2001 Brokerage Report Card

Average assets under management

$millions

 

 

2000

2001

Merrill Lynch

48

142

RBC Dominion Securities

66

115

BMO Nesbitt Burns

43

87

TD Evergreen

53

86

CIBC Wood Gundy

71

80

ScotiaMcLeod

61

74

Canaccord

16

47

National Bank Financial

62

37

Raymond James

47

35

Edward Jones

14

4

 

Average

48

71

SOURCE: INVESTMENT EXECUTIVE RESEARCH

This year marks the third time in four years the front line workers at Edward Jones have given their firm top marks, making it the best brokerage to work for. But there’s much controversy in the investment dealer community regarding Edward Jones and its legitimacy atop Investment Executive‘s annual Brokerage Report Card.

Granted, Edward Jones doesn’t operate like a traditional brokerage house. And, on average, its advisors have the least industry experience, have the fewest clients and the smallest books. But does that invalidate their ratings?

We decided to comb through our 400-plus ratings and examine the relationship between an advisor’s experience in the brokerage industry and the number of clients and assets under management. We also wanted to see if experience changed the way advisors answered our survey.

Our number crunching shows that the older you get, the bigger your book, but size and girth only slightly affect your responses to our questions. Fewer years in the industry mean you’re more likely to rate the firm you work for more favourably.

Here’s what the numbers show, based on years’ experience as brokers:

• Less than five years: The average advisor with less than five years’ experience has $36 million in assets under management and 222 clients. His or her average client has $162,000 invested with the advisor.

Scores in all 24 categories rated by brokers average 8.1. Edward Jones advisors have a slightly higher average score of 8.9.

• Five to nine years: On average, an advisor with five to nine years of experience has assets under management of $73 million, more than double those with less than five years of experience. But the number of clients rose to only 291 an advisor. The average client for advisors in this group is worth $250,000.

Overall ratings by the brokers in this category average 7.8, slightly lower than the least-experienced group. Edward Jones brokers in this category followed the rest of the pack, with a lower rating of 8.7, compared with their less experienced colleagues.

• More than 10 years: In the group with the most experience, books climbed to an average of $89 million but the number of clients rose dramatically to 428 per broker, dropping the average client portfolio to slightly more than $200,000.

This group tended to be the toughest on their firms, but when grouped together the average score was 7.8, the same as the middle group. Seasoned veterans with Edward Jones averaged almost 15 years’ experience and gave a rating of 8.8 for their firm, perhaps indicating that people don’t join Edward Jones if they don’t buy into and like the model.

The bottom line: experience and assets have everything to do with one another, but little to do with an advisor’s opinion of his firm. What it may confirm is the age-old saying that money can’t buy happiness. IE