The broker-dealer with record US$496 billion client assets has won the Best Educational Initiative accolade at the SRP Americas Awards 2024.
SRP sat down with Nataliya Popel (pictured), head of structured investments at Stifel Financial, to talk about how investor education has helped the firm achieve a projected 30% annual growth for its structured product sales.
The St. Louis, MO-headquartered company recorded US$496.3 billion client assets in its global wealth management unit, up 20% from a year ago, and housed 2,357 advisors including 114 independent contractors as of 30 September, according to its latest earnings reports.
Advisory revenues increased 40.7% to US$136.9m at Stifel Financial in Q3 2024 year-on-year (YoY), accounting for 56.3% of its investment banking revenue. The volume leads to US$387.5m advisory revenues in the first nine months, a 15.3% increase YoY.
How has your structured product business fared this year?
Nataliya Popel: It’s set to be over US$3 billion traded notional for structured products by year-end, which will be over 30% growth YoY.
We’re now fully back to holding in-person activities, focusing on regular branch visits and meetings, just like before the pandemic
We’ve reached over US$2.5 billion so far this year, with the majority coming from Stifel’s private client network along with some participation from the Stifel independent advisor network, which is growing. North of 87% of volume is in SEC-registered notes while the remainder is across exempted 3(a)(2) notes and market-linked certificates of deposit (MLCDs).
We’re now fully back to holding in-person activities, focusing on regular branch visits and meetings, just like before the pandemic.
Tell us the progress you’ve made in investor education this year?
Nataliya Popel: Our partnership with iCapital in investor education and request for quote (RFQ) dates back more than five years. We’ve been working together to further expand these capabilities every year.
Ideas to Action is a monthly call hosted by our macro strategists. Its ideas from our chief investment officer (CIO) have been a big focus for Stifel for the past few years, providing our advisors with actionable, timely, and opportunistic ideas based on the current market environment.
We also utilize iCapital Learning Center modules and FINRA structured investments training modules for advisor training certification.
Stifel’s annual ‘Blueprint’ advisor conference connects Stifel advisors with the firm’s various product desks. It offers us a tremendous opportunity to educate advisors on the new and enhanced product capabilities we offer while helping us strengthen the connectivity between our team and our advisor base.
How has the demand for structured products shifted at Stifel?
Nataliya Popel: With rates being higher, traditional fixed income offers attractive yield opportunities without equity exposure, and traditional fixed income offerings have presented competitive alternatives to some structured investments this year.
What about payouts?
Nataliya Popel: We have seen a pickup in autocall participation notes predominantly linked to SPX with a typical tenor of five years and an autocall feature in one or two years. If the note gets called, the investor would have a shorter investment or one- or two-year maturity, that tenor typically priced with a cap anyway.
If it’s not called, the investor ends up with an uncapped investment at maturity linked to a broad U.S. index. So those have been popular because of the combination of growth and income elements. We have seen a pickup in those structures compared to prior years. About 20% of the volume is in growth structures.
What offerings would you highlight in the past year?
Nataliya Popel: The S&P 500 (SPX) has been a very strong focus for the overall structured investments market this year. Our investment strategy team, with whom we work closely, has been more focused on the S&P 500 Equal Weight Index (EWI).
With some of the stocks that have run up so much making up a huge portion of SPX, EWI seems to be better positioned for large cap U.S. equity stocks. We’ve seen demand on both growth and income structures this year linked to the S&P 500 Equal Weight Index.
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