[pullquote]Is this a new wave of consolidation within the finance industry?[/pullquote]
The recent sale by Ameriprise Financial of its Securities America advisory services has led to a new “buzz” on the street.
The big question: Is this a new wave of consolidation within the finance industry similar to what we witnessed over the past two years?
Two differing opinions were quoted by Dave Lindoff for OnWallSteet on August 17.
1. S&P asset management industry analyst Chris Maimone thinks there are more to come if equity volume continues to trend lower due to marginal economic data coming out, but the consolidation is likely to come from the smaller players who have less staying power and flexibility. (Unlike the recent Ameriprise Financial deal which was due mainly to their desire to focus on their own brand; plus they made a nice profit on the sale.)
2. Another opinion comes from Haywood Sloan, principal at Diversified Services Group, who thinks current consolidations are just aftermath of the huge wave we saw in 2009-10, and are more about growth, not shrinkage.
Paul Reilly, CEO of Raymond James agrees with Sloan, stating that financial companies today are more liquid and less leveraged, so expects fewer failures and consolidations.
However it plays out, brokers are still on the move.