How the Brokerage Report Card is prepared

Grabbing a broker’s time during the last legs of the RRSP season was by all accounts no easy feat for journalists David Fielding and Lara Hertel. But with persistence and a proverbial carrot to dangle – the survey provides the broker with a chance to speak candidly and anonymously about his or her firm – they managed to cover the Street.

This year there’s a new firm included in our report – Yorkton Securities Inc. – and one that has vanished – Merrill Lynch Canada Inc. However, we didn’t want to ignore Merrill altogether so we tracked former Merrill advisors down at CIBC Wood Gundy, a division of CIBC Capital Markets Inc. and had them complete our survey. We then averaged the former Merrill Lynch broker scores with those of Wood Gundy to come up with an overall score for the newly morphed firm. But we also wanted to look at the two firms separately so we’ve left space further on in our report to take a closer look at how the first few months of the merger have been going.

What we see at this point is generally what happens after an acquisition and during a merger; employees are more critical than they might be otherwise. In last year’s Report Card, Merrill Lynch advisors rated the firm in second place overall, behind only Edward Jones (this year’s highest ranked firm). Had Merrill scores been included separately this year, the firm would have fallen to ninth place, joining many other firms that stumbled this year.

Scores across the board have fallen, even for Edward Jones, the annual stalwart in the survey. The St. Louis-based firm has taken top honours in the survey four out of five years since 1998.

Other notables this year are BMO Nesbitt Burns Inc. whose ratings remained relatively stable over last year’s and which managed to jump from a sixth-place ranking to a third. Canaccord Capital Corp., despite recent rumours of mergers and grid-slashing, has remained constant in one of the top three spots for the past three years, and Yorkton’s début secured a fourth-place finish overall by taking top marks for the corporate finance department, branch managers, freedom and the quality of its Web site.

Advisors are randomly selected from IE’s mailing list and must have a minimum of one year’s experience in the industry. Using a combination of telephone, fax and online questionnaires, we speak with an average of 40 advisors from each firm. We ask them to rate their employer in 28 categories ranging from how they feel about sales support to the firm’s ethics to the quality of research. Scores are on a scale from zero to 10 (poor to excellent). We then average the broker’s ratings in each category and produce a firm’s overall score for that question.

To come up with the IE rating we take the firm’s scores for all categories and average them to determine the highest and lowest-ranked company, then factor in how many times a firm took top marks in a category and adjust its ranking accordingly. IE