After watching a giant team of its financial advisors last month in Boca Raton, Fla., jump ship, B. Riley Financial Inc. on Friday morning said it was selling a part of its employee wealth management group to Stifel Financial Corp. $27 million to $35 million in cash.
The price tag for the 40 to 50 financial advisors, known as W2 advisors because they are paid as fulltime employees, is far less than expected.
According to a report in September from Reuters, Stifel was in talks to buy B. Riley’s retail brokerage group for $100 million. At the time it was questioned whether Stifel had any interest in B. Riley’s 190 or so independent financial advisors, called so because they are paid and employed as independent contractors.
Employee brokers on average generate more revenue for the broker-dealer than independent contractors.
“It was a $100 million deal, now it’s down to around $35 million for some of the W2 advisors,” said a senior industry executive who spoke confidentially to InvestmentNews about B. Riley. “It’s a profitable part of the company and they will still have the expenses of maintaining the independent contractor business.”
A spokesperson for B. Riley did not return a call on Friday to comment.
Stifel, known as a bargain hunter for distressed wealth management and investment banking businesses, will make its cash payment based on the number of financial advisors who join the firm, according to a statement by B. Riley.
An expected the 40 to 50 advisors will transition to Stifel in early 2025, according to the statement, and the client assets are up to $4.5 billion as of the end of September.
B. Riley, an embattled investment bank, has been losing retail financial advisors as the firm has been dealing with recent tumult.
The firm is under considerable pressure following a plunge in its share price amid an SEC assessment of whether the firm correctly disclosed risks in some of its assets, and questions about its founder’s interactions with Brian Kahn, the former CEO of Franchise Group Inc., who stepped down in January after Riley participated in its leveraged buyout.
Eric Lyon, a former senior managing director, B. Riley Wealth Management, jumped to Kestra Investment Services at the start of last month. According to Kestra, Lyon’s team, Wealth Empowerment Financial Strategies, had more than 30 advisors and staff and works with $1.4 billion in client assets.
And Philip Wunderlich, the scion of the founder of the former Wunderlich Securities, which B. Riley acquired in 2017, left the firm in September and joined Prospera Financial Services Inc.
From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.
Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.
“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.
Sellers shift focus: It's not about succession anymore.
Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.