Boenning & Scattergood joins California-based brokerage firm, but its investment bankers split for Janney

Boenning & Scattergood, one of the last of the full-service Philadelphia-area investment firms, said Friday it has completed its deal to be acquired by LPL Financial Inc., a national brokerage based in San Diego.

But not everyone is making the trip.

While 40 Boenning financial advisers, and their clients with $5 billion in investment or trading assets, are joining LPL, a team of 20 investment banking professionals are heading instead to Philadelphia-based Janney Montgomery Scott, an arm of Montgomery County-based Penn Mutual Life Insurance Co. The group going to Janney includes managing directors who head key functions such as insurance deals and investment research.

“We are excited to join a firm with the financial stability, resources, and expertise” of Janney, which will “help our clients,” said Chad Hull, former head of Boenning’s investment banking group, in a statement.

His new boss, Janney investment banking chief Matt Veneri, called it “a strong cultural fit,” and said the new hires raise Janney’s Capital Markets team to more than 200 people.

LPL managing director Rich Steinmeier praised Boenning & Scattergood as a “distinguished brand” and said it will be able to grow with LPL’s backing. As part of the larger firm, “they have the freedom to run their business on their terms,” with less distraction from day-to-day operations.

The decision to sell was made earlier this year by Boenning & Scattergood’s controlling owner, Harold Scattergood Jr., 74, after he determined his children would not be taking over the business, according to company insiders. Scattergood didn’t return calls seeking comment.

Scattergood last month told The Inquirer that the firm was spinning off certain investment teams, such as public finance and municipal securities trading. Joseph Muscatello, of Boenning’s public-finance team, left earlier this year to join St. Louis-based Stifel.

Scattergood had also said the firm’s private-investments advisory business, 1914 Advisory, and its brokerage arm would continue to bear the Boenning & Scattergood name, even if that part of the company were to combine with another firm — as has now happened with LPL.

The arrivals from Boenning will modestly increase Janney’s investment banking group, which focuses on mid-sized companies. The Janney team says it raised $47 billion for 283 business and other clients in the past three years. Janney says the Boenning group raised $1.5 billion in 120 capital-raising deals for local governments, healthcare, banking and other firms over the past three years.

LPL counts 20,000 financial advisers nationwide at the firms it owns or works with.

Boenning & Scattergood, based in West Conshohocken, was founded in 1916. At the time the city was a financial center: while not equal to Wall Street, it was home to some of the nation’s oldest and largest banks, insurers and investment houses.

Philadelphia sea trader turned banker and investor Stephen Girard and his private bank financed the War of 1812; Philadelphia investment banker Jay Cooke set up the first national bond salesforce to finance the Union victory in the Civil War; Philadelphia banker Anthony J. Drexel was a mentor to Wall Street’s premier financier of the early 1900s, J.P. Morgan. Smith Barney, the giant Wall Street brokerage now owned by Citigroup, grew out of two Philadelphia investment banks.

In recent decades, lower profits from individual stock trades, coupled with digital trading technology that lets professional investors work from anywhere, has enlarged the big Wall Street investment banks, while regional firms like Boenning have tended to sell to larger companies.