Prophet Market Research and Consulting, which recently made a splash with a survey faulting banks' investment sales practices, is turning its attention to nonbank brokerages.
The San Francisco company, which specializes in undercover audits of financial services companies, last week began its second annual study of sales practices at large full-service brokerages.
The study results should be available in March, according to Prophet executive Lee Lodes.
Prophet will conduct 300 "mystery shops" of brokerage offices around the country, including 25 each at Merrill Lynch & Co., Prudential Securities, Dean Witter Reynolds, A.G. Edwards, Smith Barney, and PaineWebber. Some offices may be shopped several times.
Prophet plans to compare the results of this survey with its findings about bank brokerages, which concluded that banks' compliance with disclosure guidelines and other sales practices has weakened.
"Last year when we compared the two channels, bank brokers received higher scores in educating investors than traditional wire house brokers," Mr. Lodes said. But the surveys also found that bank brokers showed less sales savvy than their nonbank counterparts.