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Stifel notches recruiting record; net income jumps 56%

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Stifel’s aggressive recruiting strategy has pushed head count up, helping its wealth management unit turn out record revenues, the company said.

Advisor head count jumped to 2,298 for the third quarter, a net increase of 31 from the prior period and 47 from the year-ago period. Stifel reported that wealth management net revenue rose to $498 million from $453 million for the year-ago period, a 9.8% increase.

“It was our best quarterly recruiting total in roughly 10 years, excluding acquisitions,” CEO Ronald Kruszewski said Tuesday during an earnings call with analysts.

Kruszewski says he expects the firm’s hiring spree to continue.

“While recruiting levels can vary quarter to quarter, we are seeing elevated levels of interest among advisors in joining Stifel — and we are increasingly turning them into Stifel advisors,” the chief executive said.

Kruszewski said Stifel has seen stronger recruitment since it began boosting signing bonuses. Stifel had cut its recruiting bonuses after the Labor Department issued regulatory guidance suggesting such deals could improperly incentivize brokers to encourage clients to move accounts between firms. But the fiduciary rule was vacated earlier this year following a lengthy court challenge by Wall Street lobbying groups.

“We scaled back during the DoL timeframe because of our view of what could have happened with regard to retirement assets. And also with regard to what would have been permitted with regard to incentive comp,” Kruszewski said.

Now, Stifel is “more engaged,” he said.

The crash of 2008 was intense but, in hindsight, short-lived. Market gains began a few months afterward and have continued with few exceptions.
October 3

Like other regional brokerage firms, Stifel has hired a number of wirehouse advisors over the past year. Some of these advisors have said they were leaving the wirehouses in search of a different corporate culture and a less burdensome bureaucracy.

Stifel’s recruiting spree continued Wednesday, when a spokesman said the St. Louis-based firm had brought on six advisors managing a combined $558 million in client assets.

Three of the new hires had come from wirehouses. Former Merrill Lynch advisors Dave Harris and Chris Buccheri joined Stifel in Bel Air, Maryland, and Naples, Florida, respectively. They previously oversaw $330 million in client assets, according to Stifel. Ex-UBS advisor Dan Long also joined the Naples office as a producing branch manager. At UBS, Long was responsible for $55 million.

The other hires joined from regional firms. Elliot Treece and Martin Nichols came from Edward Jones and now operate from Stifel’s office in Paducah, Kentucky. They managed $87 million and $53 million, respectively. In Scottsdale, Arizona, Stifel hired former Raymond James advisor Rachel Hall. She had overseen $33 million at her former employer, according to Stifel.

These and other new hires have been a factor in boosting Stifel’s asset levels. The firm reported total client assets of $289 billion, up 9.2% year-over-year from $264 billion.

Companywide, net revenue rose to $738 million from $731 million for the year-ago period, a 2.4% increase. Stifel’s net income surged to $103 million from $66 million, a 56% increase.

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