St Louis, MO-headquartered Stifel Financial Corp is bolstering its global wealth management segment by agreeing to acquire Legg Mason Investment Counsel & Trust from the global asset manager Legg Mason.

St Louis, MO-headquartered Stifel Financial Corp is bolstering its global wealth management segment by agreeing to acquire Legg Mason Investment Counsel & Trust from the global asset manager Legg Mason.

Legg Mason Investment Counsel & Trust, which manages over $9 million in assets, provides investment advisory and trust services on a discretionary basis to individuals families and institutions in the US.

The transaction, the terms of which were not disclosed, is due to close in the fall of 2014, subject to customary regulatory approvals. The board of directors of Stifel has approved the acquisition.

“For Legg Mason, this transaction continues to evolve our investment affiliate lineup toward fewer and larger firms that can be better leveraged through our global distribution platform,” said Joseph Sullivan, president and chief executive at Legg Mason.

A spokesperson from Legg Mason told Family Wealth Report that all staff will, as it stands, transfer over to Stifel; Stifel said that "substantially all of the key professionals from LMIC have signed continuation agreements with Stifel."

Wealth management drive

Stifel's global wealth management segment consists of two businesses: the Private Client Group and Stifel Bank. The Private Client Group includes branch offices and independent contractor offices of its broker-dealer subsidiaries in the US.

Stifel has been fleshing out its broker-dealer and wealth management unit over the past year or so by making a number of hires and acquisitions. In a significant move at the end of 2013, it appointed Michael Sullivan from Merrill Lynch as managing director of the private client group and eastern region director of its broker-dealer subsidiary, Stifel, Nicolaus & Co. At Merrill, Sullivan helped establish the firm’s high net worth private client segment and was co-founder and head of a private banking and investment group called Private Executive Services. He also served as managing director and head of the firm’s cross-organizational client coverage group/global client coverage.

Within its asset management division, the firm today counts: EquityCompass Strategies; Missouri Valley Partners; Montibus Capital Management; Thomas Weisel Capital Management LLC Fixed Income Management; Thomas Weisel Global Growth Partners; Washington Crossing Advisors; and Ziegler Capital Management among its affiliates. 

Meanwhile, Stifel logged very strong first quarter 2014 results at its global wealth management wing; for the quarter ended March 31, it generated record pre-tax operating income of $79.7 million, compared with $69.5 million in the first quarter of 2013 and $79.0 million in the fourth quarter of 2013. Net revenues for the quarter were a record $297.2 million, compared with $267.0 million in the first quarter of 2013, and $292.8 million in the fourth quarter of 2013.

The increase in net revenues from the first quarter of 2013 is primarily attributable to growth in asset management and service fees; increased net interest revenues; and an increase in commission revenues, it said.

The move adds weight to a wave of M&A activity in recent months and years in the wealth management arena and financial services industry at large. This week, for example, KPMG, the “Big Four” accountancy firm, entered into an agreement with the global assurance, tax and advisory firm Rothstein Kass, through which it will acquire most of the latter firm’s principals and employees.