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Industry Spotlight > Broker Dealers

How You Picked Them

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As the popularity of the Broker/Dealer of the Year competition has grown, so has scrutiny of the process from reps, home offices, outside observers, and IA readers in general. We thus present full disclosure of the process. Warning: Your eyes may glaze over by the time you reach the third paragraph.

Since 1991, the editors of Investment Advisor have invited their readers who are producing, independent contractor representatives of broker/dealers to rate their own broker/dealers in a number of discrete categories, and provide an overall rating.

This year, as in 2006, all votes were cast online at (in earlier years, we accepted only faxed or mailed ballots). There were 5,799 valid votes cast in the 2007 balloting; in 2006, there were 4,813 valid votes. Balloting was held from June 1, 2007, to July 1, 2007. All prospective voters were required to provide full contact information and provide a numerical rating to their broker/dealer in 14 discrete categories (such as marketing support, compliance, payout, and communications with the home office) and on an overall category, in which we asked them to rate their B/D for its “overall performance and service.”

The validity of a vote is determined by members of the IA editorial staff, who validate that the individual rep’s and broker/dealer’s CRD numbers are valid (using NASD’s BrokerCheck), and were correctly entered on the ballot. Multiple votes by the same person are disallowed. In addition, nearly 150 random voters–including some from each broker/dealer whose reps participated–were contacted by IA staff by telephone to confirm their identities and affiliations.

Then a program is run on the votes that produces an average rating for each B/D, using a formula that gives a stronger weighting to the overall rating category. The B/Ds that receive the highest average rating over all from their reps in 14 separate categories are declared Broker/Dealer of the Year in four divisions. Those four divisions are based on the number of producing reps reported by the B/Ds for the June issue of Investment Advisor as of April 1 of the same year.

In order for a broker/dealer to become eligible to win, a minimum 10% of its producing reps (again, as reported in the June IA directory) must cast valid ballots.

This year, there were 76 broker/dealers listed in our June 2007 directory. Of that number, reps from 42 B/Ds cast valid votes; of those 42, 14 B/Ds did not meet the minimum 10%-of-producing reps threshold.

About halfway through the monthly voting period every year, we alert each broker/dealer’s home office as to whether or not they have reached the 10% threshold. When doing so this year, the editors noted two troubling developments. First, we had heard from many individual reps, and many B/D home office staff, that some voters were confused as to how to mark their ballots, and were worried that they had inadvertently given a low rating when they meant to provide a higher one, or vice versa. The second development was our error: a programming glitch resulted in the voting software application failing to capture consistently the ratings provided by voters on a single category–that of “communications with the home office.”

We urged those confused voters to contact us individually and directly, saying that once we had confirmed their bona fides, we would change their votes at their direction. We also fixed the programming error. But in order to reach additional potentially confused voters, we then sent out an e-mail to all those who had voted as of mid-June, inviting them to confirm their original votes. When only 40% of the original voters came back to their individualized ballot pages at to confirm their original votes, we decided that, rather than penalize any voters, we would accept all valid votes as originally made or that had been confirmed or changed by the voters themselves, and we would exclude the incomplete “communications” ratings from the final scoring formula.

We thank the individual voters for taking the time to vote, and the broker/dealers’ home office staffs for encouraging their representatives to participate.


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