For brokers at Wellington West Capital Inc., it is the best of times. For advisors at First Associates Investments Inc., it could be considered the worst of times.
Indeed, the Brokerage Report Card performances of the two firms are a classic tale of two brokerages.
Brokers at Winnipeg-based Wellington West, a newcomer to this year’s survey, unseated perennial winner Edward Jones from the top spot, while Toronto-based First Associates fell five positions to come in next to last.
Both firms are relatively small players in the industry — Wellington West has 70 brokers; First Associates, 200. But advisors at Wellington West appear much happier with their employer.
Wellington West brokers ranked their firm tops in 16 of the survey’s 27 categories, including a near-perfect score for freedom from pressure to sell product. That’s not a case of rookie enthusiasm — half of the 70 reps at the firm have less than two years’ experience at the company, but none has less than four years in the industry.
It’s a different story at First Associates. It placed tenth out of the 11 firms surveyed this year, and saw scores fall in 24 categories. In 2003, the firm placed fifth.
Both firms say they expect to benefit from the fallout from any bank mergers. But that is where the similarities between the two end.
Scores differed vastly between the firms’ results for sales support (9.6 at Wellington West vs 6.0 at First Associates), advertising (7.4 vs 3.0) and public image (8.8 vs 5.9), despite the fact that Wellington West advisors identified the latter two categories as areas of weakness for the firm.
Wellington West’s assistant/broker ratio has a lot of its reps talking. “Our sales support is one of the best in existence right now,” says one broker. “We have the lowest
assistant/broker rating in Canada,” echoes another. The firm allows an assistant for every $500,000 of production, a system strongly endorsed by chairman and CEO Charlie Spiring. “I’ve always had great success by having good partners around me,” he says. First Associates has set the bar slightly higher for sales support — either after $750,000 in revenue or $50 million in assets.
Advertising was a poor category across the board in this year’s Report Card, no doubt due to the bear market. Spiring hopes a cash injection will strengthen Wellington West’s score in the future; his firm placed second with a rating of 7.4. “We’re tripling our advertising budget in 2004,” he says.
“Our branding still needs a lot of work.”
In addition, 2% of the firm’s gross revenue is distributed directly to advisors for individual marketing initiatives. “People are happy here because they get a say in how some of this money is spent,” says Spiring. “It’s not some turkey in an ivory tower deciding the firm will invest in the ballet or horse racing this year.”
This investment should have a trickle-down effect on the firm’s image with the public, which one Prairie broker describes as “the industry’s best-kept secret.”
As Wellington West works on getting its message out to Eastern Canada (Toronto and Halifax offices opened this year), at First Associates a new training program and the launch of an electronic statements and confirms system are about to be rolled out.
These initiatives are the latest in a wave of changes at the firm.
“We’re really trying to differentiate ourselves,” says Stuart Raftus, First Associate’s president and COO, who took the firm’s reins in September 2003 and quickly rebuilt the senior management team.
Under his administration, the firm unrolled a revamped compensation grid and an integrated managed-account platform. “A lot of positive changes have occurred here,” he says.
Despite the 2004 Brokerage Report Card results, the changes haven’t all gone unnoticed.
A strong in-house team for Canadian research, also assembled by Raftus, has led to a 2004 score of 6.7 in the Canadian research category. This grade is a slight improvement over 2003’s score of 6.4. “Our in-house capabilities have improved dramatically,” Raftus says. The firm continues to outsource its U.S. research through a long-term relationship with Credit Suisse First Boston Corp.
By contrast, Wellington West continues to outsource both Canadian and U.S. research, much to its brokers’ satisfaction.
“Outsourcing is one of our big advantages,” says Spiring, whose brokers rate the firm’s Canadian research at 9.0 and U.S. research at 8.6. “We’re not beholden to an in-house analyst. If we don’t like something Merrill Lynch [& Co. Inc.] does, we throw it out.”