Raymond James (RJF) said Tuesday it had wrapped up the conversion of Morgan Keegan operations and clients into Raymond James’ technology systems, and the Morgan Keegan brand had been retired.
The St. Petersburg, Fla.-based broker-dealer says that over the 10-month integration, more than 500,000 client accounts were transferred from Morgan Keegan to Raymond James. To make this happen, conversion specialists were trained and deployed to about 100 branches.
“It’s been really exciting that throughout the integration and combining of our firms, we have kept a critical focus on retaining all financial advisors from Raymond James and Morgan Keegan with very high service levels and Private Client Group leadership, which planned, prepared and executed the conversion extremely well,” said Tash Elwyn (left), president of Raymond James & Associates-Private Client Group, the firm’s traditional employee channel, in an interview with AdvisorOne. “And at the same time, we’ve delivered many new IT applications to FAs that continue to enhance our competitive position within the industry.”
The broker-dealer field does not always get IT conversions “right.” In fact, the merger of Morgan Stanley and Smith Barney attracted a lot of negative press due to the perceived slow, complicated nature of the transition of Smith Barney reps to the Morgan Stanley platform.
Raymond James seems to have learned from the experience of other firms. In November 2011, it hired Vincent Campagnoli to become head of Private Client Group technology strategy and development. Before joining Raymond James, Campagnoli held senior-level positions at UBS Wealth Management-Americas (UBS), Morgan Stanley (UBS) and Prudential/Wachovia Securities (now part of Wells Fargo).
Most important, in each of these three prior roles, Raymond James says, Campagnoli worked closely with Bella Loykhter Allaire. Allaire was hired by Raymond James in June 2011 to become the firm’s executive vice president of technology and operations.
“Above and beyond, we built a team within the two firms of 100 conversion trainers who were Raymond James and Morgan Keegan associates and not outside consultants,” explained Elwyn. “They know systems and were trained in systems, and perhaps most important, they know the culture and they care.”
These 100 “conversion trainers” were put into the Morgan Keegan branches in mid-February, so the integration could take place over the three-day President's Day weekend. By Feb. 19, everything was branded Raymond James, according to the company.
Plans outlined during the first stages of the merger—which was first announced on Jan. 11, 2012—allowed for the Morgan Keegan brand to be preserved in certain business segments for up to two years. “But former Morgan Keegan executives asked for the brand to be retired sooner, embracing the Raymond James brand and signaling a sign of confidence in our collective future,” the company said in a press release.
St. Petersburg, Fla.-based Raymond James Financial completed its $1.2 billion cash purchase of Morgan Keegan on April 2 of last year. As part of the merger, Raymond James offered retention letters to about 600 of Morgan Keegan’s roughly 1,000 advisors; the seven-year deals went to those averaging $300,000 and up in yearly fees & commissions.
Raymond James says it has retained about 95% of the revenue associated with the Morgan Keegan financial advisors who were offered retention packages, as well as more than a dozen senior executives, including former Morgan Keegan CEO and current Raymond James President John Carson.
Raymond James’ advisor headcount in the United States was 5,427 as of Dec. 31, including both independent and employee reps. Morgan Keegan advisors—added in the quarter ending June 30—numbered 869 in the most-recent quarter, as the firm experienced attrition of lower-producing Morgan Keegan reps, it said in its latest earnings release.
While he can’t comment on the reasons individual reps have departed, “We are very, very excited that so many Morgan Keegan financial advisors have chosen to be part of the Private Client Group,” Elwyn said. “The percentages show that the Morgan Keegan FAs have voted overwhelmingly for what they see is a benefit for their clients and their business as a result of the two groups coming together.”
The head of PCG said that the conversion was indeed “a Herculean effort with infinite complexity” and that the firm is “proud of the work its IT, operations and other departments executed.”
As for what lies ahead, Raymond James “will focus on great work in training and development that can continue to help advisors meet client needs,” Elwyn said. “There’s lots of real excitement as Morgan Keegan reps get technology and other access to resources from Raymond James and vice versa for the Raymond James advisors, in terms of the depth of Morgan Keegan in fixed income as a complement to our existing strengths.”