Barnard Jacobs Mellet (BJM) has been bought out by FirstRand for R4,50 a share. According to a statement by FNB, BJM Private Client Services will fall under FNB’s Wealth Segment.
It has been common knowledge in the market that the private client business was up for sale after BJM Securities was bought by Renaissance, a Russian private investment bank, in May this year.
According to Michael Jordaan, CEO of FNB, there will be little change for the 11 000 existing clients as the BJM brand is to remain, along with the current business model and operations.
But as anyone in the private client business will tell you, it is all about relationships. The acid test will be the reaction of the BJM relationship managers, who are responsible for running the clients’ portfolios. A team walk-out would be devastating for clients.
The response from BJM staff so far appears positive as FirstRand will be able to offer the BJM business a substantial balance sheet and potential client base of 45 000 high net-worth individuals, which will allow the team to grow the business far beyond what a small independent stockbroker could achieve. The deal may in fact help to keep and attract further talent.
FirstRand as a brand is known for its innovation and positive working environment and has a philosophy of allowing employees to run their own businesses within the group. BJM staff believe that they will be able to continue to operate fairly independently, just with the added advantage of a parent company with deeper pockets and better economies of scale.
FirstRand would also have tested the waters carefully with BJM employees to makes sure there was a strong culture fit, because when you are buying a relationship business, success is only possible if all parties are fully on board. Jordaan is probably correct in stating that “the transaction can fundamentally be described as mutually beneficial”.
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