Franklin Resources (BEN) is joining the consolidation wave in the wider brokerage and investment management industry as it is acquiring Legg Mason (LM). The deal is driven by the desire to obtain more scale as the investment management business is transformed by the emergence of ETFs which is really disrupting the industry and names like Franklin Resources.
While the deal provides scale and additional earnings power to reinvest into the business, the underlying positioning is not really addressed, having the potential to cause a continued overhang on the stock.