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Updated on Friday, September 24, 2021
Stifel, Nicolaus & Company is a large broker-dealer and registered investment advisory firm that serves individuals and institutions. The firm’s dual designation as a broker-dealer and investment advisor means that clients have the choice of paying a one-time fee each time they buy or sell a security, or paying a continuous fee for ongoing advice from a financial advisor. Headquartered in St. Louis, the group has over 430 additional offices across the country.
The bottom line: Stifel, Nicolaus & Company offers portfolio management and financial planning services to individuals and institutions around the country.
- Large national network of advisors
- Fees are negotiable, as no set fee schedule exists
- Potential conflicts of interest related to compensation
|Assets under management (AUM): $117,820,023,852|
|Minimum investment: Varies by program, ranging from $5,000 to $1 million or more|
|Individual investor to advisor ratio: 46:1|
|Fee structure: A percentage of AUM, fixed fees, commissions|
|Headquarters: 501 N. Broadway
St. Louis, Missouri 63102
All information included in this profile is accurate as of September 21, 2021. For more information, please consult Stifel, Nicolaus & Company’s website.
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Overview of Stifel, Nicolaus & Company
Stifel, Nicolaus & Company traces its roots back to 1890, when its predecessor firm opened its doors primarily as a Midwestern brokerage firm that provided advice to individuals. The group first registered as a broker-dealer in 1936, and as a registered investment advisor in 1975. Stifel, Nicolaus & Company has continued to grow over many decades due to large acquisitions it has made as well as through organic growth.
Today, the firm employs more than 6,300 workers, most of whom are licensed as brokers. Indeed, the company’s main source of revenue comes from its brokerage operations. That said, about half of its workforce performs investment advisory roles including research. Many advisors also sell insurance.
The firm is owned by the publicly traded company Stifel Financial Corp. It operates many other brands across the financial industry including in wealth management, investment banking, securities brokerage and lending and trust services, among others.
A look at the firm’s founder
Stifel, Nicolaus & Company dates back to 1890, when Benjamin Altheimer and Edward Rawlings first began giving financial advice to individuals. Seven years later, Herman Stifel joined as treasurer. The company credits Stifel for growing the firm over the next 40 years. Henry Nicolaus and his son joined the company in 1910, and the firm was rebranded as Stifel, Nicolaus Investment Company in 1923.
Stifel, Nicolaus & Company’s pros
- Large national network: With over 430 offices around the country, investors in many different locations stand a good chance of finding a Stifel, Nicolaus & Company advisor located near them.
- Accessible to non-high net worth: Unlike many registered advisory firms, which can require upwards of six figures to become a client, Stifel, Nicolaus & Company accepts clients with as little as $5,000 to invest. However, some programs may require much higher minimums of up to $1 million or more.
- Complementary financial planning: Many firms charge extra for financial planning help. While Stifel, Nicolaus & Company advisors can charge for this service, the firm says most advisors include it for investment management clients at no extra cost.
- Flexible investment options: The firm offers a broad menu of investment programs, allowing clients to decide how involved in investment decisions they’d like to be, as well as what types of investments they’d prefer.
Stifel, Nicolaus & Company’s cons
- Potential conflicts of interest: The firm earns money from groups other than its clients. For example, it is paid by many investment firms when clients invest in certain products. This compensation may create conflicts of interest because it gives advisors a financial incentive to recommend products that benefit them financially rather than solely considering a client’s investment needs.
- Unclear portfolio management fees: No standard fee schedule exists at Stifel, Nicolaus & Company. Instead, clients negotiate fees with each individual advisor. Thus, clients won’t know how much they will pay before connecting with each advisor, making comparison shopping difficult.
- Not all advisors can offer all services: Only certain advisors can participate in some account programs, such as the firm’s Vantage program. Be sure to specifically ask potential advisors about what services they can and cannot offer, especially if you’re interested in one program or service in particular.
- Pays for referrals: Nearly 50 other firms solicit advisory clients for Stifel, Nicolaus & Company. Although clients don’t directly pay these fees, you should keep it in mind whenever someone recommends the firm to you. Ask why the firm is a good fit for you to ensure it’s not being recommended simply because it pays others to promote it.
- Disciplinary history: The firm discloses many disciplinary actions. See more on this below.
What types of clients does Stifel, Nicolaus & Company serve?
Stifel, Nicolaus & Company boasts a wide variety of individuals and institutions on its client list. The bulk of the firm’s assets under management come from individuals, both who are and are not high net worth clients. (For reference, the SEC defines high net worth individuals as those with at least $750,000 of assets to invest or a total net worth of $1.5 million.) Rounding out the firm’s client list are a few thousand institutions, including employee benefits plans, educational institutions and insurance companies, among others.
The minimum amount clients need to invest varies by program, ranging from $5,000 to $1 million or more. There is no minimum account size requirement for financial planning.
Services offered by Stifel, Nicolaus & Company
Stifel, Nicolaus & Company offers portfolio management and financial planning to individuals. For portfolio management services, clients can decide how involved they want to be. The firm offers discretionary relationships, where advisors have the power to make the daily trading decisions in the account, as well as non-discretionary management, where clients must approve each trade before it is executed. The firm even offers a program for its financial advisors to weigh in on assets held elsewhere.
Financial planning clients receive a written plan that can address a mix of financial issues. Possible topics include a client’s overall net worth, their retirement outlook, insurance needs, estate planning and the appropriate asset allocation. Financial plans do not include specific investment recommendations. Once an advisor has supplied the plan, it is up to the clients to decide if they’d like to implement the recommendations and, if so, as a brokerage or financial advisory client.
Given the firm’s dual designation as a broker-dealer and registered investment advisor, clients can work with the firm either through a brokerage account, an advisory account or both if they choose.
Here is a complete list of services offered by Stifel, Nicolaus & Company:
- Portfolio management
- Financial planning
- Pension consulting services
- Selection of other advisors
- Educational seminars and workshops
- Brokerage services
How Stifel, Nicolaus & Company invests your money
The firm offers numerous account programs and strategies, depending on your needs and how much you want to be involved in investment decisions. For clients looking for discretionary management of their accounts, they have the option of enlisting their financial advisor, an affiliated advisor or a third party as their portfolio manager. Or, they can hold on to that authority by opting for a non-discretionary account, where they have the final say on trading decisions. Clients also have the choice to bundle in transaction costs along with advisory fees, known as wrap accounts, or pay separately for advisory and trading costs.
The primary investments used in the firm’s programs are equities, exchange-traded funds (ETFs), mutual funds, options and fixed income securities. Other investment recommendations may include options, certificates of deposit (CDs), unit investment trusts, real estate investment trusts (REITs), publicly traded master limited partnerships and private investment vehicles such as hedge funds and private equity funds.
The firm has specific groups that select the recommended investment products in the various investment categories, such as mutual funds or alternatives. To come up with their investment recommendations, the team does not stick to one type of research but relies on a mix of methods including fundamental, quantitative and technical analysis.
The table below outlines the various investment programs offered by Stifel, Nicolaus & Company:
|Stifel, Nicolaus & Company Investment Programs|
|Program name||Investment strategy|
|Wrap fee accounts|
|Fundamentals Program||Advisors help clients choose from model portfolios of mutual funds, ETFs and equities|
|Horizon Program||Provides non-discretionary management services like recommending and advising on specific investments|
|Custom Advisory Portfolio Program||Management of various investments, including ETFs, mutual funds and various portfolios, within a single account|
|Opportunity Program||Designed for high net worth investors who want comprehensive, discretionary investment management, offered by independent or affiliated groups|
|Solutions||Individualized investment management offered through a client’s Stifel advisor on a discretionary basis|
|Connect Program||Stifel advisor connects clients to another advisor for account management, with whom a separate agreements is signed|
|Non-wrap fee accounts|
|Summit Program||Stifel advisor consults on assets held elsewhere; intended for high net worth individuals or institutions|
|Vantage Program||Offered only by certain Stifel advisors, this program manages client money on a discretionary basis according to an appropriate strategy; clients pay through broker commissions|
Fees Stifel, Nicolaus & Company charges for its services
Investment management fees: For ongoing investment management, most clients of Stifel, Nicolaus & Company will pay an advisory fee that is calculated as a percentage of assets under management. In some cases, the firm may agree to a fixed fee instead. The advisory fee is typically negotiable, with the rate determined based on factors including the amount you have invested, the nature and level of advice you want to receive and the investment products you prefer. The firm does have set limits on how much its advisors can charge. Maximum fees range from 1% for non-wrap accounts to 2.50% for wrap accounts.
On top of the advisory fees, clients may face additional product and other fees, such as third-party management fees, custodial fees and transaction fees for non-wrap accounts, among other costs.
Financial planning fees: The financial planning fee charged by Stifel, Nicolaus & Company is also negotiable but typically has a maximum limit of $5,000, with the exact rate dependent on the complexity of a client’s situation, the amount of assets being considered and the scope and range of services provided . That said, the firm notes that most financial planners provide this service at no charge to clients.
Stifel, Nicolaus & Company’s disciplinary disclosures
Stifel, Nicolaus & Company discloses a number of disciplinary actions over the prior decade, which is not necessarily out of the ordinary for large firms employing thousands of workers. For reference, the Securities and Exchange Commission (SEC) requires all registered investment advisory firms to disclose to the public on their Form ADV any criminal, civil or regulatory actions against the firms or its employees or affiliates that a potential client would deem material when evaluating the firm and the integrity of their leaders.
Some of the disciplinary disclosures against Stifel, Nicolaus & Company over the last 10 years include:
- 2021: The firm consented to allegations from the Financial Industry Regulatory Authority (FINRA) that the group did not supervise an investment advisor who had client money heavily invested in the precious metal sector. The firm paid a fine of $100,000 and reimbursed one of the advisor’s former clients.
- 2021: The firm consented to paying a $325,000 fine after the New York Stock Exchange alleged that the firm failed to adequately safeguard material non-public information.
- 2020: The firm, without admitting or denying the findings, was censured and paid a $1.75 million fine in response to claims from FINRA that the firm did not adequately supervise when clients did early rollovers of unit investment trusts (UITs), which resulted in larger sales charges than they would have faced had they held the products to their maturity dates.
- 2019: Stifel paid a $2.7 million fine in response to the SEC censuring the firm, saying it failed to submit complete and accurate information in response to SEC requests.
- 2019: Stifel self-reported to the SEC that in certain instances customers were sold mutual fund share classes that charged higher fees than were otherwise available.
- 2018: The firm paid a $300,000 fine, without admitting or denying wrongdoing, after Massachusetts regulators alleged the firm failed to adequately supervise one of its registered representatives.
- 2017: The SEC alleged the firm failed to adequately implement policies and procedures to track certain third-party managers when they used other brokerage companies to place trades, known as trading away. This move led to customers paying higher fees than they otherwise would have.
- 2016: The firm resolved allegations from the SEC that five Wisconsin school districts were inappropriately sold certain collateralized debt securities. The firm paid a $22 million fine.
- 2016: Without admitting or denying the findings, the firm settled charges from the New York Stock Exchange that it was placing proprietary trades ahead of customer trades and thus getting more favorable outcomes. The firm paid a $275,000 fine.
- 2015: The firm was censured and paid nearly $3 million in restitution to clients after the firm sold clients more expensive mutual fund shares than they were eligible for.
- 2015: Stifel became one of 36 firms that settled with the SEC on charges that an affiliate had sold municipal securities using materially misleading disclosures. The firm paid a $500,000 fine.
- 2015: Stifel paid a $35,000 fine after it failed to appropriately register its chief compliance officer and 15 other employees.
- 2014: FINRA alleged the firm failed to execute transactions fully and promptly, and failed to conduct adequate due diligence to ensure the customer got the most favorable rate. Stifled paid a $55,000 fine.
- 2014: Without admitting or denying the charges, the firm settled FINRA charges that it failed to maintain an adequate money laundering program to detect certain suspicious activities. Stifel paid a $300,000 fine.
- 2014: The firm paid $30,000 in monetary fines after FINRA alleged the firm sold agency bonds at an unfair price to customers.
- 2014: The firm paid a $450,000 fine to settle charges from FINRA that certain advisors sold non-traditional ETFs to customers without properly understanding the products. The firm allegedly failed to give its advisors proper training and education on the products.
- 2013: The firm paid a $20,000 fine to settle charges from FINRA that the firm reported inaccurate information on customer confirmations.
- 2013: The firm resolved a case from FINRA that claimed the firm, in certain months of 2008, 2009 and 2010, failed to buy and sell bonds for customers at a fair price. Stifel paid a fine of nearly $100,000 and was censured.
- 2012: The firm consented and paid more than $1 million to settle charges, without admitting or denying wrongdoing, from Missouri state regulators that it failed to adequately supervise a former Missouri advisor who sold unregistered securities and conducted business in a fraudulent manner. The firm also failed to maintain required records.
Additionally, the firm discloses many actions against specific individuals or advisory affiliates, so be sure to check your potential advisor’s disciplinary history on FINRA’s Brokercheck or the SEC’s Action Lookup tool.
For more information about Stifel, Nicolaus & Company’s disciplinary disclosures, visit its IAPD page to read its Form ADV and ensuing disclosures.
Stifel, Nicolaus & Company’s onboarding process
- Contact the firm or an advisor: Find a Stifel, Nicolaus & Company advisor or branch office near you by searching on the advisor search tool offered on the firm’s website. You can also call the company at (866) 697-8433.
- Be prepared to discuss your situation, goals and needs: Advisors at Stifel, Nicolaus & Company will determine the best plan of action based on your individual investment goals, financial circumstances and other unique factors. Advisors then provide clients a written agreement outlining their specific obligations to the client. Once the agreements are signed and all the paperwork has been submitted, it may take several business days to get your accounts up and running.
- Receive regular updates and reviews: Your account undergoes periodic reviews. You will receive regular account statements showing trades and balances.
Where Stifel, Nicolaus & Company is located
Stifel, Nicolaus & Company has a large national network across the United States, with over 430 offices in total. On the firm’s formal ADV disclosure, the firm lists some of the states it houses advisory offices. The list of those states is below. That said, the firm has many more offices in other states not listed here.
- New Jersey
- New York
To find out if there is an office near you, check out the firm’s branch directory for a complete list of states where the firm has a wealth management office.
Is Stifel, Nicolaus & Company right for you?
Clients looking for a local advisor who will accept accounts smaller than six figures can consider Stifel, Nicolaus & Company as a potential fit. Many advisors will even include basic financial planning information for no additional cost, which is not always the case for financial advisory firms.
Advisors do potentially face conflicts of interest, however, since they receive compensation for selling certain investment products. Also, fees are unclear since there is no set schedule, and may run high if advisors charge close to the maximums the firm allows for wrap fee programs. Thus, if clients aren’t comfortable negotiating their fees, or would prefer that their advisors aren’t paid by investment firms to recommend products, they may want to consider other firms.
The bottom line is that how financial advisors are paid varies across the industry. It’s the client’s job to understand how any potential advisor is paid, and make sure they are comfortable with the arrangement. Before choosing an advisor, take the time to research a few options to ensure you find the right advisor for you.
The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.