Legg Mason...Good, Bad and Ugly

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Jun 2, 2005 1:07 pm

Opinions on this firm...for career changer?


Want to hear the good, the bad and the ugly...if there is any.

Jun 2, 2005 3:28 pm

Legg has historically been held to be as a very good quality regional firm.  But, as you'll see from the link below, their brokers may soon be a part of Citigroup.


http://www.bloomberg.com/apps/news?pid=10000103&sid=alzQ kaWJejbg&refer=us

Jun 2, 2005 5:27 pm

Why would this be a good business decision for Citigroup?

Jun 2, 2005 8:51 pm

I've been with Legg for just over a year.  From what I've
experienced there is excellent management support and a laid back,
comfortable work setting.  It's not as cutthroat as some of the
larger firms (so I've heard).  



One of the biggest drawbacks that I've experienced is the outdated software and technology support.



Of course this is all going to be a moot point if the deal with Citigroup does go through.

Jun 2, 2005 10:04 pm
djnick1:

I've been with Legg for just over a year.  From what I've experienced there is excellent management support and a laid back, comfortable work setting.  It's not as cutthroat as some of the larger firms (so I've heard).  

One of the biggest drawbacks that I've experienced is the outdated software and technology support.

Of course this is all going to be a moot point if the deal with Citigroup does go through.


Would you consider being absorbed by CitiGroup a Good Thing? What will that do to the laid back lifestyle you have been enjoying?

Jun 4, 2005 1:06 pm

I also have been interviewing with Legg Mason. This deal with Citigroup apparently as a high probability of occurring.


For someone starting new in the business, it would seem to be a bad decision to accept an offer from Legg Mason. Citgroup's Smith Barney is nationwide with 10- 12 times as many brokers as Legg Mason brokers, which is an east coast regional brokerage.


Both company are selling what they don't want, not buying what they do want. This will solve regulatory issues for both companies and give them more AUM for there specific segment of the market.


It doesn't take a rocket scientist to figure out that only the top producers at LM will survive this consolidation.

Jun 4, 2005 3:55 pm

Coag, I think you're missing the point here. Citibank wants out of the
asset management business, but wants to expand its broker/ wealth
management side (to avoid regulatory issues and many Smith Barney funds
are underperforming). Legg Mason has been evolving into a pure asset
management firm over the years (Western Asset, Royce, etc).



Legg Mason almost pulled off the same deal last year with Merrill
Lynch, but pulled out because of the size and complexities. Legg Mason
brokers/ advisors have a high quality reputation and on average, are
exceptional producers compared to other firms. Most big wirehouses
would jump at the chance to get the Legg Mason brokerage arm. The big
issue is the right fit - many of the top producers might bolt if they
don't get the right firm .

Jun 4, 2005 8:04 pm

Here is part of the article from IBD. In a perfect world maybe it would work the way you are thinking. Unfortunately, the press doesn't see it the way you do. LOL !!!


Legg Mason would also rid itself of a brokerage unit that has become less crucial to its business.


"It finds a way for them to jettison a lower margin business and then wash their hands of any conflicts going forward," said Snowling, the Friedman Billings Ramsey analyst.


In addition, Legg Mason would have wide representation for its funds -- now largely limited to its own brokers -- through Citigroup and possibly other Wall Street firms.


"It's a grand-slam home run," said Bove, the Punk Ziegel analyst. "They wind up getting rid of the high-cost, labor-intensive delivery systems and get in return a business which has a faster secular growth rate with a higher rate of return.


The problem with Smith Barney, analysts say, is Smith Barney itself.


"They'd inherit $500 billion and obviously have to go in with a fire ax," said Cerulli's Phillips. "It's not growing a flower on the patio; it's rebuilding a house. It would definitely be the most challenging acquisition Chip's done to date.

Jun 5, 2005 11:40 am

This article is looking at the acquisition from the asset management
side, not the brokerage issue, in terms of Smith Barney. Legg Mason has
been evolving into a pure asset manager - it doesn't mean that there
are problems on the brokerage side.



 Legg Mason's previous acquisitions have been complimentary to
their business (allowing them to function autonomously). Intergrating
the Citigroup asset management unit would require a whole different set
of tools and strategy.



The deal is far from done - in fact, many would say it's unlikely. The
press can speculate all they want concernign a potential outcome, but
that's all it is - speculation.