From the June 2006 issue of Research Magazine • Subscribe!

'RBC Dain Rauscher Grows on Rivals Home Turf

RBC Dain Rauscher knows how to pick its battles. It's going head-to-head with the likes of Wachovia Securities in, you guessed it, the Southeast.

"Their appetite is way up," says recruiter Nicholas Ferber of the Sanford Barrows Group in North Miami, Fla.

Never mind that RBC Dain's base in this part of the U.S. -- Charlotte, N.C. -- is home to both Wachovia and Bank of America (and some 950 miles from RBC Dain Rauscher's main operations in Minneapolis).

"The Southeast is important for the growth of RBC Financial Group, period," explains Darryl Traweek, 45, regional director for RBC Dain Rauscher. "We believe long-term that we are strongly positioned in one of the hottest growth markets in the U.S. and will continue to add high-quality, experienced financial consultants in these areas and, as growth warrants, will open more offices."

The Southeast has a good economy and a strong retirement market, Traweek says. "A nice percent of clients are retirees," and that figure should expand as more boomers come into the area, he adds.

The brokerage, which includes some 1,700 financial consultants, began its push into the Southeast about three years ago, according to Traweek. That's when about 20 advisors working for the securities arm of Centura Banks of Rocky Mount, N.C. -- bought by the Royal Bank of Canada in 2001 -- came over to RBC Dain. Its Florida operations got off the ground in early 2004, with the acquisition of the William R. Hough investment firm of St. Petersburg, Fla. Operations in the Sunshine State now include four offices.

But the campaign in the Southeast really got underway in August 2004 with the hiring of North Carolina native Tim Jones, 44, as senior vice president and director of its new Charlotte complex. At the time, Jones served as the executive director of Morgan Stanley's North Carolina operations, overseeing 200-plus advisors and nine branches. Previously, he'd been a regional director for Wachovia; he worked for Wachovia and a firm it bought in 1999, Interstate/Johnson Lane, for a total of 15 years. "I've seen both sides and been in the middle," says Jones. "I should be useful as we move through this growth."

"We are thrilled to have Tim lead our retail expansion efforts in the area," says Traweek, who's been with RBC Dain for 12 years and cut his teeth in Dallas with Merrill Lynch and Dean Witter.

Outsiders are equally supportive. "Tim Jones is a good leader," says Chip Roame of Tiburon Strategic Advisors in Northern California. "The Wachovia folks really liked him."

RBC Dain opened its Charlotte office in March 2005, seven months after Jones was hired, and its Atlanta office in April 2005. "In most cases in Charlotte and the Southeast," says Jones, "I have relations and contacts to touch on, especially with a recruiter focus."

His professional network, in combination with the contacts of his RBC Dain colleagues, seems to be having quite an impact. A year ago, the brokerage firm hired Alan Franco away from Wachovia to head its Atlanta branch. He was joined by four other Wachovia employees, including a financial consultant and a branch-service manager. And three months ago, the Alexander-Asher Investment Group came over from Wachovia, while Robert Pierson joined from Smith Barney.

In Charlotte, RBC Dain drew Chic Huber of Banc of America Securities, and Doug Etheridge and Bob Stiles of Wachovia, in March 2005. The $1 million Jones-Barlow-Parrish Group came over from Legg Mason in November 2005.

Etheridge, for instance, has a $1 million-a-year derivatives-based practice for both corporations and clients. He'd worked with Jones at Wachovia and spoke with him when his contract there was up. "I prefer the regional style and size," Etheridge explains.

And it seems to work for him. Business is up at least 5 percent, the North Carolina native says, since he's been with RBC Dain. "It's a fresh approach. I can do as I want, as long as it's ethical and profitable."

The 20-year industry veteran says that among the support he enjoyed during his transition was the ability to keep his same toll-free number, which was just switched from the 888 area code over to 866. "That's how committed they were -- and that really helped the customers out. It doesn't sound like a lot, but it is," shares Etheridge.

The GFS & Associates Group of St. Petersburg signed on with RBC Dain in February 2006, making a switch from Merrill Lynch. It's led by Greg Willsey, an 18-year Merrill veteran. "We are very excited to welcome this team to RBC Dain," says Jones, adding that the group should help the brokerage compete in the St. Petersburg area, which is home to Raymond James Financial.

Why are these advisors moving to RBC Dain? "Tim Jones, frankly, has a phenomenal reputation," says Braden Barlow, who met with Jones as a favor for a friend. "You can't discount his experience... and reputation for due diligence."

"RBD Dain is fairly small in the region, which means there is still a lot of room to build the brand and associate ourselves and our names with the brand -- both locally and regionally," explains Barlow. "We could also work to put our thumbprint on the brand." As for the transfer of his clients, Barlow says RBC Dain "was ready and knew what it took to get it done."

While the firm has put together a sizeable group of financial consultants in the Southeast, it would like to bring that number up in the next few years, according to Jones. It's specifically looking at adding staff in Raleigh, N.C., and in Florida. RBC

Dain already has a presence in Winston-Salem, N.C.

The firm's target recruit? Those with at least five years of experience and a good book of business, RBC Dain execs say.

RBC Centura, its bank affiliate with 270-plus branches in five southeastern states, is a natural ally in this growth strategy. "We want this partnership for referrals of individual and corporate customers," explains Jones. "We expect the Centura to continue to charge forward and have great success," adds Traweek.

In addition to the support of Traweek, Jones and other execs, advisors can turn to Ben Mitchell -- a former senior vice president, southern sales manager and national sales

director of Smith Barney's consulting group division. RBC Dain tapped Mitchell, a 32-year industry veteran, in March 2006 as a vice president and wealth-management consultant for the firm in the South.

In addition, some advisors in the Southeast -- like Etheridge -- are going through RBC Dain's Accredited Wealth Manager certification program. The brokerage introduced the designation in 2004, which requires about 60 classroom hours and 90 self-study hours and a final exam. About 105 financial consultants have earned the designation so far, and 80 are now enrolled in the program.

"We want a large number of financial consultants to go through the program," explains Jones. With the designation, advisors are better able to help clients identify their financial goals, put plans together and then implement and monitor them. "It's a process," the

executive says.

Overall, RBC Dain's effort in the Southeast to date has been highly successful, Jones believes, and he expects the firm's momentum to continue. "We started from scratch, with zero name recognition in the Southeast," he explains.

The intense consolidation that regional brokerages have gone through means "fewer and fewer options for those who want a regional culture, not a big acquisition-style culture," Jones adds. "We have the best of both worlds" with some 1,700 advisors, an entrepreneurial environment and the support of RBC's capital-market resources and technology.

Still, the executive acknowledges that the Southeast region and Charlotte, N.C., are highly competitive markets. "Wachovia, for instance, has so many channels. They're a strong competitor," says Jones. And Bank of America, he explains, sees Charlotte as a test market for its wealth-management work. "A group just moved into our building" in the city's South Park district, he adds.

And, of course, the wirehouse firms have a strong presence in the area. There could be well over 1,000 advisors around town, Jones says, if you include the banks and the other investment channels.

Nonetheless, while several key rivals have nabbed RBC Dain reps in other areas, they haven't had such success to date in the Southeast.

RBC Dain has a number of factors working in its favor, says consultant Roame. "It's one of the best-run regional firms out there," he says. Plus, its corporate culture is known to be hands-off but supportive and includes the "humongous resources of RBC" and the local presence of Centura Banks.

The brokerage came together historically through the conglomeration of a number of brokerage firms, Roame points out, many of which were located in the center of the country. "To be in a growing part of the country, like the Southeast, is good for them," he shares.

"The challenges vary by market, but I see them all as tremendous opportunities," Jones says of the region.

And, advisors say, Jones is the one to exploit them. "I really believe that -- not to overstate -- Tim's reputation gets the initial look from folks as they consider switching."

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