Raymond James Upbeat on Morgan Keegan Retention After Visits

The company also says it's raised nearly $360 million for the deal through a recent public offering

Raymond James (RJF) has met with more than 550 Morgan Keegan advisors and employees as part of its efforts to retain them, the St. Petersburg, Fla.-based firm said late Friday. In addition, the company said Tuesday it has raised nearly $360 million for the Morgan Keegan deal through its recent public offering.

“After answering many of their questions, I truly believe the Morgan Keegan professionals have been reassured of Raymond James commitment to client service and to an advisor-focused culture,” said Chet Helck (left), CEO of Raymond James’ private-client group, in a statement.

“The introduction of our ‘families’ has been most productive and well received,” Helck added. “I am very impressed with their engagement and enthusiasm, and look forward to a smooth and successful integration of our two firms.”  

The $930 million Morgan Keegan acquisition, which was announced in January, is expected to close in April.

“These meetings have been very productive and have helped demonstrate to our advisors just how similar in terms of culture and values Raymond James is to Morgan Keegan,” said Bill Geary, co-head of PCG for Morgan Keegan, in a press release. “We’re confident that this is the kind of environment where our financial advisors and in turn, their clients can be very satisfied.”  

Some recruiters, though, say that while there are some strong synergies between the two firms, it’s too early to know if Raymond James can retain the bulk of Morgan Keegan’s 1,000 financial advisors.

“Initially all the comments I’ve heard indicate that there’s a lot of due diligence going on,” said Houston-based recruiter Rick Peterson in an interview with AdvisorOne. “The jury is still out, and every one of them has other offers elsewhere.”

The larger producers are the ones “to keep our eyes on,” notes Peterson. Some of them are being offered retention packages roughly as high as 100% of trailing-12-month fees and commissions at Raymond James, he says.

“Other firms are offering the top reps 140% at a minimum and, in some cases, 150%. It could be as high as 180% at UBS,” the recruiter noted. “They’ll be leaving a lot of money on the table if they stay at Raymond James.”

Still, Peterson expects that many of the Morgan Keegan branch managers and advisors to stay on after the merger is wrapped up. “Raymond James should retain more Morgan Keegan reps than we first thought, though they still could lose a significant number,” noted Peterson.

Advisors and branch managers could be concerned about the presence of both Raymond James and Morgan Keegan offices in the same cities. “Why will they keep two offices open?” the recruiter asked. “You have to look at all these things that will come into play–which should take about six months.”

Nonetheless, “There’s a certain amount of respect that Raymond James is getting that a lot of us discarded at the beginning” of the acquisition,” Peterson concluded.

Comments from some advisors visiting the St. Petersburg offices of their new parent firm seem to underscore this point. 

“After a very anxious past six months, it will be such a relief to get this behind us and to be with a firm that shares our values…,” said Jim Burnett, a Morgan Keegan rep in Memphis, Tenn., in a statement. “It really felt like home to me.”  

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