The Swiss just can’t seem to get enough of the U.S. retail brokerage business. With the ink still drying on its deal to purchase Piper Jaffray’s brokerage arm, UBS announced today it will now buy Cleveland-based McDonald Investments, KeyCorp’s brokerage unit.
“Arguably, McDonald has the highest production of any regional brokerage in the country,” said Marten Hoekstra, head of Wealth Management U.S. at UBS, who spoke to Registered Rep. from Cleveland where he was meeting with top management and advisors.
For a price of up to $280 million, according to the release (click here to view the release), UBS will acquire up to 340 financial advisors in 51 branches with 165,000 accounts and total client assets of $30 billion. That will be added to the roughly 8,100 advisors and more than $600 billion in assets under management UBS has after its merger with Piper Jaffray ( click here to read about that deal). Hoekstra hopes the McDonald acquisition goes as smoothly as the Piper deal ( click here for an analysis of what UBS did right last time).
Hoekstra has said repeatedly that UBS is interested in purchasing three types of firms: retail brokerages, trust banks and independent RIAs. However, finding candidates that are both “financially and talent accretive” has been difficult, he says.
McDonald Investments is an ideal fit for UBS, says Hoekstra, especially given its strong focus on high-net-worth clients and level of annuitized revenues. “For a regional firm, they do an astounding amount of recurring revenue, more than any other national firm,” he says. According to the terms of the deal, Hoekstra says he is unable to disclose many of the metrics—including those regarding advisor productivity—until after it closes. However, he says the numbers of McDonald reps are “quite impressive” compared to the nearly $600,000 in average production boasted by UBS reps.
