UBS going "upmarket". - Good move.

This week, Stifel Nicolaus announced it was buying 55 UBS wealth management branches spread across 24 states, which include $15 billion in assets under management, 320 reps and over $100 million in revenue. The St. Louis regional b/d will make an upfront cash payment of $27 million for the branches, which are said to consist of mostly lower level producers. UBS says the deal allows it to divest itself of producers that don’t fit into its high-net-worth strategy, and sell them to a firm that’s willing to take them on.

While it’s not the first time a firm has sold some of its branches to another b/d, Alois Pirker, senior analyst at the Aite Group, says the UBS/Stifel deal might spark a series of similar deals. “Ultimately there is over capacity at many firms right now. At Morgan Stanley, Smith Barney there must be people stepping on each other’s toes. There is plenty of opportunity to sell branches,” he says. In fact, D.A. Davidson says it bought two Smith Barney branches located in Washington and Oregon, which included 8 brokers, last November. Kerr says Smith Barney approached his firm about a possible sale. When asked about the deal, however, a Smith Barney spokesperson declined to comment. For more on this story, check out Registered Rep.’s Wealth Management e-newsletter.