Top 15 Metros - Wild in Omaha - Fintech Securities & Investments
Today, at least in the financial world, Omaha is probably most famous for being the home of Warren Buffett and Berkshire Hathaway, "currently the 7th largest company in the S&P 500 Index by market capitalization and is famous for having the most expensive share price in history with a Class A share costing more than $250,000 each, having never been split.”
But for those of us old enough to remember, we knew it thanks to Mutual of Omaha’s Wild Kingdom. The show aired on NBC TV just before Walt Disney’s Wonderful World of Color on Sunday nights. Hosted and narrated by zoologist Marlin Perkins, Wild Kingdom featured Jim Fowler showcasing wild animals.
Or maybe you know it for the corn? Nebraska has always been synonymous with corn.
But now, Omaha will also be famous for making the Boulder Equity Analytics’ Top 15 List of the Largest Securities & Investments Fintech Markets, ranked by per employee revenue. In fact, as we discussed in an earlier post, it ranked #2 right after the New York metro area.
So, is Omaha’s ranking due to Berkshire Hathaway? Mutual of Omaha? Or maybe it’s companies like TD Ameritrade, Wealthplan, CWM or Securities America? Let’s dig into the data.
Securities & Investments sector in Omaha
What does the Securities & Investments sector look like in the Omaha-Council Bluffs metro area? To start, as shown below, over 70% of the 2015 addressable Fintech market is securities brokerage. Another 13% is portfolio management. This is much more skewed towards securities brokerage than the Midwest region (36%) so Omaha is a relative hotbed of securities brokerage business.
Again, our analysis uses ZIP Pointe Market Sizer. Market Sizer is our Tableau-based market sizing tool based on ZIP Code-level Census data on over 7 million private sector business locations.
In terms of business location size by sub-sector, nearly 76% of the locations are small (1 – 4 payroll employees). There are only 10 locations with 100 or more payroll employees. A bit under 40% of the locations are involved with securities brokerage, another 22% are in portfolio management and 24% are in investment advice (see below).
With respect to “hot spots” of potential Fintech spend per employee, business sites with over 20 employees in securities brokerage are at the top. Thirty (30) sites have a potential Fintech spend of at least $6,000 per employee.
Another way to drill into the addressable Fintech market in Omaha is by ZIP code. The following map shows the ZIP codes in the metro area color coded for addressable market size per employee. At the ZIP Code level, addressable Fintech market size ranges from $1k to $8k per employee. At the upper end, ZIP Code 68101 shows a per employee value of $8k. There is only 1 site in this ZIP Code and it only has 1-4 employees, in securities brokerage, probably a branch office associated with a much larger company. The other 2 top ZIP Codes are 68128 and 68154 with over $6k in potential Fintech spend per employee. We will focus in on them in a bit.
However, if we measure addressable market size on a per business location basis (another way to normalize the data), the map looks very different but yields similar conclusions. A shown below, the top ZIP Code in terms of potential Fintech spend per site is 68128 with over $700k. In second place is ZIP Code 68154 with a total of $126k per site.
But these two ZIP codes are quite different. ZIP Code 68128 has only 3 sites while ZIP Code 68154 has 81. And in terms of total potential Fintech spend, the ranking is reversed. ZIP Code 68154 accounts for 54% of the addressable Fintech market in Omaha while ZIP Code 68128 accounts for 12%. In third place is ZIP Code 68130 with another 9% in total potential Fintech spend.
A tale of two ZIPS
ZIP Code 68128 has the largest potential Fintech spend per business site at over $700k. But this is due to one large location as shown below (values in the chart are potential Fintech spend per employee).
Turns out this one large site is the headquarters of Securities America.
We caution that our estimates of potential Fintech spend at a company level are directional. Our Fintech estimates are derived from market aggregates and not from specific company revenue accounts.
Securities America, founded in 1984, helps financial advisers create more profitable practices. Through a series of acquisitions, the most recent by Ladenburg Thalmann Financial Services, it also offers more traditional services such as equity research, brokerage services and investment banking. On their website, the company says they currently have 575 employees.
We should note that the Census data only track payroll employees. Contractors are not included in these totals. So, the total employee count at any given location could be higher than what is shown here, especially sub-sectors that rely heavily on contracted labor.
ZIP Code 68154 has a much more varied representation of business sites, both in terms of size and in terms of sub-sector, as well as a larger number of sites (81). Securities brokerage accounts for 38% of the business sites with all the large sites (100+ employees) being in this sector. Portfolio management accounts for another 27% of sites and investment advice another 24%.
Wealthplan Partners, who provides financial planning and asset management services, is based in ZIP Code 68154 as is Carson Wealth CWM LLC, another asset management company. Although the representation is more varied, there does appears to be a dominant company in this Zip Code: TD Ameritrade.
TD Ameritrade consolidated employees from around the Omaha metro area into this ZIP Code in 2013. About 2/3 were relocated in the company’s new headquarters building and the remainder in other buildings nearby. At the time, the company says that 2,000 employees were relocated to the ZIP Code. Amerivest Investment Management, owned by TD Ameritrade and the largest financial advisory firm in Omaha according to Wealthminder.com, is co-located with TD Ameritrade in its ZIP Code 68154 headquarters building.
So what about Berkshire Hathaway and Mutual of Omaha?
Berkshire Hathaway’s headquarters is in ZIP Code 68131 and is not classified as being in the Securities & Investments sector; it is a holding company. Mutual of Omaha is classified as an insurance carrier so is also outside the Securities & Investments sector.
So, the Fintech Securities & Investments market in Omaha is powered by companies like TD Ameritrade and Securities America.
But in case you are wondering whatever became of Mutual of Omaha’s Wild Kingdom…it is back on the web with Stephanie Arne hosting.
Part 1 - How Big is the Fintech Addressable Market?
Part 2 - Fintech Alert: A Lot of Savings and Loaning in Springfield Massachusetts
Part 3 - Breaking Down Fintech - the Securities & Investments Sector