AI Will Lead to Productivity Gains, Stifel CEO Says

Really beating across the board when it comes to your net revenue, whether we're looking at investment banking, asset management or wealth management. But let's focus in on wealth management since that is by far your biggest revenue generator at this point. What led to the beat and what do you see sort of continuing that momentum? Well, first of all, wealth is is the durable part of our model. And it has been for years. You know, our institutional businesses, we've had more operating leverage in that. But turning back to your question, you know, well, we've we've continued to gain market share. We won J.D. power and, you know, employee advisor satisfaction as voted by the advisors made its number one for four years in a row. And so we will grow, uh, through a recruiting. But importantly, um, we're going to see a lot of productivity gains from I, I mean, it's a topic not only of the day but of the year, and we see the ability to just do a lot more business in the same sort of container. Uh, we have a great, uh, business model. And, uh, I see it continuing. And when it comes to I want to talk about that a little bit in the context of advisor recruiting, because you said on the earnings call, uh, today that advisor recruiting me remains as competitive as I've ever seen. I wonder how much you know you're competing against. I feel like you and I have had this conversation before, but it's just getting ingrained in the muscle memory, especially of the younger generations, that, I mean, you fire up an LLM for advice. And I would imagine increasingly that extends to financial advice as well. Well we'll see. I you know, I think that there's a there's sort of a disconnect, Katie, because, uh, you know, every time something comes out about an hour, I'm doing something. All the while, stocks, including ours, get hit. Yet every wealth firm, uh, in the country. Uh, is it, uh, recruiting at the highest level ever experienced advisors. So which is is it that, uh, the alum alums are going to replace advisors or are advisors important? I'm on the side that the advisors are the last mile of advice and that, uh, as I gives you more abundant information. But as you get more abundant information, the value of advice goes higher. So that's where I land on that. We'll see. Uh, but, you know, there was an there was a recent survey that said from 2009 to 20 23 or 24, I think it's by Bloomberg, frankly, that, uh, you know, the affluent people that would use advice was 30%. Now it's up to 60. So I you know, I'm in the advice game. Yeah. And that was by Peter. Thanks for shouting us out Ron. Always appreciate that. Yeah. Hey, I am curious about, uh, just a couple of interesting things that jumped out at me, and particularly with this earnings, obviously, we knew, uh, the Ivy business was going to do great. Wealth was doing great. I was taking a look at fund banking. And I know this came up on the conference call. Uh, there was very strong growth there, and I was kind of doing the calculation. Something like about a quarter of your funded loan portfolio right now is fund banking. I am curious, is this, uh, sort of a longer term growth opportunity for you, or are you just kind of taking advantage of what's been happening in the moment with regard to what's going on behind the scenes in private capital? Well, look, I, I would I would like to think we we never try to do anything in the moment. I mean, we just, you know, we always have a strategy. I would like to tell you that. And it is true. We have we we got into uh, when, when sp b and all that happened. We recruited a lot of people. We went from maybe three people to probably nearly 200 now in venture lending and fund banking, and we view it as an integral part of, of, you know, that ecosystem. Not only can we lend to companies, we are helping the sponsors in the venture funds, and we're providing wealth management to the founders, and we're doing investment banking. So it's a great growth opportunity for us. And I'm excited about it. And uh, I think you you noted, uh, the trends and I would expect those to continue. Are there any concerns here about private market valuations and then maybe potentially being out of sync with what we're seeing with regards to public valuations? Uh, well, we've seen that. We've seen that for uh, for a while. I mean, uh, you look at just when I'm asked about acquisitions and I've done probably as many acquisitions as anyone in my career, at least in building Steve. And today, you know, I'm being shown deals that, you know, let's say 15 times adjusted EBITDA and I'm trading at eight. Uh, so there's a disconnect right there, which tells you, by the way, why buying my stock instead of doing acquisitions? Uh, I also want to talk a little bit about investment banking, uh, beating when it comes to revenue there versus, uh, estimates. We know that Steve was one of, uh, really a plethora of banks that were involved in the space IPO in some capacity. Really curious what that process was like. And, you know, moving forward, now that that's in the rearview, you know, how you can sort of build on that. Well, look, I they it was that was a well managed process. Uh, you know, I hate complimenting my larger firm competitors, but but that was a well-run process for us, though. It didn't really drive, uh, our results. It did drive the results, I think, of the larger firms. Uh, but, uh, you know, we we were certainly involved. We expect to be involved in the other ones. But for us, what you saw was the breadth of our platform. And it was not. Most people think oh you know steeples depository M&A. Now we we that was actually somewhat muted for us. Relative to healthcare technology and industrials. And so we have a pretty broad based diversified platform. And you saw that come through. Investment banking was up over 40%. Uh Brian are you planning to do any more acquisitions anytime soon? Anything you want to tell us? Hey, uh, you know, I'm always evaluating things, but as I said, uh, I think the private, uh, valuations, especially with leveraged returns, has, has made those things. I'm a little, little cautious. So we're not just going to do a deal for deal sake. I'm not looking just to do a print. I'm not looking just for revenue. We had 24% return on tangible equity for the quarter and for the year. And frankly, last year that's my measure. Return on invested capital. And some of these deals require some Excel, you know, growth assumptions to make them work that probably I'm just not comfortable with at this point. But hey, we'll see.