Ameriprise, Stifel Diverge in Q4 Recruiting Success
Ameriprise Financial and Stifel Financial, which each put their advisor-driven wealth management units at the heart of their businesses, diverged in their advisor recruiting and retention results last quarter.
Ameriprise’s broker count fell by a net 60 during the fourth quarter and over the past 12 months, it said after reporting a 14% decline in net income on Wednesday to $463 million.
Stifel added a net 30 advisors in the quarter and 76 for all of 2019, ending the year with 2,222 advisors, it said Thursday after reporting fourth-quarter profit that grew 12.6% from a year earlier to $125.8 million. All but 95 of the St. Louis-based broker-dealer’s advisors are full-time Stifel employees.
Ameriprise Chairman and Chief Executive Jim Cracchiolo minimized the drop in brokers on an analyst’s call Thursday morning, saying the company continues to recruit experienced advisors with higher average production than those who are leaving. (The drop also reflected a “reform” of the way it calculates independent brokers at small banks who joined Ameriprise through its 2017 acqusition of Texas-based Investment Professionals.)
“It was one of the best quarters for recruiting large production practices,” he told an analyst who questioned how Ameriprise could improve recruiting and production at the company’s biggest contributor to profits.
On a gross basis, Ameriprise attracted 63 advisors in the fourth quarter, he said. The firm has one of the higher-paying upfront recruiting deals on the Street, according to headhunters.
Without providing details, Cracchiolo said he expects advisor count to pick up in the early part of this year. The firm is focusing on hiring advisors who have “deep long-lasting relationships” with clients who have higher net worths than the typical Ameriprise broker, he said.
The average 12-month adjusted revenue collected by the company’s brokers last year was $664,000, up from $624,000 a year earlier. Ameriprise’s advice and wealth management sector contributed 52% of its pretax operating earnings in 2019, up from 33% five years ago.
Stifel Financial hired 150 advisors gross in all of 2019, including 45 in the last quarter, Chief Executive Ron Kruszewski told analysts Thursday morning on the company’s earnings call.
“A lot of people [are] coming in the door, as much as I have ever seen,” he said. “I expect that to continue.”
Stifel’s 2019 recruits were managing $17 billion in client assets and producing $119 million in annual revenue at their prior firms, he said, helping to boost profit at its wealth division by 3.9% to a record $196 million. The wealth unit contributed almost 59% of Stifel’s revenue in the fourth quarter.