The stars aligned Thursday morning in a Washington University auditorium, as senior executives from the largest brokerages in St. Louis convened for a rare meeting.
Executives from Stifel, Wells Fargo Advisors, Edward Jones and TD Ameritrade talked about the challenges facing the financial services industry in a panel discussion at a conference focused on wealth and asset management research.
Richard Ryffel, market manager for J.P. Morgan Private Bank, moderated the panel. Ryffel helped launch the Wealth and Asset Management Research Conference, which is now in its fourth year, and the Olin Business School’s master’s program for wealth and asset management. The conference is part of the orientation program for students beginning the program.
Ryffel kicked off the discussion by asking about the most significant challenges facing the four firms.
Peter deSilva, president of retail at TD Ameritrade, brought up the issue of pricing in the digital age.
“How do we get paid for the value that we bring?” deSilva asked. Commissions used to be a major factor, he said, but have diminished in recent years.
“Commissions are less and less and less a part of how we get paid,” deSilva said.
He referenced RobinHood, an app that allows people to trade stocks for free.
“We have to respond to the trend of people wanting things for free,” deSilva said.
Penny Pennington, managing partner of Des Peres-based Edward Jones, cited the talent search, emphasizing that companies like Edward Jones are looking for employees with high emotional intelligence and communications ability, in addition to other skills.
Ryffel later asked the panelists whether they believed the trend of bank consolidation will continue.
“Consolidation will occur not only in financial services but in many industries,” said Ron Kruszewski, Stifel’s CEO and chairman.
St. Louis-based Stifel has been on a buying spree in recent years. The company has already announced three acquisitions this year, on top of four others announced in 2018.
“Our firm is a product of about 20 acquisitions,” said deSilva, of TD Ameritrade. In September 2017 TD Ameritrade closed on its $4 billion acquisition of Scottrade, which was headquartered in St. Louis County.
John Alexander, senior managing director of St. Louis-based Wells Fargo Advisors, noted that Wells Fargo also grew through acquisitions. A.G. Edwards & Sons, a St. Louis-based brokerage, was acquired by Wachovia Corp. in 2007. In 2008, Wachovia was acquired by San Francisco-based Wells Fargo.
The panelists were asked to discuss how St. Louis can position itself for growth in the financial services industry.
“There’s no reason why St. Louis shouldn’t be able to be bigger in this industry,” said Alexander. “And actually in Wells Fargo, we are moving more and more people here.”
DeSilva said it costs TD Ameritrade about $2,700 less each year to have an employee in St. Louis, he said, compared to other sites. The company currently employs about 1,000 full-time employees in the St. Louis area, according to a spokeswoman.
“St. Louis doesn’t roll off the tongue as a financial hub in the United States, but if you look at it, in fact, we are,” deSilva said.
Research from the Brookings Institution published in May identified financial services as one of St. Louis’ four most promising industries, along with precision manufacturing, logistics and professional and technical services.
“There’s not another city outside of New York that has a Scottrade, a Wells, an Edward Jones, a Stifel, all ... in this city,” Kruszewski said.
Looking ahead, Ryffel told the Post-Dispatch that he thinks fintech will be an element of St. Louis’ growth in the financial services sector, adding that technology can liberate financial advisers from certain tasks, and allow them to spend more time with their clients.