Family Office
E-Trade targets mass affluent
Discount broker goes up market, a bit, with Kobren acquisition.
One day after it said it would buy Harrisdirect from BMO
Financial Group, E-Trade Financial has unveiled plans to acquire
Kobren Insight Management (KIM), a private-client investment
consultancy. E-Trade says the move is intended to strengthen its
hand in the mass-affluent marketplace.
The firms are staying mum about the financial details of the
transaction.
“The acquisition advances [E-Trade’s] regional advisor strategy,
[which offers] personalized wealth-management services to its
retail and corporate services clients with over $250,000 in
assets,” according to an E-Trade press release.
Maybe more
The online broker says the latest acquisition, along with the
Harrisdirect deal and its January 2005 purchase of wealth and
retirement planning firm Howard Capital Management , signals
E-Trade’s “expansion from a trading-focused organization to a
fully-integrated financial services firm that has the unique
opportunity to monetize all aspects of the customer relationship
among its retail and institutional business segments.” It also
pegs the merger with KIM as “the latest in a series of
consolidation initiatives” that “strengthens E-Trade’s influence
among retail investors with sizable assets.” E-Trade adds that it
expects the KIM deal, which is slated to close before the year is
out, to add nearly to $10 million in revenue and $2.3 million in
net income in its fiscal 2006. KIM is the investment advisor to
the Kobren Insight Funds.
“E-Trade Financial seeks to enhance its advice and
wealth-management services by creating high-value tools and
services targeted to each of our retail customer segments,” says
E-Trade president and COO R. Jarrett Lilien. “The acquisition of
[Kobren] will bring customer relationships that can be monetized
through our cash, investment and credit solutions.”
New York-based E-Trade adds that it’s keeping an eye out for
wealth-management acquisitions in New York, Philadelphia, Metro
D.C., Atlanta, Orlando, Chicago, Dallas, Denver, Scottsdale, San
Diego, Orange County, Silicon Valley and San Francisco.
KIM will keep its name. There are no plans to reduce its staff.
The Wellesley, Mass.-based firm has offices in Longboat Key,
Fla., and Lincoln, Neb. It manages over $900 million in about
1,500 accounts, according to its most recent filing with the
Securities and Exchange Commission. –FWR
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