Wachovia goes for brokerage
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Wachovia goes for brokerage
TEXT OF STORYSCOTT JAGOW: From the world of banking, another merger. Today, the country’s fourth largest bank, Wachovia, said it’s buying brokerage firm AG Edwards for almost $7 billion. Alisa Roth has the details.
ALISA ROTH: The combined company will be known as Wachovia Securities.
It’ll beat out Citigroup to become one of the biggest retail brokerages in the country, with more than a trillion dollars in client assets.
Analyst Richard Bove says companies like E*Trade and Ameritrade which let clients buy stocks and mutual funds directly are making the retail brokerage business less lucrative than it used to be. But he says that doesn’t necessarily matter to Wachovia.
RICHARD BOVE: The acquisition is to get hold of customers and then to use those distribution points, i.e. salespeople to sell a wide variety of products that go well beyond anything that AG Edwards was selling before.
The combined company will be based in St. Louis, hometown to AG Edwards. It will have 15,000 financial advisors and a big presence in 48 of the country’s 50 biggest metro areas.
In New York, I’m Alisa Roth for Marketplace.
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