A.G. Edwards: Quietly, the Leader of the Pack

Building on its strong performance from a year ago, A.G. Edwards lit up the scoreboard this year. Edwards FAs rated the firm an impressive 8.8, tying the firm for first place with Edward Jones. Advisors say the St. Louis-based firm has a high-quality work environment, commitment to clients and freedom from pushing certain products.

“The thing I like most about the firm is the freedom advisors have to make the recommendations they feel are most appropriate for their clients,” says one rep in the northeast. “The direction of the firm is shared equally between top administration, brokers, staff and clients,” says another rep. “We all know doing what it is right for the client is right for all of us.”

A.G. Edwards scored the highest in the work environment category, bolstered by the consensus among its reps that the firm does not force them to pitch certain mutual funds over others. Its 9.2 rating was tops among the seven brokerage houses, and well above the average 7.9 score. Within that universe, A.G. Edwards advisors rated the firm a 9.8 for “freedom from pressure to sell certain products.” Another area where the firm excels is setting “realistic sales quotas,” sporting a 9.4 rating, a whole percentage point above the average for participating firms. The company also received plenty of praise for its “payouts” and “benefits,” 9.1 and 9.3, respectively, both of which are improvements from last year.

Company reps say the firm also lived up to its reputation of being one of the cleanest firms on Wall Street, posting a 9.4 in “overall ethics” and a 9.2 in “public image.” The strong endorsement was won despite an ongoing investigation into the firm's sales practices related to IRA accounts. The NASD alleges that some mutual fund companies made extra payments to the firm for preferential treatment. The firm is currently cooperating with regulators to finalize a settlement over the allegations. Earlier this year, the NASD said it would discipline Edwards for suitability and supervisory violations for the sale of B and C shares. But reps say they are clean. “It's a great firm with outstanding ethics,” says one rep.

Other reps cheer the camaraderie and sense of teamwork felt throughout the firm. “Questions and problem resolution are very prompt, and you get answers. People care [here],” one advisor says. Another rep agreed, saying the sense of family and support is a major reason he has been at the firm

But reps complain that they're still not getting enough “sales support” — a complaint lodged by FAs from all firms. Also lacking is the “quality of research.” While A.G. Edwards has made strides in these areas since last year, they remain sources of consternation for many brokers. “Overall, the equity research needs some improvement,” says one rep. Another rep says there is “little sales support” and that his office could use more SAs to cope with an ever-expanding administrative workload. Respondents rated the firm an 8.3 in quality of research and 8.2 for quantity of SAs.

Another hot button issue among its reps is its branding strategy. While its customers and employees enjoy a high level of satisfaction, A.G. Edwards is far from a household name.

“Our advertising program could use a little more professional polishing,” says one rep. But the company has been working aggressively to change this perception, including a $20 million ad campaign that features investors carrying around large eggs. Still some reps are still clamoring for more of presence in the marketplace. “The firm still needs to advertise more,” says a rep who would like to see more regional and local ads. Such grousing is best regarded as quibbling. The fact is A.G. Edwards' reps, on average, seem to be a happy bunch.