Archive for February, 2015

AK In The News: Stifel Boosts Advisor Count, Taps Indie Market With Acquisition

Wednesday, February 25th, 2015

I was asked to comment on Stifel Financial’s announced  acquisition of Sterne Agee, particularly on the effect that it will have on asset management firms that work with the two firms. The article appeared in today’s Fundfire (A Financial Times Service).

In general, this seems like a good move for Stifel, as it allows it to pick-up a high quality firm and add a reasonable number of advisors. I say reasonable because it is not the number of advisors that you have that matters – biggest is not best – but the quality. This allows the firm to widen its footprint and solidify its market position.

As with all mergers, the proof will be in how the integration goes – if the firm retains top producers, if they become more efficient and reduce overhead, if costs are contained, etc. Stifel also now is able to enter the independent channel without having to develop their own from scratch. In some cases, buying it is better than building it.

How will the merger affect asset managers that work with the two firms? That is hard to say for sure right now. To quote from the article: “The impact on asset managers distributing through the firm will depend on how integration eventually shakes out, says Andy Klausner, a strategic consultant with AK Advisory Partners. “From the asset manager’s point of view if they can get to more advisors through fewer gatekeepers, that’s always a positive,” Klausner says.

Mergers can provide opportunities for some managers already working with the firms to gain wider distribution with a new group of advisors. But it can also result in some managers losing shelf space.

“This would be an opportunity to look at the product sets of both firms and condense them,” Klausner says. “Let the best platforms survive.”

For managers doing business with the firm, the best approach is likely to wait and see how the integration plays out, he says.”

Any thoughts?