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Finding Your Level

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All major events should be seen as a signpost for the future. Wachovia’s acquisition of A.G. Edwards was predicted by the former’s active acquisition history; and an acquisition of this major proportion signals that industry consolidation is likely to accelerate in the near future.

For A.G. Edwards brokers, or other advisors wondering if their firm will be next to be scooped up, the big question is whether the new M&A activity is good news or bad. And the answer depends entirely on your individual perspective. A.G. Edwards is relatively mellow in its corporate culture; relative to bulge-bracket firms, Wachovia is too. But there is a difference in scale between the two firms, as detailed in Janet Levaux’s lead article in Research Reporter. In terms of assets under management, Wachovia advisors average $773 million vs. $374 million for A.G. Edwards brokers; in commissions, Wachovia advisors bring in $690,000 annually vs. $520,000 for A.G. Edwards reps.

So, depending on how you look at it, the existing gap between the two firms implies either huge opportunity or unwelcome pressure for A.G. Edwards brokers. If you’re ambitious and on a growth trajectory, you should be thrilled to enter an environment that supports a higher level of production. Alternatively, your mellower way of doing business could seem at odds with the corporate expectations of the combined new firm.

Neither reaction is “wrong.” Rather, your response to this change, and the wave of industry-wide change that is surely coming down the pike, is all about finding your level. This is the essence of freedom, and free markets: Each person rises as much as his previous business experience and resources, and lifestyle and client-relationship preferences, allow.

But there is no need to get swept along with the wave. You can and should actively determine where you want to be in the great capitalist edifice our industry is developing, whether that be the top of the tower with the grand city view or the more modest digs below that shake less when the quake comes. (Remember, past is prologue; therefore, there will be bumps along the way, times when the lower altitude is an advantage.)

The M&A in financial services naturally redounds to the level of financial services media, and I am pleased to report that the progress of capitalism has reached Research magazine’s perch in business-to-business publishing. We are still the fastest growing financial trade magazine and our corporate owner, Summit Business Media, is adding to its rapidly expanding media empire. Summit is acquiring Wicks Business Information, whose portfolio includes the very distinguished Investment Advisor magazine. We proudly welcome our new sister publication to our media family.

Gil Weinreich


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