B. Riley Sells Employee Wealth Management Group to Stifel

Posted on November 22nd, 2024 at 2:11 PM
B. Riley Sells Employee Wealth Management Group to Stifel

From the desk of Jim Eccleston at Eccleston Law

B. Riley Financial Inc. has announced the sale of part of its employee wealth management division to Stifel Financial Corp. As reported by InvestmentNews, the deal, valued between $27 million and $35 million in cash, involves the transfer of 40 to 50 W2 advisors.

The transaction price is significantly lower than earlier expectations. In September, Reuters reported that Stifel was in talks to acquire B. Riley's entire retail brokerage group for $100 million. However, Stifel's interest ultimately did not extend to B. Riley's roughly 190 independent financial advisors, who operate as independent contractors.

Employee advisors, such as those included in this transaction, generally generate more revenue for broker-dealers compared to independent contractors. According to InvestmentNews, a senior industry executive noted the unexpected drop in deal value, emphasizing that B. Riley will still bear the costs of maintaining its independent contractor business.

Stifel, according to InvestmentNews, has a history of acquiring distressed wealth management and investment banking firms. B. Riley expects the 40 to 50 advisors to transition to Stifel in early 2025, bringing with them up to $4.5 billion in client assets as of September’s end.

B. Riley has faced several challenges recently, including a decline in its share price amid an SEC review of the firm's risk disclosures and scrutiny over interactions between its founder and Brian Kahn, former CEO of Franchise Group Inc.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

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