July 27, 2012

Raymond James Loses a $200M Rep, but Keeps 90% of MK Advisors

One recruiter says he is quite ‘surprised’ at the retention level given the competitive compensation environment

Janney Montgomery Scott hired an ex-Morgan Keegan advisor with more than $200 million in client assets and several million in annual production, the firm said Tuesday.

While this is bad news for Raymond James Financial (RJF), which acquired Morgan Keegan in April, it shouldn’t detract from the strong advisor retention that RJ has achieved over the past few months, experts say.

“They’ve done a fabulous job with their rate of retention,” said recruiter Rick Peterson of Rick Peterson & Associates in the great Houston area, in an interview at AdvisorOne. “Frankly, it surprised me.”

According to results of the quarter ending June 30, which were released late Wednesday, Raymond James has kept more than 900 of the roughly 1,000 Morgan Keegan advisors and managers it could have potentially added through its acquisition. (The deal was announced in January and completed in April.)

“I knew the Morgan Keegan reps were all in discussion with somebody else … and could have signed on [to other firms] with better [compensation] packages elsewhere,” added Peterson. “It came down to the camaraderie and the uniqueness of the firm; they did a great selling job.”

As expected, Raymond James executives are upbeat about how their retention efforts have done, as well.

“While departures are driven by individual reasons, we are naturally disappointed when any advisor decides to leave the firm,” said Tash Elwyn (left), president of Raymond James & Associates Private Client Group, in a statement. “We recognize that competitors can be very aggressive with their offers, but we are nonetheless very proud of the overall retention rate of both our newly affiliated Raymond James | Morgan Keegan advisors as well as our existing advisors.”

As Elwyn points out, RJ is “continuing to recruit high-quality, experienced advisors to all of our channels. Since April, 10 advisors have been recruited thanks to the leadership of former Morgan Keegan managers, he adds.

On Wednesday, Raymond James said that Elisabeth D. Baldwin joined the firm in Gainesville, Ga., from BB&T Wealth Management, where her team managed more than $100 million in client assets. Previously, she was a financial advisor for Wachovia Securities.

On July 17, Raymond James said it had hired Tom Shoup, formerly of Morgan Stanley, to join its employee broker-dealer’s Atlanta operations. He has managed almost $300 million in client assets and had $1.3 million in yearly production.

Some 150 RJ|MK advisors and branch managers attended Raymond James & Associates’ July Summer Development Conference, along with about 450 RJA advisors and their families, according to Elwyn.

“The appeal of a firm such as Raymond James, with a client-first culture and conservative management, is not lost on those seeking an alternative to the Wall Street firms with their ongoing irritants,” concluded the RJ executive.

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