Ag Edwards - Swot Analysis

Strengths- A.G. Edwards possesses much strength, as a reputable firm that is one of the largest and oldest in the country. The company began in 1887 and now has 700 branches across the US and in Europe, with approximately 16,000 employees. Among those employees, there are 7,000 financial consultants. With so many consultants and locations that are liberally spread out across the US and Europe, it is clear that the company’s advantage is to be able to reach out to a wide array of clients, and therefore have a larger, more diverse client base than smaller firms. A.G. Edwards serves its clients as a broker-dealer, but may act as an investment advisor on designated accounts.

For years, AG Edwards has received employee approval and praise for its down-to-earth work environment and generous benefits. Just recently, Fortune magazine ranked the company 99th out of the 2007 “100 Best Companies to Work For” list (http://money.cnn.com/magazines/fortune/bestcompanies/2007/snapshots/99.html). A company chorus and corporate tickets to baseball games are just a few examples of how the company unites and brings together employees, making them feel appreciated and encouraging them to work hard.

Along with a strong positive work-environment in general, the company’s specialty is training. In order to train all of its future financial consultants, the firm invests an average of $75,000 for the employee’s first five years. An average of $50,000 is spent over the same period to train experienced transfers. Perhaps the reason why they call the program “A.G. Edwards University” is because so much time and effort is spent on training. Employees’ options for the training are flexible; with online and in-person classes available. It is important to note that the company does not just dish out thousands on training and employee rewards for no reason.

As we move forward in our company analysis, it becomes clear that A.G. Edwards recognizes the strong link between happy, knowledgeable employees and customer feedback. It is mentioned on their website (http://www.agedwards.com/public/content/sc/aboutage/careers/fcopps/index.html) that “every employee, from branch support personnel to CEO, is dedicated to providing the highest-quality service -- to our clients and to our financial consultants. And it's been that way for more than 120 years.” Clearly, they see the link between successful customer support and a motivated and qualified staff.

Other related facts about the company that make it so appealing to employees would be its strong attempt to maintain a respectable public image, as many employees have stated that “the firm does not force them to pitch certain mutual funds over others.” (http://registeredrep.com/mag/finance_ag_edwards_quietly/) In addition, A.G. Edwards advisors rated the firm highly for “freedom from pressure to sell certain products,” and the company representatives say the firm also lived up to its reputation of being one of the most ethical firms on Wall Street.

• The wing symbolizes the freedom our financial consultants have to do what's right for our clients.

• The flame reflects our enduring dedication to knowledge and professional integrity.

Fast moving- one of the first companies to go public in the 1970’s.

Weaknesses- Unfortunately, even the most successful-looking companies have their flaws. With any financial company, the question of employees’ ethics seems to always surface. In this particular case, a major flaw on the company’s nearly impeccable record would have to be back in August of 2006, when the company was fined by the NYSE for “abuses in free-based accounts” (http://registeredrep.com/news/NYSE-fines-AGE). What basically happened was after these particular accounts were established; managers weren’t following firm guidelines regarding suitability of the accounts. They were charging annual fees when they should’ve been charging commission-based fees to account holders who rarely made transactions, resulting in more profit for the company. This is highly unethical, and a fine of $900,000 was the result.

Another issue that has come up with the company has been the ethics of a particular branch manager in Georgia, who recommended poor investments to mainly elderly persons from 1995-2001. The manager also executed trades in client accounts without permission. A.G. Edwards was at fault for not having supervised the situation more closely. Because they had not executed appropriate evaluation of the manager’s work, the firm lost $30 million in settlement costs.

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