Merrill Lynch & Co. yesterday said it had agreed to buy Advest Group Inc., a subsidiary of French insurer AXA Financial, for $400 million. The deal will add more than 500 financial advisers to Merrills existing network of over 14,400 brokers.
In acquiring the Hartford-based Advest, Merrill Lynch will add 1,560 employees and increase its foundation of high-net-worth financial advisers. Merrill will absorb three key Advest business practices: the Private Client Group, which has 515 financial advisers, including the municipal retail business of Lebenthal & Co.; the Boston Advisers group, which manages over $3 billion in equity and fixed-income portfolios for individuals and institutions; and the Capital Markets Group.
In a prepared statement, Robert J. McCann, vice chairman and president of Merrill Lynchs Global Private Client Group, said the move was intended to bolster the firms wealth management business.
What the deal could mean for the municipal practice of Lebenthal is not clear, although its network of retail brokers would appear to be a nice addition to Merrills sales force. When reached for comment, Lebenthal chairman emeritus Jim Lebenthal would only say that the deal could be good fit for Lebenthals business.
The primary rationale for this deal was to increase its retail brokerage business, and munis are an attractive product line for high net worth individuals, said Jeffery Harte, a senior research analyst with Sandler ONeill & Partners LP. Merrill was looking to expand its financial adviser ranks, and Advest has a pretty strong broker retail network.
Merrill Lynchs brokers are the most profitable in the industry, generating on average $711,000 each in revenue last year, the firm reported.
For AXA Financial, selling Advest will allow the company to concentrate more on its core business of life insurance and annuities.
While Advest is an excellent company with a strong reputation in the marketplace, its business is better aligned with Merrill Lynchs Global Private Client Group, AXA Financials president and chief executive Christopher Condron said in a prepared statement.
AXA Financial acquired Advest in 2004.
