Stifel Reports 80% Earnings Increase During 1st Quarter Even After Disengaging From Broker Recruiting Wars

Stifel Financial Corp. is reporting an 80% increase of earnings during its first quarter, which ended on March 31, compared to last year. Nearly 57% of its operating profit and 64% of revenue came from its global wealth management group. The profit increase came even as the financial firm slowed down its recruitment of new brokers. On its financial adviser roster, just 45 names were added, as Stifel made the decision not to engage in recruitment wars with larger firms that have enhanced their recruiting packages in an effort to bring in new people who can help the firms rehabilitate their reputations in the wake of the 2008 market collapse. Bank of America’s Merrill Lynch, Morgan Stanley Smith Barney LLC, and other investment banks are reportedly offering leading brokers up to 300% of the revenue they produced in the last 12 months.

While Stifel increased its adviser roster by over 500 in 2009, absorbing over 300 advisers from UBS Financial Services Inc.’s wealth management group and 56 retail branches, this year the financial firm seems to be focusing more energy on creating a more balanced revenue mix. By merging (a $300 M deal), with Thomas Weisel Partners Group Inc. Stifel’s retail and investment-banking/capital revenue will be brought into balance.

According to Investment News, Ron Kruszewski, Stifel chief executive and chairman, as saying that the ex-UBS brokers that are now working for Stifel are working at about 80% of their potential. Seeing as many of them started with the financial firm toward the end of last year, it may take a little longer for them to fully transfer their client assets and achieve complete operational efficiency.

Related Web Resources:
Stifel backs off recruiting wars — and profits soar, Investment News, April 29, 2010
Stifel Financial Corp. Announces First Quarter Results, Marketwatch, April 29, 2010
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