Strategy
Stifel Wants To Maintain Growth, Slows Hiring Pace
Stifel Financial Corp's wealth management division has the potential to treble the number of its advisors to 6,000, representing a massive advance from its headcount just five years ago, its chairman and chief executive told a recent conference.
"We believe that we have the platform and capital and market to grow from 2,000 to 4,000 to 6,000 financial advisors," Ronald Kruszewski was quoted as saying by the Wall Street Journal.
The firm's global wealth management division has grown from about 500 advisors five years ago and will remain Stifel's focus of growth, Kruszewski said at the Sandler O'Neill & Partners Global Exchange and Electronic Trading Conference.
In 2009, Stifel added nearly 800 financial advisors, half through acquisitions and half organically and the division is still "growing hand over fist," Kruszewski said. He did however add, "the environment for recruiting has gotten heated, and we've slowed down because the economics don't make as much sense."
The wealth management business, boosted by its acquisition of wealth management branches from UBS, reported net revenue of $197 million in the first quarter, a 73 per cent increase over the first quarter of 2009 and a 7 per cent increase over the fourth quarter of 2009, the WSJ report said.
The global wealth management business has experienced margin compression, primarily due to opening new branches and significant fee waivers - of $50 million to $60 million a year - in its cash products, Kruszewski said. Its margins are at 19 per cent and should be in the mid-20s, but the firm "sees its way clear" to get them back there, the report continues.
Kruszewski called Stifel's acquisition of Thomas Weisel Partners a "perfect fit" on the capital markets side, which will "fast track" Stifel's investment banking growth. Thomas Weisel's small asset management business will complement Stifel's existing management team, he said.
The combined company will have a $2 billion market capitalization, $1.5 billion to $1.6 billion in combined revenue and more than $1 billion in equity capital, he said.
