Stifel Buys Into Realm of Independent Financial Advising

Posted by RJ & Makay on February 27, 2015

Independent Advisor, Stern Agee, Stifel Financial

Stifel Buys Into Realm of Independent Financial Advising

Stifel Financial Corp. has bolstered its numbers and reputation, adding the team from Sterne Agee, one of the nation's “oldest and largest” financial service firms. Sterne Agee possesses a strong reputation for institutional services, as well as over 700 financial advisors throughout the United States. 

Stifel Financial announced on February 23, that the firm would acquire Stern Agee through a cash and stock deal at a value of $150 million. Preliminary numbers look good for Stifel, which hopes to increase its annual revenue by some $300-325 million. An approximate value of $175 million will come from the private, independent advisory channel—something new for Stifel Financial.

The Stern Agee acquisition is the first major addition to the team of advisors under the Stifel umbrella since 2009, when SF acquired 495 financial advisors from 56 wealth management branches belonging to UBS Financial Services.

The 730 new advisors joining Stifel as through Stern Agee will increase financial advisor numbers by an impressive 35%. Additionally, 600 of these new advisors function as independents operating in 40 states throughout the union.

Beyond adding successful, veteran advisors to the fold, Stifel has acquired its first advisors operating in independent channels. This a key point the desire of this deal. According to Stifel Chairman and CEO, Ronald Kruszewski, this move is essential for growth potential considering industry demographics and forecast. Said Kruszewski, "This [independent] channel is an important one, one that we've studied and looked at; you need some scale. We think we're going to grow and compete in this channel."

There is no arguing with the ideology. A firm becomes more attractive when boasting a large employee base, as well as an independent platform. This offers potential recruits more options. Ultimately, the acquisition has made Stifel more appealing to the financial advisor who gravitating toward the industry trend of working in an independent channel.

Similarly, Wells Fargo analyst, Christopher Harris, agrees that this is a good move for SF, considering the current trend of financial advisors. In the long run, this move will save Stifel time and money, creating for an efficient influx of proven advisors.

Article Source | Ben Cooper and Junaid Daher 

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