Raymond James’ announcement Thursday that it is acquiring the U.S. private wealth business of troubled Deutsche Bank confirmed industry speculation. But it did a lot more than that, according the firm and industry experts: It gives the firm an additional channel to offer to recruits, one focused on high-net-worth investors who want to work with a boutique.
“This is a very clever strategy,” said Mark Elzweig, an executive search consultant, in an interview. “If Raymond James is successful in retaining the bulk of the 200 Deutsche Bank advisors, they can really position themselves to compete for advisors who want to work at small high-end boutiques.”
The unit – which will be branded Alex. Brown — has a total of about $50 billion of client assets and $300 million of revenue. This means its advisors have an average level of production (or fees & commissions) of $1.5 million — putting it way ahead of Merrill Lynch, for instance, whose reps average $1 million in production.
“The timing is perfect,” Elzweig said. “They are doing this as the number of high-end boutiques in the world is shrinking, as many foreign banks are exiting the business.”
Raymond James (RJF), which has about 2,500 employee and 3,500 affiliated independent advisors, confirmed the deal means it is adding the boutique option to the “Advisor Choice” list of offerings that it shares with potential recruits at wirehouses and other broker-dealers.
“For wirehouse and other advisors who can come into that division, this in essence opens up another channel in their already successful recruiting campaign,” Elzweig stated. “And Raymond James has been phenomenally successful this year at attracting many top advisor teams.”