Raymond James expects its advisor headcount to continue to expand this year, generally through the hiring of individual advisors and teams, according to Dennis Zank, head of the firm’s employee-advisor group, Raymond James & Associates. But the traditionally conservative firm does not appear entirely against a merger or acquisition.
“You don’t have to be too astute to see the natural candidates,” the executive added. “I can’t comment on any such deal or speculation but have always respected Morgan Keegan and the quality of its advisors.”
Morgan Keegan, which has about 1,200 employee advisors, was put up for sale by its Birmingham, Ala.-based parent company Regions Financial on June 22. The company recently agreed to a $210 million settlement with investors regarding the sale of certain Helios funds. A separate dispute concerning the sale of some $2.2 billion of auction-rate securities was dismissed by a judge in Atlanta, though the SEC has said it is considering an appeal.
As for whether or not Raymond James is open to an M&A deal at this time, “We have grown the private-client group without a litany of acquisitions along way,” Zank said. Its private-client group now has about 5,100 advisors and $278 billion in assets.
Instead, Raymond James has traditionally expanded “the Seiler way,” he explained, referring to the recent hiring of Thomas and Patrick Seiler from Morgan Stanley Smith Barney. (The ex-MSSB high-net-worth team has about $500 million in assets and will be based in Newtown, Pa.)
“We do not have tremendous pressure to continue to grow in ways that force us into acquisitions,” added Zank.
Some experts, though, think Morgan Keegan–which operates with the employee model for its advisors–could be a good fit for Raymond James. “Raymond James is one of the top three suitors for Morgan Keegan,” said Houston-based recruiter Rick Peterson, in an interview.
The other top suitors, he says, are Wells Fargo and Stifel Nicolaus. “It’s clear that Wells Fargo is not against making further acquisitions, and Stifel Nicolaus, though very aggressive at times, has not had a modus operandi of buying other firms, and neither has Raymond James,” the recruiter explained.
For Raymond James, however, “Morgan Keegan fits them and their footprint,” Peterson said. “They need more of a Southeast presence, as they own Florida and Texas but not the area in between the two states as much as they could. Strategically, it makes a lot of sense.”