Barclays brokers sniff at Stifel, jump to Merrill

BofA has added 15 ex-Barclays advisers in the past month and recently picked up a $750 million team in Texas

Jun 30, 2015 @ 1:27 pm

By Mason Braswell

Fifteen advisers, including most recently a team in Texas managing $750 million in assets, have fled Barclays Plc U.S. wealth management group in the last month to join Bank of America Merrill Lynch following the announcement that Barclays unit was being acquired by the lesser known Stifel Financial Corp.

Recruiters said the flight to Merrill is a testament to the challenges Stifel faces as it tries to hold onto the rest of Barclays' brokers and make inroads into the highly competitive market for ultra-wealthy clients.

With the addition of the team in Texas, Merrill Lynch has picked up close to 10% of the approximately 180 advisers who were at Barclays at the time the deal with Stifel was announced on June 8. The group, which includes three advisers, managed approximately $250 million per adviser, well above the average of $189 million per adviser for the Barclays unit.

“Those are the cherries that they want to have,” said Howard Diamond, a managing director at Diamond Consultants, a placement firm for financial advisers. “When the Stifel deal was announced, advisers weighed the retention package that they'd get from Stifel against a huge upfront package they'd get from Merrill Lynch, so if they're going to go to a different firm, they might as well go where they want and be paid a lot more money.”


Mr. Diamond estimated that Merrill Lynch could have offered over 300% of the advisers' annual revenue in the form of up-front and back-end bonuses tied to performance goals. Stifel's retention deal has generally been around 150% for advisers, Mr. Diamond and other recruiters said. Other firms are also competing for Barclays advisers, including Morgan Stanley Wealth Management, Wells Fargo Advisors and Raymond James & Associates, Mr. Diamond said.

A spokeswoman for Bank of America Merrill Lynch, Susan Atran, said the firm did not discuss specific numbers. Brian Spellecy, a spokesman for Stifel, declined to comment.

For Stifel, the Barclays acquisition represents an important moment as it could help the once-regional firm secure a foothold in the ultra-high net worth channel, analysts said.

Stifel advisers manage approximately $89 million on average, compared with the $189 million per adviser at Barclays and $159 million at Merrill Lynch, according to a report from Credit Suisse analyst Christian Bolu.


Stifel has been quietly expanding its reach into the ultra-wealthy market recently since adding one of the founders of Merrill's private banking and investment group, Michael Sullivan, in December 2013. The firm last year also picked up a pair of former Merrill Lynch private bankers in Rochester, N.Y. who managed $2.5 billion in assets before they were let go from Merrill.

But the Barclays addition could be complicated by a number of factors, including Stifel's more regional brand and whether or not the firm can service some of the Barclays advisers' more complicated businesses. That would include alternative investments, syndicate business and equity underwriting products, Mr. Bolu said in the report. Roughly 40% of the revenue produced by Barclays brokers came from alternatives and syndicate business, according to Mr. Bolu, which was based on an analysis of filings from Lehman Brothers Holdings Inc. and press reports.

“This could mean significant revenue attrition post-merger as we do not believe Stifel has the depth of underwriting and alternatives capabilities of Barclays,” Mr. Bolu said.

It is not clear whether these were concerns of the team in Texas. The advisers were not available for comment, according to Ms. Atran.

The three, including Barry Schneider, Cris Bera and Chris Dewhurst, joined Merrill's Private Banking and Investment Group, a division of around 150 teams focused almost exclusively on clients with around $10 million or more in assets. They said in a news release that they had a number of high net worth and institutional clients and joined Merrill because of the “broad range of capabilities.”


Ron Edde, who places financial advisers through his firm Millennium Career Advisors, said that another factor for a large team that he is working with on the West Coast is how clients will respond to the Stifel name.

“I think a lot of people who are with Barclays were there because of the panache that the name carried,” Mr. Edde said. “While Stifel is a good firm, it's not exactly a household name if you walk down the street and ask 100 people.”

Still, the number of defections will not hurt Stifel financially. The deal was valued at around $150 million to $250 million, but Stifel will only pay for the assets that they retain, recruiters said.

Mr. Diamond said that despite the most recent move to Merrill, a lot of advisers were happy with Stifel. Most of those who are moving now were those who were already planning on going somewhere else before the deal, he said.

“Stifel is a good firm, and many Barclays advisers are going to be very happy there,” Mr. Diamond said. “They like the regional name. They like being paid 150% and being able to stay put.”

He estimated that if Stifel can manage to hang onto around 70% of the advisers that they want to retain from Barclays, then they would have gotten a good deal.

“That would be a great win for Stifel,” he said.


What do you think?

View comments

Recommended for you

Upcoming Event

Sep 10


Denver Women Adviser Summit

The InvestmentNews Women Adviser Summit, a one-day workshop now held in six cities due to popular demand, is uniquely designed for the sophisticated female adviser who wants to take her personal and professional self to the next level.... Learn more

Featured video


The secret to working with next gen clients?

Alan Moore of XY Planning says working with millennials isn't as difficult as some advisers make it sound. Here are three strategies for success.

Video Spotlight

We started as a boutique firm with huge ambitions. Schwab was a perfect fit.

Sponsored by Schwab Advisor Services

Recommended Video

Keys to a successful deal

Latest news & opinion

10 millennials making their mark in Washington — and beyond

These next-generation leaders are raising their voices and gaining influence over financial advice regulation and legislation.

10 highest paid professions in America today

These are the top-paying jobs in the U.S., according to Glassdoor.

Former Merrill Lynch star broker Thomas Buck sentenced to 40 months in prison

He pleaded guilty to securities fraud in 2017; charged clients excessive commissions.

Rules for claiming Social Security at 70

Some individuals' benefits will begin automatically; others have to take action.

Bills would allow employers to help workers pay off student debt, tax-free

Tackling growing loan burdens sparks bipartisan interest on Capitol Hill.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print