Liberty Planning More Deals After It Digests Wall St. Unit

Liberty Financial Bank Group will double its roster of bank clients with its pending acquisition of a rival investment services firm.

But a leading executive with Boston-based Liberty vows that more acquisitions will follow as part of a corporate strategy to become a dominant player in the market, providing brokerage and marketing support for bank investment programs.

"We're not going to stop here," said Porter Pierpont Morgan, president of Liberty Financial Bank Group.

Last Friday, Liberty agreed to acquire the preferred investment division of New York-based Wall Street Investor Services. The transaction is expected to close in 60 days. Neither side would disclose a price.

The much-anticipated acquisition is the latest step in the ongoing consolidation of companies that provide selling support for banks. The deal will increase the size of Liberty's client base to 120, making it a serious competitor to bank investment services firms such as Essex Corp., GNA Corp., and Invest Financial Corp.

Liberty Financial Banking Group is a subsidiary of Liberty Financial Cos., which also owns mutual fund and insurance companies.

"We think ultimately to really be a major player; the number of bank clients we should have is somewhere above 200," Mr. Morgan said.

The deal will yield Liberty almost 200 new bank brokers as well as the six sales managers who supervise them.

Mr. Morgan said Liberty was especially attracted to the sales managers because they had been employed by banks at some point in their careers.

"Wall Street had built an outstanding team of field management professionals that make things happen in a bank environment every day," Mr. Morgan said.

Denis Kelleher, chairman and chief executive officer of Wall Street Investor Services, said his firm is selling its banking unit to Liberty because it felt it couldn't compete in the fast-consolidating industry.

Mr. Kelleher said he looked to acquire companies himself, but he couldn't cut any deals. "We were trying to do that, honestly," he said. "It was easier said than done. We think everybody was waiting for a major consolidation like this, and we just took the plunge."

The acquisition also means the two-year-old exclusive endorsement of Wall Street Investors by the American Bankers Association is up for grabs, said John Wolff, managing director of the trade association's Corporation for American Banking.

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