’s research is good. All firms are too tied to companies. Small firms, regional firms, wire houses—only a handful are good.” I think the firm is great. It’s the largest financial firm in the country. The reason I like it is they don’t force you to do their own products. You can pick appropriate funds, manager, and annuities. We have a one-stop house—you call me if you need mortgage or estate planning. I can hook you up with professionals. In banking, I have access to the right people to put the best people in front of you. The way this economy is, you need a good strong national firm—good ethics, good quality. People expect a lot. If you have a suit on, people look at you as a professional. I’m glad we decided to stay that course [vs. business casual]. A guy’s got a million dollars, and the broker has a golf shirt on, is he going to listen to you? If you wear a suit, there’s a trust level there. It’s a big issue. The newer generation is different. There’s change every day in this business. I need to adjust.”


(Quality of sales assistants): “It’s such a mixed bag.” (Overall): “We try to live up to a higher standard. I think the corporate standard is highly principled.”


“I really like it here. The big problem right now is with cutbacks. They’re stretching resources so thin with sales assistants and operations. Those numbers have changed in the last six months. Once we get out of this [economic] environment, it will get better. There are FC’s—that’s it. Here, an SA covers five or six people.”


(Sales ideas): “I think the ideas we get are very good. I use a great many of them.” (Focus): “They are focused on providing our clients with the highest level of all services needed to meet their financial needs.” (Overall) “They support me and my ability to service my clients through ongoing training, constant updates, a strong support staff and a vast array of products. I have no complaints whatsoever.”


(Hiring/recruiting): “We don’t hire anyone who’s not good. The firm really works hard to attract good quality people, not just production people.” (Focus): “I'm in total agreement with the firm’s focus which has always been and continues to be towards fee based rather than transactional.” (Overall): “They know how to make money! They have real good money managers with good performance track records. Our firm’s number one in the industry in managed money. It’s probably industry wide, but it would be nice if they could give us a better economic picture of what’s happening in the market before the fact--sort of keeping us more on top of things so we could see a disaster coming before it drops on our head.”


(Sales ideas): “Our sales ideas are very good, better than the firm I had been with before and better than what I hear from brokers at other firms.” (Overall) “We have a one-stop shop for high net worth clients. We have a Private Wealth Management program that is very good and the combination of Citibank on the banking side and Salomon Smith Barney on the brokerage side gives us a good breadth of products and services. Our weak side is our investment banking, which I feel could be stronger. That would give us more product, more IPOs, etc.”


(Freedom): “Lately I find there is a little more pressure. I think it’s because we have a new branch manager and he is very gong ho about meeting quotas.” (Overall): “What the firm does well is basically give us our independence to run our own business. If we keep our nose clean, don’t get into trouble, they are respectful of the way we run our business. If I have anything negative to say it would be to give us more credible analysts.”


(Training): “As much as we want, as often as we want to go.” (Account statements): “All of them are impossible to read. In light of what’s going on in the market now I don’t really want to trash them unjustly, everyone is probably in the same boat as far as statements.” (Research): “This is probably an over all criticism of the market now and most firms are having this problem, but I’d like to see more clarification of research--what’s going on between analysts and the underwriting involved in many cases.” (Overall): “They offer a wide range of investments to individuals and corporations with the back up of strong sales support. The fact that we have Citigroup and Travelers provides us with the opportunities to have other investment alternatives available to our clients, whether it's mortgages or home equities loans, they do a good job. They don’t pressure us to do any of that but they make us aware that it is available.”


“This is a very entrepreneurial firm with great support. Their emphasis is on fee-based business. They provide us with lots of training and being associated with the big players. Travelers and Citigroup doesn’t hurt either. On the other hand, our benefits and payout could always be better.”


(Payout): “I’d certainly like to have more but I know I have to balance that with what is realistic, at least on the street.” (Focus): “We’re definitely moving more into fee based business and catering to the high net worth client.” (Overall) “Other than wanting to see our payouts increased, I think the firm is doing an over all ok job. They provide us with what we need to do our business and basically leave us alone unless we want their help and input. It works for me.”


(Hiring/recruiting): “I haven’t been impressed with what I’ve seen lately. There has been a high turnover, which says a lot right there.” (Training): “It’s there but it’s not emphasized enough.” (Overall): “They give me the freedom to be entrepreneurial. Their emphasis on fee based and high net worth is strong and very helpful to me and the kind of business I do.”


“The range of products the firm provides is really excellent. The client can get anything--stocks, mutual funds, estate planning, annuities, insurance. There is a strong emphasis on fee based, which works well for me. Their technology is outstanding, I’m looking at my computer screen right now and the list of ideas, suggestions and recommendations is huge. On the other hand, our research department is very weak. We’ve had recommendations for a bunch of telecom stock that were virtually bankrupt before they lowered the rating on them. I think the analysts are stuck on keeping high ratings on these stocks to get mergers and acquisition business in the future and are therefore afraid to lower them. We need to figure out a way to end the conflict of interests and provide us with a more reliable analysis of companies.”


(Sales quotas): “I think they are pretty standard for the industry. It’s just how this business functions.” (Hiring/recruiting): “It’s pretty fair. They hire women, they hire minorities, and they are very good about that.” (Payout): “Probably the highest on the street.” (Overall) “The firm’s good about managing future growth in the market and with clients. They give us what we need to run our own business. They’re pretty innovative. There’s not too much that they don’t do well.


“They do the right thing by their clients, which is remarkable for a firm of this size. We're not blocking out the little guy, or sending him off to a call center like Merrill Lynch does. But they have too many number crunches running things, too many accountants running the company.”


“I've been here four years and the initial training when you start out as a broker here is good, but the ongoing training is mediocre at best. I wish there was more of it. You have to train on your own, and I don't like to self-train. And if I wanted to get training in a specialty like retirement planning or estate planning, it’s not available to me.”


“Senior management’s focus has gotten murky over the past 18 months. Before then, the focus of doing managed money was clear, but these days with the hit we've taken from loss of assets in managed money, it doesn't seem clear where senior management wants the firm to go. At least they're not communicating it well.”


“A side effect of the poor market is that all the firms are putting the screws on, and they're doing that with the sales assistants, through attrition. In other words, when a sales assistant leaves or retires, they're not replacing those people, and it's hurting our ability to do business.”


“I've gone through all the mergers at this firm, and this current firm is the best of the bunch. It's in better shape than it's ever been in before. However, the research here is far from unbiased. Everyone has always known that, but now it seems to be more flagrant than ever before. The industry puts too much faith in research analysts.”


“The technology here is phenomenal. There's more technology available to me than I can understand. The ability to run your business is all built into the system they have. You can screen clients and bring up lists and cross-references. It's nice to know it's all there for us whenever we need it.”


“Their cap plan is a golden handcuff. You buy the firm's stock at a discount, but if you leave, they take all the money, including what you contributed. I don't like that. And there's no match at all with their 401(k) for brokers. Plus, everyone at Citi Group is offered a stock purchase plan, but brokers aren't offered that plan. We're the only group excluded. Even sales assistants can participate, but we can't.”


“We're operating with a skeleton crew here in terms of the number of sales assistants and operations people, as part of this cost efficiency drive going on.”


“There's total freedom here. We're not required to push any proprietary products, although the firm's products are as good or better than any other firm's offerings. And the payout is the highest among all the major firms. But I don't agree with all these cost efficiency programs they've initiated.”


(Fixed income pricing): “This is an area of great abuse throughout the industry. Our firm is no worse than most.” (Overall): “When I started in 1967, a broker was a very important person. Today, the major firms are out for nothing but themselves. It's a very serious problem. Their intent is to take 2 or 3% per year of the assets they manage. Say a client has a quarter of a million dollars, the firm might be taking $5,000 and for what? Some brokers put all a client's assets in mutual funds and charge for managing their money. Most people don't understand the fees that mutual funds charge. Someone pays 2 or 3%, and their money is in mutual funds, which are charging on top of that. Then there are people who call themselves investment advisers who don't have a securities license and can't get one; they're taking people's money and putting it in mutual funds and insurance products and charging people for managing it.”


“I wouldn't work for any other firm. We're the best in the business, and I'll say that even on a bad day! We haven't had two back-to-back years since ‘73 and ‘74 and then after 24 bad months, the market was up over 30%. I think of this as a good buying time.”


“I think that the financial strength of the firm is not only reassuring but is a strategic advantage. Between the capital and the integration of insurance, global banking, asset management and retail distribution, the firm is unique in its ability to take advantage of future global opportunities. This is the first model that really works. I started with Hutton and was with Shearson. There have been many signs, but it's the same office.”


“What the firm is doing especially well is focusing on the future and diversifying the product base.”


“Phenomenal firm. Freedom to make your business grow the way you want it to grow.”


“Very, very happy. I’m in a great office. That’s what makes the difference. Seasoned brokers, good, fair, honest managers. Little higher payouts would be nice.”


“Why am I so happy? It’s a non-pressure firm. We have SSB, Citigroup, Travelers all under one umbrella, and we get paid for everything from home mortgages to medical equipment to mutual funds to managed accounts, you name it. The depth of resources and the quality of the company is what makes this such a good place to work. You see the results in our stock price. We’re not just a brokerage firm anymore. We’re everything financial. I have so many resources under my umbrella that it’s a great place to be. (Benefits): “We have very limited choice with health insurance. We’re in a unique situation here at SSB, where the more money you make the more money you pay for your benefits. That’s not the case at other company I’ve worked for, where you all pay the same, even if you’re the executive VP. The firm realizes we have to cut costs but we’re doing it on the fixed expenses side-paper, paper clips, operations, back room support, things like that.”


“Our strategic focus is off. That is, if we have a strategic focus. For instance, PaineWebber had a full-page ad today saying they think the S&P 500 will be 50% higher a year from today. I don’t think we’re proactive enough to keep the cows in the corral. We should be out there more advertising and marketing, saying everything will be OK soon. SA’s are a very important part of the process, yet we don’t have enough SAs, as is the case at many other firms. All SAs are registered now, but they don’t get any market-based training necessary.”


(Hiring and recruiting): “We have a problem there. This firm will hire virtually anyone. They should be stricter. They should hire more educated, higher quality people vs. car salesmen. It’s still a good place to work. The freedom is the best thing about it, the ability to do my own thing. Payout increases are needed, but we are about the best on the street, so can’t complain too much. The best thing about our compensation is that they’re not lowering it, like some other firms are.”


“The only sales quotas I have are the ones I set for myself. I think this is a terrific firm. I couldn’t be more satisfied.”


“A lot of the things that are happening at this firm, such as cutbacks, are happening all over the industry because of the market. So, I try to put those things aside and be as realistic as I can.”


“I’m satisfied with the firm. The firm offers a 401(k) plan, CAP account and stock purchase plan – lots of tax shelters and the opportunity to invest back in the company. One the company’s major goals are for employees to own as much of the company as possible, and I like that.”


“There’s zero pressure here to sell any product or mutual fund here. That’s not the case at Merrill Lynch.”


“Research could be improved."


(Research) “Wall St. does a bad job, period. It's all based on banking. I think our research is not as good as it could be, but that's just the way the industry works. We're operating within the industry, and the industry is wrong."


"We've got tremendous sales support. There's always somebody to talk to you. Our fixed income pricing could use some improvement. I always seems to have somebody coming at me with a better price.”


“Freedom from pressure is average--not major pressure. A broker would have to be asleep at the wheel not to see all the sales ideas that are put in front of you.”


“The firm is great on helping us help our clients. Operations are excellent--extremely well run. The conflicts between investment banking and research are well documented, but I think we do a good job, probably better than most, in also trying to have other opinions. For example, equity strategists who have their own ideas and are not just conduits for the analysts. Our fixed income is outstanding. We perennially lead the street as No. 1 or 2.”

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