By Ashley Lau
Jan 24 Raymond James Financial Inc Chief
Executive Officer Paul Reilly expects more advisers to join the
firm once it finishes the integration of its Morgan Keegan
brokerage unit next month.
And come February, Morgan Keegan advisers will also say
goodbye to their four-decade-old firm's name.
"To me, that's a testament to how well the integration is
going. They're comfortable giving up a great name, and a proud
name, and going to one brand," Reilly said in an interview on
A year after Raymond James agreed to buy the Memphis-based
brokerage from Regions Financial Corp for $1.2 billion,
the company is in the final stretch of integrating the roughly
869 brokers who stayed on.
"We'll actually see a significant increase in recruiting to
the legacy Morgan Keegan branches after the conversion," Reilly
Joining a firm right before a conversion would require
advisers to transfer client accounts twice - once for the move
to the new firm and another for the conversion to the new
brokerage platform. But by next month, all remaining Morgan
Keegan brokers will have their client accounts fully transferred
over to Raymond James and operate under the company brand.
Reilly said many potential recruits are waiting until the
conversion is complete, which could result in an uptick of
advisers joining later this year.
"On the recruiting side, it's probably going to be helpful
for them, given that they're a bigger firm now," said
Boston-based Aite Group senior researcher Alois Pirker.
Raymond James will be "a notch more attractive to
break-aways because of the additional scale that they have,"
Pirker said, referring to the movement of advisers to Raymond
James from other large brokerage firms.
Raymond James said late on Wednesday in its fiscal first
quarter report that its U.S. ranks shrank by 25 advisers during
the quarter to a total of 5,427 at the end of December,
attributing the departures primarily to the attrition of
lower-producing Morgan Keegan advisers.
Retention remained "extremely high" for Morgan Keegan
advisers offered compensation to stay. These advisers are high
producers who generate more annual revenue, the company said.
Including the UK, Canada and custody businesses, the firm
had 6,289 advisers and representatives at the end of December.
KEEPING BROKERS ON BOARD
The melding of advisers from Raymond James and Morgan Keegan
brings together two cultures, each with a distinct regional
flair. It was a gamble for St. Petersburg, Florida-based Raymond
James, given the possibility of adviser defections during the
But Raymond James has been largely successful in retaining
top producers, industry recruiters and analysts say. The company
says roughly 95 percent of advisers with retention packages have
chosen to stay on.
The final check will be the post-integration period after
all Morgan Keegan advisers are moved onto the new platform.
"The proof is still in the migration," said Pirker, who
expects the bulk of Morgan Keegan advisers to view the
conversion to the Raymond James platform as positive.
Raymond James originally committed to letting advisers keep
the name for two years after the acquisition, but Reilly said
Morgan Keegan management asked that the change be made by next
"We were actually pleasantly surprised," Reilly added.