Legg Mason Investment Counsel & Trust Co. will become part of Stifel's global wealth management business after the deal, terms of which were not disclosed.
Read MoreM&A fever – the coming epidemic
Legg Mason's chief executive Joseph Sullivan, who was put at the helm in February last year, has been trying to reverse a long record of net quarterly withdrawals by customers tied to past performance problems.
Under Sullivan, the Baltimore asset manager has sold smaller businesses and pushed for new products in the past year.
It shed its international equities investment unit in August and sold back to managers its private capital management unit in July.
The deal with Stifel is expected to close in the fall of 2014, the companies said in a statement on Wednesday.
Legg Mason's shares closed at $49.19 on Tuesday on the New York Stock Exchange. Stifel's shares closed at $44.88 on Tuesday.