Is the recent wave of broker dealer acquisitions about to get even bigger? In an earnings call, Well Fargo CEO John Stumpf announced that the firm could be in the market for companies that would complement their wealth management unit, which enjoyed a 41% increase in profits last quarter. Meanwhile, Alabama-based Sterne Agee, looking to expand its IBD operations, announced the purchase of WRP, based in Youngstown, OH. Sterne has $17 billion AUM with 270 reps; WRP has 350 reps and $48 million in revenue last year.
Thanks to its purchase of Wachovia, Wells Fargo Advisors is a powerhouse, with more than 15,000 reps. Wachovia had amassed a large BD through acquisitions of Prudential Securities, AG Edwards, Wachovia Securities, First Albany and a number or independent BDs. With capital available and a gap in the mid- to high-net-worth market ($1-$10 million), a regional firm is more likely, according to experts, than a large BD.
Wells Fargo also has a viable DC record keeper and a budding DCIO. Could recent transactions and access to capital cause Wells to look for opportunities in the DC market? Synergies among the bank, BD and record keeper have been slow in coming, but the recent successes of Bank of America/Merrill Lynch, which fits the same profile, could be a model for Wells.
