Brokers savage Wood Gundy

Reasons for this may be gleaned from comments CIBC Wood Gundy brokers gave to Investment Executive researchers in this year’s survey. Brokers expressed concern about bureaucracy, lack of branding, the close association with the bank and poor technology.

Some of the areas in which the firm scored lowest among its peers were back-office technology (5.3), client account statements (5.2), availability of fixed-income products (6.3), corporate culture (5.7) and client service (5.5).

One explanation may be the industry-wide decline in revenue. To work around that, the firm has made tough decisions in areas such as advertising, scaling back a proposed national spring campaign, says Tom Monahan, head of CIBC Wood Gundy in Toronto.

“However, we remain committed to the development of our ‘one-to-one’ brand and are actively seeking ways to increase our corporate profile and leverage the CIBC Wood Gundy brand name in markets that are key to our strategic objectives,” he says.

CIBC Wood Gundy brokers should be happy to hear that, in light of the fact that brand awareness and corporate profile constantly came up in the comments as major negatives for the firm.

One broker in southwestern Ontario says: “Clients don’t even know what company I work for; there’s no marketing or branding.”

Many brokers polled complain about CIBC Wood Gundy’s association with the parent bank, suggesting it has too much influence on the brokerage and in many instances overshadows it.

One Ontario broker says: “Some of my clients have had problems with the bank and because of that have threatened to pull their accounts from me.” Another says: “People who have had a bad experience with the bank don’t want to deal with us.”

One reason some have concerns with the CIBC Wood Gundy brand may be explained by the fact that brokers at Merrill Lynch Canada Inc. were absorbed by CIBC Capital Markets Inc.‘s retail division last year. The transition took place last July, with ex-Merrill brokers moving to the CIBC Wood Gundy back-office platform.

In last year’s report card, both sides remained hopeful the transition would be smooth and the firm would improve, taking the best of both worlds. However, some brokers are saying the transition did not go as smoothly as they had hoped, and that may account for Wood Gundy’s low scores in this year’s survey.

As a Toronto broker says: “The best reason to work for Wood Gundy is the free bank account.”

Bureaucracy was cited as a problem at CIBC Wood Gundy more often than any other firm. A Western broker says:
“Something that took one step to complete with Merrill Lynch takes four at CIBC. My clients are hesitant to open an account at Wood Gundy because there are so many forms to fill out.”

In fact, red tape remains a big issue with CIBC Wood Gundy brokers. Many say it is the single worst reason to work for the firm.One Ontario broker says: “I will move firms if we continue to be buried in administration.”

A Quebec broker is more optimistic that things will indeed change: “All the ingredients are there to do a good job; they just need a fire lit under them. It’s a classic Dilbert cartoon of what can happen in bureaucracy.”

While forms and administration seem to be holding CIBC Wood Gundy down in the rankings, they’re not the only thing. Poor technology remains a concern for many CIBC Wood Gundy brokers. A broker in Northern Ontario says: “The technology is really, really bad; the support staff is buried in hierarchy.”

However, things are set to change, says Art Mannarn, deputy head of CIBC Wood Gundy in Toronto. He says the company is making a significant investment in its technology platform for 2003.

“We’re going to ensure that systems provide our investment advisors with the tools and information they need to serve their clients properly. Included in our planned initiatives this year are things such as a new online account-opening system, client statement enhancements and deployment of a mutual fund standing order management system,” he says.