While Broadridge Financial Solutions has been highly aggressive with acquisitions in recent years, the New York-based fintech firm also stands to be affected by the consolidation of its clients.
However, Timothy Gokey, its CEO, does not expect much impact to his firm from that consolidation, he said Tuesday at the Raymond James Institutional Investors Conference in Orlando, Florida.
For example, on the broker-dealer front, when it comes to Morgan Stanley’s planned acquisition of discount broker E-Trade for $13 billion, he said: “Both are important clients for us on the investor communications side,” which is the “biggest part of the business” for Broadridge, and “we see very little impact there,” he told attendees.
On the technology side of the business, E-Trade is a client of Broadridge’s, but Morgan Stanley is not, he said, predicting: “Whatever happens here is going to happen over time, so it’ll be a year before they close; then there’s a three-year integration plan, so it’ll be some time before anything happens.”
However, it “is a possibility” that Morgan Stanley could “choose to run separate platforms,” he said, conceding “we could lose E-Trade.” Even if that happens, “over any multi-year period, it’s not material to us,” he said.
There would also be a potential opportunity for Broadridge because Morgan Stanley’s platform has “been around for a long time,” so it might decide to “modernize” and turn to Broadridge, he said.
Meanwhile, when it comes to asset manager Franklin Resources buying Legg Mason in a deal valued at almost $4.5 billion, “There will be consolidation in asset management over time,” he said. However, “when two asset managers come together, it typically doesn’t have much impact on” Broadridge either, he noted. In the past, Invesco’s acquisition of OppenheimerFunds “had very little impact on us,” he pointed out.