About three months after striking a deal to buy Deutsche Bank AG's U.S. private client business, Raymond James Financial Inc. said it has convinced most of the unit's financial advisers to join the St. Petersburg, Fla.-based brokerage firm.
The purchase is on track to be completed in September, with 200 Deutsche Bank advisers, or more than 90%, committed to coming onboard, Raymond James said in a
statement Wednesday. The unit will operate under the Alex. Brown & Sons brand and be led by the existing New York-based head, Haig Ariyan.
Raymond James' success is in contrast with the difficulties other firms have experienced recently in trying to bring onboard brokers from firms they have either purchased or gotten first crack at recruiting.
Stifel Financial Corp., for example, acquired the Barclays Plc U.S. wealth management group last year, but many of the brokers defected to other firms before the deal closed. And Wells Fargo had a recruiting agreement with Credit Suisse after it announced it was closing its U.S. private bank, but that didn't stop Credit Suisse brokers from signing on with other firms.
Dennis Zank, Raymond James' chief operating officer, said the company moved quickly to retain the Deutsche Bank brokers. Within about a week after the agreement was announced in December, 170 of the advisers joining Raymond James had visited the firm's headquarters in two large groups to meet with management and evaluate the business, Mr. Zank said.
"They've signed their contracts," he said, estimating that each adviser will add on average about $250 million of client assets. “They have high average production and average assets, and that was certainly appealing to us.”
As part of the deal, which should add at least $45 billion of total client assets, some of the Deutsche advisers were shown its fixed-income operations in Memphis, Tenn., and its equities desk in New York, according to Mr. Zank.
“They've done a great job wooing legacy Deutsche Bank advisers, but I don't think they should do a victory lap just yet because their biggest time of risk is between post-tax-season and when the deal closes,” said Danny Sarch, president of wealth management recruiting firm Leitner Sarch Consultants.
If the advisers were at all inclined to join a competing firm, they would be less likely to do so ahead of next month's deadline for filing tax returns with the Internal Revenue Service because it would be disruptive for their clients, according to Mr. Sarch.
While it's always possible that some advisers could leave, Mr. Zank said he's confident in the process Raymond James employed to retain the Deutsche Bank brokers.
The largest Deutsche Bank offices that will become Alex. Brown locations under the deal with Raymond James are in New York, Boston, Greenwich, Conn., and Los Angeles, according to the brokerage firm.
The deal will also benefit Raymond James' existing advisers.
The addition of Alex. Brown's high-net-worth clients will expand the brokerage firm's offering of alternative investments, Mr. Zank said.
