New Directions for Rival BDs

Several employee-advisor firms have reached significant milestones recently. Raymond James, for instance, completed an important wealth-management acquisition, while Wells Fargo Advisors tapped a new chief.

With over 6,500 advisors, Raymond James wrapped up its purchase of Deutsche Bank’s U.S. Private Client Services Unit in September. The company says that Alex. Brown’s 190-plus advisors have joined it and are now on the firm’s technology platform.

The group of former Deutsche Bank reps serves high-net-worth and ultra-high-net-worth investors in 16 branches, concentrated in the Northeast and West. “This combination continues our focus on strategic additions to augment consistent organic growth while also complementing our core private-wealth business in geographic areas targeted for expansion,” said Raymond James CEO Paul Reilly in a statement.

Alex. Brown is led by Haig Ariyan, who earlier was co-head of Deutsche Bank Wealth Management Americas. Ariyan joined the firm in 1996 as an advisor at Alex. Brown, which was acquired by Deutsche Bank three years later. (Alex. Brown was founded in 1800 as the first U.S. investment bank.)

The New York-based executive reports to Raymond James COO Dennis Zank and also works closely with Raymond James & Associates President Tash Elwyn, who leads the firm’s employee-advisor channel. “Tash and I are committed to keeping both businesses separate but aligned,” said Ariyan in an interview.

“There is much value in keeping the Alex. Brown brand alive as a unique null, while recognizing that Raymond James serves high-net-worth clients through its advisor business, as well. We are embracing a collaborative approach with the ultimate objective being to build a more successful and larger Raymond James,” he explained.

When the deal was announced nine months ago, recruiters said it was a good move for the broker-dealer. “This is a very clever strategy,” explained Mark Elzweig, an executive search consultant, in an interview at the time. “If Raymond James is successful in retaining the bulk of the 200 Deutsche Bank advisors, it can really position itself to compete for advisors who want to work at a small, high-end boutique.”

The unit had about $50 billion of client assets and $300 million of revenue as of late 2015, which means its advisors have an average level of production (or fees and commissions) of roughly $1.5 million — putting it way ahead of Merrill Lynch, for instance, whose reps have an average of about $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, with many foreign banks exiting the business.”

In December, Raymond James expected to pay 1.4 times revenue for the acquisition, or $420 million. About 70% of this, or nearly $300 million, was to be spent on seven-year retention agreements; assuming these packages have been offered to roughly 200 advisors, that represented an average of about $1.5 million per advisor for the retention deals.

The two firms now work jointly on recruiting, diversity, technology and other issues: “We’ve been getting calls from those who lead the effort to support women and minority advisors and network with them. It’s […] more organized than what we have been able to do historically, so we are very excited about what this can do for us both commercially and culturally,” Ariyan said. (Raymond James will host its 22nd annual Women’s Symposium for advisors in October in Orlando, Florida.)

This news comes just after Raymond James said its advisors have full use of its mobile technology platform. Advisor Mobile platform works on iPhones and iPads, and it gives FAs access to client contact and account information on the go, including recent trades, as well as production and asset statistics.

The broker-dealer gave some advisors access to the new technology at its independent-advisor conference in April, but the full rollout of the program happened in July.

New Chief for Wells Fargo

David Kowach is the new head of Wells Fargo Advisors. The announcement came about one month after the prior head of the advisor group, Mary Mack, was tapped to lead Wells Fargo’s retail (or community) bank group. Mack had spent nearly three years at the helm of WFA, which has about $1.5 trillion in client assets and some 15,000 financial advisors.

Kowach, who has been in the financial services industry for 25 years, now reports to David Carroll, head of Wells Fargo’s Wealth and Investment Management unit.

Starting in 2012, Kowach worked as head of WFA’s Private Client Group, which includes nearly 11,000 registered reps. Earlier, he led WFA’s Business Development Group and was responsible for recruitment, retention, growth strategies and national sales.

Wells Fargo recently recruited two advisors from JPMorgan, who have managed a total of over $700 million in assets. The Anderson Remchuck Wealth Management Group is now part of WFA in Tulsa, Oklahoma.