The Wealthy Rank the Brokerage Industry
In addition to an overall ranking of brand value, the survey also measured a brand’s “ability to merit a significant price premium,” “the willingness of affluent consumers to recommend the brand to people they care about” and whether consumers felt the brand had increased or decreased in its “status as a premier brokerage over the last 12 months.” Finally, all indices were analyzed with respect to gender, age, income and net worth to further calculate the strengths and weaknesses of each brand.
Ultimately, the overall LBSI numbers awarded to each of the 20 firms on the list don’t differ by wide margins: No. 1-ranked TD Waterhouse (LBSI of 5.57) isn’t far from No. 10-ranked Lehman Brothers (LBSI of 5.41). Says Pedraza: “The scores are close because the industry is fairly commoditized. That said, no one firm dominated every category.” For example, Smith Barney, which ranked second overall with an LBSI of 5.56, ranked seventh in “quality” but shared the No. 1 ranking for “social status” with Oppenheimer (LBSI 5.52, sixth overall). Charles Schwab, the hybrid online/retail broker, ranked third overall, but ninth in social status and 12th in self-enhancement.
An intriguing directional trend noted in the research that should be a wake-up call for all the firms is that nearly all respondents with less than $1 million rated the brokerage firms higher than respondents with more than $1 million. Four firms where this trend was most prominent and statistically significant are Charles Schwab, Fidelity, Merrill Lynch and H&R Block.
Pedraza says the consumer-driven ranking of brokerages is only the beginning. He hopes to be able to poll wealthy consumers about their individual advisors. “It will be a dedicated Web site, a portal where consumers can—for a small fee—rate their advisor and also see the ratings of a few hundred thousand other advisors. It’s coming,” he says.
The top 10 firms from the list of 20 ranked by LBSI are: TD Waterhouse (now known as TD Ameritrade), Smith Barney, Charles Schwab, Fidelity Brokerage, Deutsche Bank, Oppenheimer, UBS, A.G. Edwards, Bear Stearns and Lehman Brothers.
blog comments powered by Disqus
