Stifel said it completed its acquisition of Barclays' U.S. wealth management unit on Friday – adding a business which lost nearly half of its advisors to competitors since the deal was announced in June.
The firm did not disclose terms, underscoring the difficulty industry insiders have had judging whether the deal was worth it.
"If what you bought is only what came, then it's a great recruiting deal for Stifel. It comes down to what it cost and how variable was that expense," says Bill Willis, head of Willis Consulting, a recruiting firm in Los Angeles.
When the acquisition was announced, Stifel said that the Barclays unit had about 180 advisors managing $57.9 billion in client assets.
Stifel now says that about 100 Barclays advisors overseeing about $20 billion in assets are joining the firm, according to presentation slides for a Goldman Sachs conference in New York on Tuesday.
The St. Louis-based firm has also lowered its estimate of how much revenue the unit will add to the top line. Stifel said the unit will now add $210 million to $230 million in revenue, compared to $332 million when the acquisition was announced in June.
After the deal was announced, Stifel offered Barclays advisors up to 150% of their production, according to documents seen by On Wall Street.
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Advisors left Barclays for competitors such as Merrill Lynch, Morgan Stanley and J.P. Morgan Securities. Industry insiders say that while some recruits were looking for a better deal, many were also looking for a firm with a different brand and capabilities.
"Some of these guys just don't want to be in a firm that doesn't carry a lot of national and perhaps international cache," Willis says. "That's no negative on Stifel. I think it's a good firm. But it's not well known in New York City."
The attrition rate of Barclays advisors was much higher than that of Sterne Agee advisors. Stifel acquired the independent broker-dealer earlier this year, and retained all the advisors, according to the firm.
Stifel said the Sterne Agee deal cost about $150 million, and it added more than 700 advisors managing $20 billion in client assets to Stifel. The regional broker-dealer said it anticipates the Sterne Agee unit to add $300 million to $325 million in revenue.
Overall, Stifel's recent acquisitions have significantly boosted its headcount to more than 2,800 advisors from about 2,100 at the start of the year.
As part of the deal, Stifel will also serve as the U.S. distribution partner for some of Barclays new issues, according to a press release. The firms did not provide additional details.
Ronald Kruszewski, CEO of Stifel, said in a statement that it was a "transformational achievement" for the firm's wealth management business.
"Through the combination of the depth of Barclays’ franchise and the breadth of Stifel's product offerings, we are creating a premier wealth management platform," Kruszewski said, adding that the firm will continue making investments in its platform and services.
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