People often asked me where in the world is St. Louis, I told them the Missisipi River, Budweiser beer, the McDonald Douglas (no longer a standalone company), etc.
I think A G Edwards could be counted as a St. Louis icon too. But I did not realized it’s more than 100 years old until today it’s being acquired by Wachovia. The rationale for the buy is Wachovia is looking for opportunities in the baby boomers’ wealth management. After this acquisition the combined company, Wachovia Securities, will manage $1.15 trillion, operate 3,350 offices and employ 31,000 people. It will be the No. 2 US retail broker firm. Merril Lynch is still the No. 1.
It’s interesting last night my former roommate and I was talking about a similar topic. A financial advisor called him, asking for 1.5% commission to manage my roommate’s money. We all laughed because we are generation X and Y, respectively. When my roommate told me in college, he paid his broker (Edwards Jones) 40 to 50 bucks to buy or sell a stock, I asked him why not use “Scottrade”. I think now he got it. But babyboomers will be different, I heard from a friend at Edward Jones that average account is about $ 1 m. I assume a lot accounts are belong to baby boomers. With a big asset, they need “so called” professionals so that they don’t need to worry about the up and down of the market. But will the “professionals” always do better? Some do; some don’t.
I think in China, similar opportunites exist but the market may take some time to develop. As I understand Chinese usually like to manage their own money.
The following is a picture of headquarter of A G Edwards, at market street and Jefferson Ave. St. Louis will keep the headquarter but the name will be changed to Wachovia when the deal close.