NEW YORK, Feb 28 (Reuters) - Brokerage firms often flaunt their success at recruiting million-dollar advisers, but Raymond James Financial Inc went further this week by giving some new hires a platform for panning their former bank-owned firms.
The St. Petersburg, Florida-based company has generally eschewed public disparagement of competitors, a spokeswoman said, but the anti-bank refrain among veteran brokers is so commonplace these days that it seems appropriate to acknowledge.
On Thursday, Raymond James issued a press release about a Tuscaloosa, Alabama, adviser who joined on Feb. 21 after 31 years at Merrill Lynch, which is owned by Bank of America Corp . He and a partner who came with him managed more than $162 million in client assets at Merrill and generated more than $1 million annually in fees and commissions, according to the release.
“Raymond James reminds me of the firm I started with years ago,” Thomas Dedrick said in the release. “It’s a firm with no outside influences or pressures. Many bank-owned broker/dealers are going in another direction ... which is counter to what is best for our clients and counter to what we do as professionals.”
A Bank of America spokeswoman confirmed that Dedrick and his partner, Pam Franklin, had left, but declined to comment further.
Dedrick, who with Franklin had about 600 clients at Merrill, said in an interview that many of the bank products and services they were encouraged to sell were not appropriate for their clients in a city that has no local Bank of America branch.
He also said service for advisers, such as help desks for resolving questions about retirement accounts, had waned since Bank of America bought Merrill Lynch in January 2009. “It was taking a good bit longer to get things done because they had shrunk a number of areas that we relied on,” he said.
On Wednesday, Raymond James announced the arrival of Ann Fleming and Thomas Turnbaugh, who spent a total of 52 years at Wells Fargo Advisors and its predecessors, to its Bartlett, Illinois, branch. They, too, brought in more than $1 million of revenue for the Wells Fargo & Co unit last year and managed almost $140 million for clients.
“While we sought the products and services of a sophisticated investment firm, we did not want it to be bank-owned, so we were delighted to discover that Raymond James owns a bank, not the other way around,” Fleming said in the release.
A spokeswoman for Wells Fargo Advisors did not return a call seeking comment.
Raymond James, which is gradually expanding from the southeastern United States to California, the Northwest and the Northeast and owns a small bank where it holds clients’ cash, is a relatively small brokerage.
But the company is aggressively recruiting veteran brokers close to retirement who seek a transitional compensation package and consistent service for their clients after they leave.
Tash Elwyn, president of Raymond James’ branch system, told analysts this month that the program enables the company to build client assets rapidly.
When BofA bought Merrill and Wells acquired the former Wachovia Corp in the aftermath of the financial crisis, many brokers feared they would be slowed by bureaucracy and a loss of autonomy.
Some still complain, and recruiters for nonbank firms still wave the cultural flag to lure brokers from Merrill and Wells Fargo. But five years later, most brokers at the banks have settled into situations where they are rewarded for collaborative selling and cross-marketing of services.
The branch brokerage sales forces of Merrill Lynch, at just under 14,000, and Wells Fargo Advisors, at about 11,000, overwhelm the approximately 2,400 at Raymond James & Associates, the Raymond James branch system.
Individual brokers at Raymond James, however, have a much more significant impact on the bottom line than do those who work at BofA, the second-largest U.S. bank company, and Wells, the fourth-largest.
The private client group of Raymond James contributed 63 percent of its parent’s revenue and 41 percent of profit in the year that ended in September.
Merrill Lynch’s global wealth and investment management group provided 18.6 percent of revenue and 19.6 percent of net income at BofA last year.
Wells Fargo’s wealth, brokerage and retirement group contributed 20.5 percent of its parent bank’s revenue and 7.8 percent of profit in 2013.
Anthea Penrose, public relations manager for Raymond James’ retail brokerage franchise, said the company was not deliberately attacking larger competitors but was accurately reflecting current attitudes.
“We have almost prohibited advisers from knocking the competition in the past,” she said, “but this talk about banks has been such a prevalent refrain lately that we’re OK letting them say that.”