Stifel’s Q1 recruits brought in $32M in production, CEO says

Stifel’s recruiting efforts are boosting headcount.

Advisor ranks at the regional broker-dealer reached 2,160 advisors for the first quarter, up a net 43 from the year-ago period, according to the company’s recent earnings report.

First quarter recruits represented $32 million in net new production, CEO Ronald Kruszewski said in response to an analyst’s question. Those new hires easily replaced the advisors generating $2 million in production that the firm lost to competitors during the quarter. That figure did not include retirement, Kruszewski said.

“The numbers I just gave you are the numbers that matter, and we're looking at how we can, at least among our mid-sized peers, be a leader in providing that kind of information,” Kruszewski said during the earnings call.

The longtime chief executive expects that hiring efforts this year could outpace those of 2018, which he credited to investments Stifel has made in its technology and resources as well as changes in the overall industry.

Stifel — like other regional BDs — has benefited from discontent among wirehouse brokers, some of whom have said they want more flexibility in how they manage their practices and less burdensome bureaucracy. In particular, Wells Fargo has been a source of talent for its smaller rivals. The bank’s brokerage ranks dipped 4.1% year-over-year to 13,828 advisors for the fourth quarter.

Stifel’s recruiting strategy has boosted client asset levels, which rose 9.2% year-over-year to approximately $299 billion. Fee-based assets grew faster, rising 11.8% to $99 billion.

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The company’s net income rose 12.1% to $96 million for the first quarter.

The firm’s hiring streak has also been accompanied by a number of new branch openings. The regional BD’s recent hires include the father-son team of Michael and Patrick Dammert, who moved into a new office in Covington, Kentucky. The Dammerts were previously affiliated with Hilliard Lyons where they oversaw $70 million in client assets, according to their new employer.

Yet while some recruits like the Dammerts moved from regional brokerage to regional brokerage, many of Stifel’s recruits look more like Mark Scaglione, a 31-year UBS broker who quit the wirehouse to join Stifel in Tampa, Florida. Scaglion oversaw $166 million while at UBS, according to Stifel.

Kruszewski, who has served as CEO since 1997, says the number of advisors considering joining the firm “is the largest that I've seen since I've been here.”