Stifel Financial Corp. reported Wednesday morning that its wealth management franchise ended last year with a flourish, hitting a new high in client assets under management at $444 billion at the end of last month, a year-over-year increase of 14 percent.
Stifel, with 2,386 financial advisors, also saw a jump in recruited financial advisors last year: It reported adding 40 financial advisors, including 13 experienced advisors with total trailing 12-month production, meaning total fees and commissions, of $8.1 million, according to the company.
Stifel's global wealth management group reported record net revenue of $766 million for the three months ended December 31, compared to $744.3 million during the fourth quarter of 2022, an increase of 2.9 percent. Pretax net income was $301.4 million, compared with $317.1 million in the fourth quarter of 2022, a drop of 5 percent.
Meanwhile, Stifel Financial shares hit a new 52-week high in price Thursday, and were trading at $74.06 at 2:30 p.m., an increase of almost 5 percent for the day.
"I want to emphasize that our global wealth segment has been the long-term growth engine of our firm and is a cornerstone of Stifel's success," CEO and chairman Ron Kruszewski said during a conference call with investors and analysts Wednesday morning. "Our wealth management segment has posted 21 consecutive years of record revenue as our focus on recruiting, serving our clients, respecting the entrepreneurial spirit of our advisors, and growing client assets has been fundamental to our success."
Since 2014, Stifel's global wealth management revenue has increased 150 percent, while its portion of recurring revenue has increased from 44 percent to 78 percent, Kruszewski added.
Stifel reiterated that it had taken a $67 million legal charge that it had previously reported in the third quarter.
That charge was booked as an accrued expense, meaning a potential expense recognized on the books before it has been paid, a Stifel spokesperson wrote in an email. "We said in the third quarter when it was first announced, the nonrecurring legal charge was primarily the result of the [Security and Exchange Commission's] industry-wide review of off-channel communications," the spokesperson added.
For almost two years, the SEC has been cracking down on big banks and brokerages for failing to monitor and preserve their employees’ messages on WhatsApp and other unauthorized platforms.
"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.
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