Janney Montgomery Scott sheds investment bank under owner KKR and focuses on brokers

Philadelphia-based Janney Montgomery Scott LLC has confirmed plans to exit the investment banking business and will focus exclusively on beefing up its stock brokerage under its private-equity owner KKR, which bought Janney last year.

The firm has made what CEO Tony Miller called “a strategic decision” to sell the last of its banking units.

Investment bankers raise money for companies and governments by selling stock shares, bonds, and other financial instruments to investors, for a cut of the proceeds, a sometimes lucrative but hard-to-predict business. Research analysts help attract those clients by writing about their financial prospects.

Brokerage analysts sell stocks, exchange-traded funds (ETFs), and other approved investments. Business has soared with the U.S. stock markets in recent years. Miller, the Janney CEO, called investing in that business a better road to “long-term success.”

Janney plans to sell its last bond and investment banking units to Ohio-based Huntington Bancshares and its financial institutions banking, research, and sales units to New York-based Brean Capital. Janney officials hope to close the deals in early 2026. The prices haven’t been disclosed.

Janney, which recently added brokers in Texas among other states, will remain based in Philadelphia. The company employs around 900 in the region.

Regional commercial banks and other small to midsize financial institutions were among the last industry groups Janney investment bankers and analysts covered. Just last month, Janney bankers announced that they had advised Georgia-based First Southern Bank on its unusual $51 million sale to member-owned Community First Credit Union of Jacksonville, Fla.

Former Janney employees said Janney’s owners had the option of taking the time and money to build up the investment banking unit, such as regional brokerages Piper Sandler, Raymond James, and Baird & Co. have done in recent years, instead of cutting back and relying entirely on trading and investment volume that rises and falls with market prices.

Until the late 1900s, Philadelphia was a financial center, and generations of investment professionals — at firms started by Stephen Girard, Jay Cooke, J.P. Morgan’s mentor A.J. Drexel, the predecessors of what’s now Morgan Stanley Wealth Management, the Butcher clan, as well as Janney and smaller firms — raised money for enterprises ranging from the Pennsylvania Railroad to Donald Trump’s ill-fated Atlantic City casinos. Janney notoriously fired critical analyst Marvin Roffman in 1990 at Trump’s insistence.

Successful investment bankers were paid a percentage of the deals they closed, built Main Line and Shore estates, and established branches in other cities.

But even locally based companies now bank with giant Wall Street firms. Janney’s brokerage network, juiced by the relentless rise in the U.S. stock markets, has lately accounted for more than 90% of Janney’s sales, with investment banking only a thin sliver, according to a statement the company gave The Inquirer.

“The big investment banks are feasting on deals,” said Robert Costello, a veteran Philadelphia-area money manager. “But the small deals have been drying up, and if they are getting rid of the municipal-bond desk, there’s nothing left.”

“It’s ‘another one bites the dust,’” said Ryan Connors, a Bucks County-based former Janney analyst who covers utility stocks for Northcoast Research.

“Philadelphia is thriving as a city, but our business has left it,” Connors said.

Yet investment research has survived the decline in regional investment banking, he added.

When Connors left Boenning & Scattergood, a Philadelphia investment bank where he had been director of research before it sold and shut down in 2022, “they told us [stock] research was dying.”

But Connors said research-based firms like his employer are doing well because hedge funds and other large investors have proven willing to pay for financial research.