Top Regional Brokerage Firms

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Securities brokerage firms used to be divided into two main categories: wirehouses and regionals. The wirehouse name referred to the then-modern practice of using telegraph wires to enable the firm to set up small branch offices across the country to do national business and trade on all regional exchanges. Regionals were smaller brokerage houses that had branches only in certain regions of the country.

Independents vs. Conglomerates

  • Several formerly regional firms have had branches all over the country for some time, and wirehouses such as Merrill Lynch, Smith Barney, and Dean Witter have been absorbed by banks. Independent securities brokerage firms include the traditional regional names plus the new breed of online brokerage firms. These firms emphasize investment securities brokerage while the financial conglomerates consisting of various financial service firms owned by banks, mutual funds or insurance companies offer a multitude of different financial services.

Leading Regionals and Online Brokers

  • Regional independent securities brokers that can be found on most Top 10 lists include: Allegheny Financial Group, Southwest Securities, Wunderlich Securities, Janney Montgomery Scott, Ameriprise Financial, Raymond James & Associates, Stifel Nicolaus, Robert W. Baird & Co., RBC Wealth Management, Edward Jones and UBS Wealth Management Americas. The new non-wirehouse is the online brokerage firm, examples of which include: Charles Schwab, TD Ameritrade, E*Trade, Fidelity Investments, Scott Trade, and Sharebuilder.

Function of Regionals

  • Many regional broker dealers specialize in smaller municipal and corporate finance business. Smaller public companies are defined by the SEC as those under $700 million in revenues, and include start-up and young companies that are not doing large enough business to meet the compensation needs of the big financial conglomerates. Though the term "regional" no longer has much practical significance, most of the traditional regionals were Midwestern firms with Janney Montgomery Scott from Pennsylvania, Crowell Weeden from the West Coast, the Southern firm of Raymond James, and New York-based Oppenheimer.

References

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