Stifel's wealth management unit thrives, even as overall profits tumble

Stifel's wealth management business finished strong in 2023, even as the firm's overall profits declined.

In a call with analysts on Wednesday, the St. Louis-based firm announced its earnings for both the quarter and the year. In the fourth quarter of 2023, Stifel's overall net income was $153.2 million, down 8.4% from the same time in 2022. For the whole year, the company's profits totaled $485.3 million, 22.3% less than the year before.

But Stifel's wealth management unit was a different story. Net revenue for Global Wealth Management in the fourth quarter was $766 million, a 2.9% increase from the fourth quarter of 2022. For all of 2023, the department's net revenue was $3 billion, up 7.9% from the year before.

Both figures, Stifel reported, marked new records for the company. 

"Our Global Wealth segment has been the long-term growth engine of our firm," Stifel CEO Ronald Kruszewski said during the call. "Our wealth management segment has posted 21 consecutive years of record revenue as our focus on recruiting, serving our clients, respecting the entrepreneurial spirit of our advisors and growing client assets has been fundamental to our success."

The wealth unit also thrived in other ways. Over the course of 2023, Stifel recruited 171 financial advisors, including 40 in the final quarter. By the end of December 2023, Stifel had 2,386 advisors on its payroll, a 1.8% increase from the same time in 2022.

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Client assets grew as well. In the fourth quarter, total client assets reached $444.3 billion, up 14% from the same time in 2022.

In some ways, the results told a similar story to Stifel's previous quarter. In Q3 of 2023, the firm's overall net income dropped by about 50%, but revenue from its wealth management division rose by 10%.

"While we see significant upside in revenue and margins as our institutional segment gets back to historical norms, our long-term growth and success has been and continues to be driven by our wealth management franchise," Kruszewski said.

For a closer look at Stifel's performance in the fourth quarter — and in 2023 in general — scroll through the cardshow below. To review the firm's earnings in the third quarter, click here. And for a look at how Stifel did in the fourth quarter of 2022, click here.