Raymond James' latest acquisition appears to be progressing more smoothly than recent similar deals by rival firms Stifel and Wells Fargo.
More than 90% of advisors at Deutsche Bank's U.S. Private Client Services unit have committed to join Raymond James once the acquisition deal closes later this year, the St. Petersburg, Fla.-based firm said last week.
While recruiters say that Raymond James' courting of Deutsche advisors is proving successful, they also caution that advisors can still move to another firm before the deal closes. A recruiter familiar with the details says it's like a marriage: In essence, both sides are engaged to be married, but the nuptials can still be called off if a better suitor comes along.
Dennis Zank, COO of Raymond James, says that the firm has performed extensive outreach to the roughly 200 advisors at Deutsche. It included home office visits and meetings with senior leadership in order to introduce the advisors to Raymond James and its capabilities. Zank says that the advisors have been actively performing their due diligence, peppering the firm with questions about its capabilities.
Raymond James also extended retention offers to the advisors, says Zank, who declined to specify how much the firm was offering. He says they developed a template for the retention bonuses, but gave Haig and his team some latitude "to affect situations as needed."
"Obviously we had to model this relative to what we were contemplating to the purchase price of this [acquisition deal]. We believe it to be very fair and competitive otherwise we wouldn't have the levels of commitments that we have received," he says.
KEEPING THE TEAM INTACT
Other recent deals have encountered problems. Stifel only retained about half of the 180 advisors of Barclay's U.S. wealth management unit, the firm said after closing its acquisition of the unit in December. In October, Wells Fargo signed a recruiting arrangement with Credit Suisse, but many advisors have reportedly balked at the terms of the deal, which included a 13-year contract. More than 70 Credit Suisse advisors opted to move to UBS, sparking a raiding suit in FINRA arbitration.
Since reaching a deal with Deutsche Bank in December, Raymond James has pursued a somewhat different approach than Stifel and Wells Fargo. The firm plans to operate the Deutsche unit and its 400 employees as a separate division of Raymond James under the name Alex. Brown, which was also the name of the U.S. wealth management firm Deutsche Bank acquired in 1999.
The advisors who stay on after the acquisition will also continue to work in the same offices with the same support staff, according to Raymond James. And Deutsche executive Haig Ariyan, who worked at Alex. Brown prior to Deutsche's purchase of the firm, will stay on as president of the new Raymond James unit.
In addition to flying all the Deutsche advisors to the firm's headquarters, Raymond James' executives and experts have also made branch office visits to answer questions in person, Zank says.
"A great deal of the success of this transaction is being driven by the fact that these advisors are coming to Raymond James' platform with their management team in place. And not just at the top of the house with Haig and his senior leaders, but with all their local leaders. They are all coming with the transaction. So if you think about it from an advisors' standpoint, not only do they keep their entire team intact, but they get a chance to revitalize the Alex. Brown brand," Zank says.
Some recruiters also note that it's less likely that advisors will make a move after that date because they would essentially be asking their clients to transition to a new platform twice, and that entails a lot of time consuming effort and paperwork.
For his part, Zank says that some advisors may choose to move to another firm before the deal closes.
"This is a free country and they can go where they want. But I would say that given the high amount of due diligence that people have done that many will come. I would be surprised if we have many departures between now and September because why would you go through the exercise of all that due diligence and sign the agreement only to depart?"
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