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The Broker-Dealer as Custodian: Raymond James

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Once upon a time, you could draw a bright line between an independent broker-dealer rep and an RIA, between an IBD and an RIA custodian. These days, the line is dimmer. We know that the ranks of the “dually registered” advisor continue to grow, and Cerulli reported earlier this year that the channel’s assets under management grew 21% last year, topping the $1 trillion mark (and growing faster than the wirehouse and RIA channels). Many broker-dealers—LPL, Securities America, Commonwealth—have begun RIA custody units under their own aegis as both a defensive measure and an offensive strategy.

Then there’s Raymond James, which for 10 years has let its affiliated advisors run things their own way under a strategy called Advisor Choice. Under its corporate wings you can be an employee advisor, an independent contractor advisor and, yes, run your own RIA.

In February 2012, Bill Van Law was named to run RJ’s Investment Advisors Division. In a late September interview, one year since IAD relaunched its RIA business, Van Law spoke about the current state of the business and his plans to “aggressively grow” the IAD. During its annual meeting in early October, Van Law announced some major new initiatives for the division.

There are now 110 RIA firms with 300 advisors who have brought $10 billion to be custodied at IAD, Van Law reported. At the IAD conference in St. Petersburg, Florida, nearly 40 RIA prospects attended the meeting, up significantly from the eight who attended in 2013. In addition, Van Law said through “public relations and advertising and boots on the ground,” recruiting is going “very well,” evidenced by the $500 million in net new assets that have come to IAD since Van Law’s new program began in September 2013. “We’re rather aggressive about growing” the business, he said, and when Van Law publicly set the goal of “doubling the business” last year, he said it was not just “about growing the assets,” but also “increasing the quality and caliber of assets” and bringing in larger firms. He reported that at two events for IAD prospects this year, there were 40 advisors who attended, with “assets per advisor in the $150 million range; we expect that to continue.”

Going back to Raymond James’ strategy with the IAD unit, Van Law said he’s been “pleasantly surprised by existing RIAs’ interest” in custodying. “One of the biggest benefits we bring is being a strategic partner,” Van Law said, mentioning the many services IAD offers beyond plain-vanilla custody: trust, lending, wealth solutions, marketing and technology. “We open up our comprehensive platform” of products and technology for RIAs.

When it comes to choosing a CRM system or doing marketing, “what we’ve heard from existing firms is that they want some help,” Van Law asserted. Using the resources of Raymond James Bank and Raymond James Trust is appealing to prospective RIAs, Van Law said, especially since “banking and lending is an important need for high-net-worth clients.” To help RIA firms grow through acquisitions or mergers, Van Law said Raymond James “introduces clients to each other” through its five-member succession planning and acquisition team. “We’ll help fund those transactions to some degree” as well, he said, joking that “the only thing we won’t do is compliance.”

During the IAD conference, Van Law announced that Raymond James-affiliated RIAs will now have access to Hearsay Social’s social-media platform and a library of pre-approved content. They also can use their own content in conjunction with Hearsay Social’s compliance and archiving tool.


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