The 5 Best Full-Service Brokers

May 13, 2011

For the third time in four years, Raymond James earned top honors in SmartMoney magazine's annual ranking of the best full-service brokers, coming in ahead of Edward Jones, Wells Fargo, UBS, Merrill Lynch and Morgan Stanley Smith Barney.

For the third time in four years, Raymond James earned top honors in SmartMoney magazine’s annual ranking of the best full-service brokers, coming in ahead of Edward Jones, Wells Fargo, UBS, Merrill Lynch and Morgan Stanley Smith Barney.

Raymond James’ first-place finish was the result of performing strongly in several categories, including stock picking, the magazine said. The firm was one of only two full-service brokers surveyed whose model portfolios beat Standard & Poor’s 500 stock index for the year.

Each year, SmartMoney magazine ranks the top full-service brokerage firms, using research data from Zacks Investment Research Inc., J.D. Power and Associates, Corporate Insight, DALBAR, Forrester Research and the magazine’s proprietary research. Factors considered in the ranking include the performance of stocks recommended by the firms, studies on customer satisfaction and consultations with experts who study intangibles such as the user-friendliness of financial account statements and websites.

Here's how the Top 5 full-service brokerage firms ranked in tyhe annual SmartMoney survey.

1. Raymond James, St. Petersburg, Fla. (800.248.8863)

Number of Brokers: 4,500

Number of Branches: 1,600

Raymond James overtook Edward Jones to take first place for 2011. Though its stock-picking prowess was the primary reason for receiving the highest honors, the magazine said its score was dinged by its not-so-stellar website.

2. Edward Jones, St. Louis, Mo. (888.891.1491)

Number of Brokers: 12,000

Number of Branches: 11,000

Edward Jones consistently ranks highest in customer satisfaction polls of full-service-brokerage customers by J.D. Power and Associates. “Its survey hailed the firm's emphasis on clearly communicating to clients the reasons for investment performance, something brokers often neglect to do,” according to the magazine. Edward Jones lost out on the top due to its stock picking, which trailed the S&P 500 in 2010. Jim Weddle, managing partner of Edward Jones, told SmartMoney the lagging performance was due to its "conservative investment philosophy" being out of favor in 2010.

3. Wells Fargo Advisors, St. Louis, Mo. (866.224.5708)

Number of Brokers: 15,200

Number of Branches: 1,400

Wells Fargo purchased Wachovia, included its full-service brokerage, during the height of the financial crisis and the company has been able to smoothly integrate customers into its fold. “Wachovia’s clients already have a new website, along with brokerage statements that ranked among the best in independent surveys,” according to SmartMoney. Like Edward James, the brokerage lost points for stock-picking — its model portfolio came in last in a 2010 ranking of brokers by the research firm Zacks Investment Research, trailing the S&P 500 by seven percentage points.

4. UBS, Switzerland (800.354.9103)

Number of Brokers: 6,800

Number of Branches: 300

UBS received high marks for customer satisfaction, and the financial research firm Dalbar said the firm’s brokerage statements are clear and intuitive. But its website was panned by the magazine, “finding its navigation and keyword search lacking.” Jason Chandler, a managing director for private wealth management at UBS, told SmartMoney that many of the firm's financial advisers have their own websites from which customers can link to their account information.

5. Merrill Lynch, New York (800.637.7455)

Number of Brokers: 13,900

Number of Branches: 700

Bank of America’s acquisition of Merrill Lynch in 2009 resulted in hundreds of brokers leaving the firm, SmartMoney reported, and clients appear to be unsettled by the turnover. In a poll by Forrester Research, two out of three Merrill Lynch customers disagreed with the statement: "My financial provider does what's best for me, not just its own bottom line," SmartMoney said. That said, Merrill’s stock-picking performance beat all the other full-service firms in the magazine’s survey, beating the S&P 500 by eight percentage points.

See the complete list of SmartMoney's annual survey of full-service brokers here.