Stifel's wealth management breaks records even as overall earnings decline

Even in an otherwise difficult quarter, Stifel's wealth management business continued to thrive.

In the second quarter of 2023, the St. Louis-based firm's overall earnings were nothing to cheer about. Stifel's net revenue fell 5.2% year on year, dropping to $1.05 billion. That brought its net income available to shareholders to $125.03 million, a 17.5% decrease from last year.

But in terms of wealth management, the news was much better. From April to June, Stifel's Global Wealth Management unit enjoyed a net revenue of $758.19 million — an 8.6% jump from the second quarter of 2022.

This marked a new record for the unit's quarterly net revenue — not only this time, but for the 10th consecutive quarter, Stifel CEO Ron Kruszewski pointed this out in an earnings call on Wednesday.

"We recorded solid results in the second quarter as strength in wealth management was offset by the industry-wide slowness in our institutional business," Kruszewski said during the call. "Simply put, wealth management is consistent and provides balance to the cyclical institutional business."

Recruiting was robust as well. Stifel said it hired 46 financial advisors over the course of the second quarter, including 21 experienced employee advisors and seven experienced independent advisors. 

Kruszewski partly credited this progress to the firm's work culture, which received recognition this year. Earlier in July, Stifel won the top spot in the data analytics firm J.D. Power's employee advisor satisfaction survey. 

"One of the major drivers of our success is the culture and service we provide to our advisors," Kruszewski said. "In this effort, we have continually invested in resources, support and technology to reduce bureaucracy and enable our advisors to thrive."

Read more: Commonwealth, Stifel and Raymond James get top advisor satisfaction grades, dethroning Edward Jones

However, these gains were offset by losses in other parts of the company. Stifel's non-wealth management wing, Stifel Institutional, reported a quarterly net revenue of $276.24 million. That's down from $411.36 million in the same quarter last year — a 32.8% drop. Kruszewski did not sugarcoat that for investors.

"The second quarter was especially slow in the business and especially slow for us," he said.

But taken with Stifel's successes in wealth management, he expressed confidence in the firm's performance.

"The overall message is that we had a strong quarter," he said. "We expect profitability and our growth to continue. It's a challenging environment, but one that we believe we're well positioned in for the future."

Here's a closer look at how Stifel did in the second quarter of 2023 — as compared to last year and last quarter: