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Stifel to Buy Barclays Wealth Management Unit

(Bloomberg) -- Stifel Financial, the Missouri-based investment bank known for snapping up regional rivals and Wall Street castoffs, agreed to buy Barclays's U.S. wealth management business.

Barclays had about 180 financial advisors in the U.S. managing $56 billion in total client assets as of May 31, St. Louis-based Stifel said Monday in a statement that didn't include terms. Barclays had bought the unit with other Lehman Brothers operations in 2008 and was faulted by regulators last year for inadequate internal controls there.

Stifel CEO Ron Kruszewski last acquisition was Sterne Agee, the indepedent broker-dealer and investment bank based in Birmingham, Ala. That deal boosted Stifel's total advisor force by one-third to about 2,800 advisors. It also gave Stifel a launching pad to grow its presence in the independent space.

Kruszewski has made more than two dozen acquisitions since taking the helm in 1997, boosting net revenue every year to build one of the largest U.S. securities firms based outside of New York. His spree has consolidated an industry beset by shrinking margins and the cost of keeping up with new technology and stiffer regulation.
"Combining the depth of Barclays's franchise and breadth of Stifel's product offerings, coupled with an entrepreneurial and client-focused culture, will create the premier wealth management platform in the industry," Kruszewski said in the statement.


Stifel's targets since the financial crisis have included Sterne Agee Group, KBW and Thomas Weisel Partners Group. The Barclays's deal is expected to be completed in mid-November.

The SEC last year faulted Barclays's stewardship of the U.S. wealth management unit in the years after the crisis. The bank failed to build a strong compliance infrastructure while integrating the business into its U.S. capital-markets division, the agency said in September.

The SEC fined the division $15 million, finding employees made more than 1,500 transactions for client accounts without providing required written disclosures or getting consent. The Barclays subsidiary, which didn't admit or deny the claims, said at the time that it had cooperated with investigators and strengthened oversight.

"The sale of our U.S. wealth franchise to Stifel represents a good outcome for Barclays and for our clients," Akshaya Bhargava, Barclays's CEO of global wealth and investment management, said in the statement.

Stifel's lead financial advisor in the deal was Keefe, Bruyette & Woods, while Bryan Cave provided legal advice.

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