Hiring by Merrill Lynch & Co., Wells Fargo & Co. and Charles Schwab & Co. helped push up the ranks of local stockbrokers in the past year as others cut back amid the ongoing slump on Wall Street.
The county’s 20 largest stock brokerages added 58 licensed brokers in the past 12 months, a 3.5% gain to 1,693 people, according to this week’s Business Journal list.
No. 1 Merrill Lynch, No. 2 Wells Fargo and No. 9 Charles Schwab accounted for the gain and then some as a handful of other companies saw declines in their number of stock brokers.
Without Merrill Lynch, Wells Fargo and Charles Schwab, the remaining companies saw a slight decline to 1,167 brokers.
The list includes brokers at investment banks, financial services companies and at the money management arms of banks.
The term “stock brokerages” admittedly is outdated. The list captures those who hold licenses to sell stocks at investment banks, traditional banks and other companies. We use “stock brokerages” for want of a better term that more accurately reflects the changing business now and in recent years.
The companies on the list employ 7,305 people here overall, including stock brokers and other workers.
But the total employment figure is skewed by No. 4 Bank of America Corp. whose entry includes all of its bank, credit card and other workers here.
The list reflects an ongoing transformation with banks such as Wells Fargo, Bank of America and No. 6 Wachovia Corp. sitting alongside investment banks such as Merrill Lynch, No. 3 Morgan Stanley and No. 5 Smith Barney, part of Citigroup Inc.
Next year, the list stands to change dramatically with Bank of America set to buy Merrill Lynch and Wachovia set to go to Wells Fargo (see story, page 27).
Wall Street’s slide this year has made for tough going for stock brokers. In the past 12 months, the S & P; 500 index is off more than 30%, compared to a 14% gain the prior year.
Bucking Downturn
Merrill Lynch bucked the downturn by adding 22 brokers, a 9% increase to 258.
“There’s nothing on the horizon that would keep us from growing,” said David Maxwell, associate director for Merrill’s Southern California region in Newport Beach.
The hires came mostly from competitors.
Merrill is looking to expand with a new office in Newport Center.
The company manages $25.5 billion in assets in the county, up a half billion dollars from a year ago.
Next year, Bank of America stands to become the county’s largest employer of stockbrokers after its pending purchase of Merrill Lynch.
The Business Journal estimates Bank of America already employs about 175 stockbrokers here with its investment and U.S. Trust units.
Bank of America appears on our list for the first time this year in a bid to reflect the increased role banks play in managing money for investors.
Wells Fargo Investments LLC, the money management arm of Wells Fargo, moved up two spots from a year ago as it added 30 brokers for a total of 210, a 17% increase.
The company has grown its brokerage business by tapping its bank customers.
“We’re not interested as much in size as we are profitability,” said John Evans, a vice president and regional manager of private client services in Newport Beach.
Wells Fargo expects to do more hiring next year, according to Evans.
The bank also stands to grow with its possible purchase of Charlotte, N.C.-based Wachovia, which owns Wachovia Securities LLC and A.G. Edwards & Sons Inc.
No. 3 Morgan Stanley dropped one spot from last year’s ranking after losing 11 brokers for a total of 177, a 6% decrease.
The investment bank reorganized its local operations, consolidating them under one director, according to John Simmons, district director for Orange and San Diego counties and Nevada.
No. 5 Smith Barney shed nine brokers, a 5% decrease to 172.
Revenue from its local operation was down less than 5%, slightly better than the company’s national average, which declined 5%, according to Greg Laetsche, an executive vice president and regional director.
“Returns in the markets are going to be challenging,” he said.
No. 7 UBS Financial Services Inc., part of Swiss investment bank UBS AG, saw a 3% increase in brokers to 121 despite combining its offices in Orange and Mission Viejo at a new site in the Irvine Spectrum.
That led some brokers to move to offices in Long Beach and San Diego, according to Don Dalis, executive director in UBS’s Newport Beach office.
Overall, UBS added workers in the county with a 23% increase to 271 people. But next year could be a different story, according to Dalis.
“It’s going to be a tough year,” he said.
No. 13 Crowell, Weedon & Co. was among the gainers, adding five brokers for a total 31.
The Los Angeles-based firm that manages about $8 billion in assets hasn’t been hindered with the credit problems its bigger Wall Street peers have had, according to Doug Welsh, a branch manager in the company’s Newport Beach office.
In the past year, Crowell Weedon acquired Los Angeles-based Seidler Cos.
Besides Bank of America, the other newcomer to the list is No. 13 El Segundo-based Financial Network Investment Corp., a unit of the Netherland’s ING Groep NV, with 31 licensed brokers and 40 total employees.
