Raymond James wins breakaway brokers that are 'pragmatists'

Brooke’s Note: This article doesn’t involve a single RIA as far as I know. But I believe that good information about what is happening on the front lines of wirehouse breakaways is good intelligence for those concerned with registered investment advisors. Derek Bruton who heads LPL’s national sales effort recently told me that seven of the 10 largest breakaways that came to LPL from full-service brokers in 2009 let it be known that the ability to do both fee-based and transactional business played heavily in their decision. Furthermore, of those seven advisory firms, five of them subsequently moved substantial assets into LPL’s RIA custody unit. Raymond James also has a healthy hybrid RIA offering and I suspect that many of these breakaways bore that in mind.

The quantity of wirehouse brokers joining Raymond James Financial has slowed from last year’s gusher but the quality of new breakaways is high.

The St. Petersburg, Fla.-based broker-dealer disclosed details Friday about 10 financial advisors that it attracted to the company both as full service employees and independent contractors during the first quarter of its 2010 fiscal year – which runs Oct. 1 – Dec. 31, 2009 — and also into January.

Many of these people advise significant assets and they came from a broad spectrum of broker-dealers including: Morgan Stanley Smith Barney, Merrill Lynch, Wells Fargo Advisors, and Essex National Securities.

Flow of talent

Though the recruiting market has slowed, this steady flow of talent from a broad base of employers is significant, according to Chet Helck, chief operating officer of Raymond James and head of the firm’s Private Client Group.

“Recruiting for both traditional employees and independent contractors has certainly slowed from the record levels of early 2009,” he says. “But we are still attracting top-tier advisors who recognize that Raymond James is a stable firm, where they can put their clients’ interests first, own their own book of business.”

Unlike wirehouses, Raymond James allows its brokers to build equity in their practices by making it explicit that their clients are theirs.

The recent recruiting experiences of Raymond James are a good proxy for the market, according to Howard Diamond, managing director of Diamond Consultants in Chester, N.J., an executive search firm for financial service professionals.

During the financial crisis, a certain group of advisors rushed to other firms (including IBDs, non-wirehouse brokers and independent RIAs) because they wanted to replace wealth lost in the downturn. Others didn’t like the bank that acquired their broker. For example, Merrill Lynch brokers balked at Bank of America ownership, he adds.

Kicked into gear

“But there’s still a whole population of brokers who got kicked into gear by last year’s event and are just taking action now,” Diamond says. “There are still many advisors who didn’t move last year and who are a more pragmatic type who are still carefully exploring their options. That being said, the firms are still actively and aggressively recruiting the larger producing advisors with clean compliance records, good business mix, etc. So, while recruiting is down from last year, it is still strong and thriving.”

Advisors joining Raymond James’ Private Client Group include:

1.) Ron Richardson and J. Dale Thurman who came from Morgan Stanley Smith Barney of Oklahoma City where they managed over $86 million in client assets.

2.) Alex Opoulos and Nick Holmes joined the Raymond James office in Charleston, SC from Merrill Lynch where they had revenue of $1.1 million and managed over $200 million in client assets.

3.) Brothers Tom and Steve Biermann joined the firm’s St. Louis branch from Wells Fargo Advisors where they had revenue in excess of $770,000 and managed more than $100 million in client assets. Tom began his career with A.G. Edwards more than 23 years ago and was joined by Steve in 2006.

Advisors joining Raymond James as independent contractors include:

1.) Henry and Lloyd Graham, [brothers] who came from Morgan Stanley Smith Barney in Houston, Texas, and have client assets of more than $300 million.

2.) Billy Peterson, who has opened an office in Ogden, Utah, after spending ten years with Morgan Stanley Smith Barney where he managed $200 million in client assets.

3.) Jodi Vleck a $1 million-plus producer with 11 years experience moved from Essex National Securities in San Diego, Calif. where she managed client assets of $165 million.

Blockbuster haul

Still these recruiting successes are modest compared to Raymond James’ blockbuster haul for the fiscal year ended September 30, 2009 when it recruited over 750 experienced financial advisors with more than $35 billion in assets and over $250 million in historical gross revenue, according to the company. Those recruits included both advisors joining the firm as independent reps and full service brokers.