Stifel selling off Sterne Agee independent broker-dealer business it acquired last year

CEO had indicated in November that the B-D's lower margins were dragging down the wealth management group

Jun 27, 2016 @ 11:55 am

By Bruce Kelly

Stifel Financial Corp. is dumping Sterne Agee's independent brokerage business just about a year after acquiring it.

Stifel said Monday it was selling Sterne Agee Financial Services Inc., along with its clearing and advisory businesses, to INTL FCStone Inc., a financial services company with roots in commodities. The sale affects about 600 independent reps and advisers.

Terms of the deal, which is expected to close in July, were not disclosed.

Stifel Financial acquired the privately held Sterne Agee Group Inc. for $150 million in cash last June. Stifel is hanging on to Stern Agee's private client group and institutional fixed-income business.

To support the Sterne Agee businesses it is buying, INTL FCStone has agreed to hire substantially all of the Birmingham, Ala.-based support professionals, according to a press release from the two companies.

In the past, Stifel CEO Ron Kruszewski had been critical of the independent broker-dealer business. In a conference call with analysts in November, he said he was looking for better performance out of the independent B-D.

When discussing Stifel's global wealth management group, he said: “The margins were lower than last year due to the independent contractors from Sterne Agee, who operate at lower margins than our traditional wealth management business.”

Later in the call, in response to an analyst's question, he said: “I think overall, and I think in the industry, independent business tends to operate at lower margins. And so we've been looking at, and will continue to evaluate, how the Sterne businesses fit into our overall margin analysis.”

(More: Stifel's purchase of Sterne Agee likely not its last in the broker-dealer space )

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

How InvestmentNews picks its Women to Watch winners

The process is laborious and exacting, but well worth it. The end result each year is an impressive group of women in the advice industry from whom others can draw inspiration.

Latest news & opinion

Some good news about female recruitment in financial advice

Each of four core advisory positions tracked in InvestmentNews' benchmarking study has seen an uptick in women entrants.

10 ETFs that are up more than 35% this year

Amid the stock market carnage, there are still some funds posting big gains.

10 biggest HSA providers rated

Morningstar rated the largest plan providers as investment and spending vehicles.

Morningstar: DOL fiduciary rule reduces inflows to mutual funds with high loads

With the measure's demise, will the SEC's advice reform sustain the momentum?

6 tax strategies for year-end planning

How to help clients maximize their wealth using specific tax strategies before the end of the year.

X

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 investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

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

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print