Jan. 24, 2001 In a brief speech that sounded a lot like a swan song, retiring A.G. Edwards Chairman and CEO Ben Edwards admitted that the firm's adamant refusal to pay upfront bonuses hurt the company's broker recruiting efforts in 2000.
In previous years, Edwards has recruited five new brokers transferring into the firm for every one that left A.G. Edwards, he said during a presentation to analysts today. But in year 2000, "with all the money flowing on Wall Street," A.G. Edwards found itself on the other side of that equation, he said.
"We had to clench our teeth. We don't like to lose good people, but we stuck to our policy," Edwards said. "We're smiling more recently, we're on the positive side again."
Edwards' comments about broker retention, which he made in response to a question from a member of the audience, fit right in with the tone of his speech made before the Q&A session at Salomon Smith Barney's Financial Services Conference at the Plaza Hotel in New York. In typical fashion, Edwards used the opportunity to preach his gospel of a client-centered business model, and said that A.G. Edwards should continue to "focus on constants" while other firms chase the "prevailing wisdom" of the day.
Edwards was especially critical of wirehouse brokers who will only talk to high-net-worth investors and tell others to call their service desks. "Quite a difference from bringing Wall Street to Main Street," he quipped.
Edwards also insisted that brokerage firms should continue to focus on the basics, like human nature.
"Greed and fear remain the two most powerful motivational factors in investment decisions," he said. "My own account looks like a graveyard of bad ideas. We are affected by these very powerful emotions."
So, in typical fashion, Edwards urged brokerage firms to focus on clients’ needs first, rather than slugging it out for market share."What would happen if we had no other goal in our company but to help our clients meet their goals, instead of using our clients to meet our goals?" he asked rhetorically. -- Mike Hayes, Senior Editor For an audio Webcast of Edwards’ presentation, click here: www.veracast.com/ssb2/financial_services_2001/clientaccess/48207209.cfm.
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