Great Expectations

The “Brokerage Report Card” came out in the May 2015 edition of Investment Executive newspaper. As usual there were some surprises in the ‘overall’ and ‘average’ ratings by the responding IA’s but, when considering some of the more critical categories listed the results become a little more interesting.

Given the majority of the published ratings fall between 6’s and 9’s on a 1 – 10 scale, I have examined ten specific categories where the rating fell below an 8. There is nothing magical in this median “average” except that in my industry experience a rating in the 6’s and 7’s always got my attention.

Here then is a quick glance at the results (see chart at end of this article) with the knowledge that all firms in the industry are continuously and conscientiously striving to improve their service offering to their investment advisors. The category commentary speaks only to the importance of the category to IA’s in their day-to-day business life.


Historically, this category always remains on top of the pile. Overall, it can and does include bonus features (stock and reward programs) but, more to the I.A.’s point of view it will reflect how the payout grid gets re-shuffled nearly every year. In certain years the Report Card will reveal an acute sense of irritation for this item.

Technology and Advisor Desk Top

It is truly amazing how the poor ratings in this category continue to appear year after year. When one hears about how the tools of the trade have pushed beyond a broad tape on the wall, one wonders what all the yelling is about. Technology changes so rapidly in the I.A. world that the hue and cry for ‘updating’ remains pretty well constant. Actually, the real question here may be what percentage of brokers really use the services available?

Back Office / Admin. Support

A critically important area in the daily life of an I.A. and how they run and maintain their business. Many of the hard-working folks behind the glass (old expression) are under-appreciated for the services they provide. Too many brokers still do not realize that in this category is the life-blood of their operation. On the other side of the coin is a question of what senior management is doing to consistently update the experience and education of their staff. These support positions fall into a class specifically designed for the securities industry and the needs of people who occupy them (including monetary) need to be addressed.

Branch Manager

Interesting how this vital role has changed, by way of adept toilet-seat management, over the years. Going from a variety of iterations, the role does keep changing with current trends emphasizing larger geographical areas a/o numbers to supervise. Whether it is a regional complex structure housing a salaried complex manager, a compliance manager and a complex administrator for several branches or a non-producing manager for large (50+ brokers) urban branches, the views from the I.A.’s standpoint remain the same. Namely, the traditional conflict of interest in the case of producing managers to the sad lack of touch and feel when faced with a multi-branch complex manager who shows up every couple of months

Succession Planning

The number of ‘NC’s’ that showed up on the Report Card is not only perplexing, it is disturbing. There has been so much written on this subject including in the I.E. newspaper it is amazing at the lack of focus on the part of an overwhelmingly large and aging segment of the broker population. Among the larger firms succession planning is or will become a priority as a means for retaining assets. I.A.’s would be well advised to get in the game before their retirement and succession plan is totally beyond their control.

Strategic Focus, Corporate Culture, Public Image

At some point these three categories kinda/sorta fall into each other. They may not garner the I.A.’s attention to the same degree as support and compensation but, they are very important if, as and when a broker is evaluating the merits of staying with or leaving the firm. Within the Report Card those three categories sported too many -8’s; it behooves ALL firms to recognize how the I.A.’s really feel about the culture in which they operate their business, how the directional focus aligns with their own and how and if their company’s public profile reflects upon then as professional people.

Two Way Communication

Nothing in this business can create more divisions and rancor between I.A.’s and management than the absence of communication. I’ve seen it from both sides and I can assuredly tell you that “the fault dear broker lies not in
the stars, but in management” (deliberate misquote from Bill Shakespeare). Once again there are too many – 8’s in the Report Card and it is up to management at all levels to focus and improve upon this most important element of their business. This retention item is just as important, if not more, as revenue generation.

Final Comments

As a former branch, regional, national manager and president in various firms I can tell you that the Report Card is always anticipated and examined by all firms’ executives. The careers of many can live or die by the results and the results are not simply a number in a category box. Also important is the increase (green) or decrease (red) in the ratings from one year to the next. With this years results it is interesting to note in a couple of instances the number of decreases in category ratings even though a +8 score was maintained. Food for thought!

Finally, hope you enjoy the ‘Poverty Payout’ article which was included as an insert in the S/W Ontario edition of the Investment Executive newspaper, May issue.

Written By: Brian L. Curry, CEO, Curry-Henry Group (Copyright 2015)

“It’s a simple business but, it’s not easy”.

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