Survey Ranks Paine Webber, Prudential Last

Paine Webber Inc. and Prudential Securities Inc., two investment houses that have been in trouble this year with regulators, have also taken a drubbing from their own brokers.

Paine Webber came in last and Prudential next to last in a survey of how brokers at the nation’s nine largest brokerages rated their own firms. The survey was published in the December issue of Registered Representative, a magazine for retail stockbrokers.

Perhaps most embarrassing, Prudential came in last among the nine firms in its brokers’ ratings of the “overall ethics of the firm.”

Prudential is struggling to mend its image after settling Securities and Exchange Commission and multistate charges in October that it defrauded hundreds of thousands of small investors in the 1980s, mainly through sales of about $8 billion in limited partnerships. The brokerage has insisted that any ethical lapses occurred long ago.

“The fact is that the survey was taken in October, a bad emotional month for the firm because it was going through the settlement,” said Prudential spokesman William J. Ahearn.

In any event, he said, “the things that we take the most pride in are things that we tend to rank highly in--things like training.” (In the survey, Prudential ranked third for its training of brokers.)

The firms that drew the best rankings from their brokers were St. Louis-based Edward D. Jones & Co. and A.G. Edwards & Sons.

At each of the nine firms, 50 brokers were asked to rank their employer on a 1-to-10 scale in 20 categories.

Paine Webber scored lowest in training, “quality of the firm’s operations” and how well it pays brokers. The firm ranked fifth in ethics. In February, Paine Webber settled SEC charges that various branch offices around the country had defrauded customers.

Paine Webber spokesman Larry Armour said the survey was flawed because it involved only 50 of the firm’s 5,300 brokers.

Merrill Lynch came in third overall, Dean Witter Reynolds fourth, Kidder Peabody fifth, and Smith Barney Shearson and Kemper Securities tied for sixth.