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Portfolio > Asset Managers

How Raymond James Grabbed a $2.9B Merrill Team

By Janet Levaux

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Raymond James Financial (RJF) said Tuesday that it recruited its largest team ever in terms of client assets: the West Nyack, N.Y.-based Mahoney Group, who were with Bank of America-Merrill Lynch (BAC), which has managed and administered about $2.9 billion in client assets and had yearly fees and commissions of $7.7 million.

This news follows last week’s recruiting of a team in Guam that did business with Morgan Stanley; the Asia Pacific Group has some $1 billion in institutional and retails client assets and $3 million in annual production. In June, Raymond James added a Morgan Stanley team with roughly $2.4 billion in assets held by institutional and retail clients in South Florida.

While Raymond James says it intends to keep growing its employee-advisor headcount in the Northeast, its latest recruits say they are glad to now have the flexibility they need to grow their business.

“We moved for a variety of reasons – which really center around the value proposition we offer clients and that was increasingly difficult to deliver,” at Merrill Lynch, according to managing director Chris Mahoney, in an interview with ThinkAdvisor. Mahoney had been with Merrill since 1982.

What’s now different for the team – which also includes advisors Kevin Mahoney (Chris’ younger brother), Mark C. Marotta, Kristen Koluch and Phil Murphy?

“We have much more flexibility vs. what we had at Bank of America-Merrill Lynch. This manifests itself in many ways, such as having easy access to no-load mutual funds and other products from Fidelity, Vanguard and T. Rowe Price, for instance,” explained Chris Mahoney.

The advisor added, “This access is important to us, and [the lack of it] was a hindrance at BofA-Merrill … [I]t’s a competitive issue.”

More than half of the group’s client assets are held in defined benefit/defined contribution plans, and this business brings in roughly 25% of fees & commissions.

“What’s positive for us at Raymond James is that you can be a consultant and not have to worry about conflicts within a firm that has its own consultants and its own [product] offerings for defined contribution and benefit plans. For us, this is an attractive feature.”

The transition, so far, hasn’t been too difficult. The team, he says, just had to move across the street, and its new office is in the same office park as before.

How are clients reacting to the shift? “I don’t want to jinx it,” Chris said. “But so far, it’s been very favorably received.”

As for Raymond James’ take on the new team, “The firm is focused on growing our employee channel in the Northeast, and this team’s join reinforces that commitment,” said Tom Galvin, North Atlantic regional director for Raymond James & Associates, in a statement.

“Over the past year we’ve expanded many offices in the Northeast and established new offices in Midtown Manhattan, Hartford, Connecticut, Worcester, Mass., and now West Nyack. We expect to and are working on expanding our existing footprint over the coming months and years,” Galvin explained.

For its part, Merrill Lynch says the team had $2.1 billlion in client assets custodied with it before departing and that that about 90% of its advisors have moved their assets onto the fee-based Merrill Lynch One platform, representing a total of $480 billion of client assets. The company says the platform includes products offered by Vanguard, Fidelity and Blackrock, for instance, and was built ”to simplify reporting and create simpler, more efficient ways of doing business.”

The Mahoney Group’s remaining client assets, about $800 million, are custodied on various 401k platforms, according to Raymond James.

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