Raymond James hikes minimums for new RIAS

The investment advisory division of Raymond James Financial Services Inc. has raised the minimum level of assets under management for new clients to $50 million, from $30 million.
NOV 30, 2009
The investment advisory division of Raymond James Financial Services Inc. has raised the minimum level of assets under management for new clients to $50 million, from $30 million. The change began at the start of the firm's fiscal year Oct. 1 and was driven both by the lower profitability of serving low-asset advisers and the hope that some registered investment advisers who use Raymond James as a secondary custodian will move more assets to meet the minimum. Although current clients are grandfathered from the new minimum, those with assets under $25 million are being assessed an annual maintenance fee. “We are dedicated to providing RIAs superior service and a resource-rich platform, neither of which are inexpensive,” Mike Di Girolamo, a senior vice president who heads the custodial unit, said in a prepared statement. “We know several advisers maintain more than one custodial affiliation, so by encouraging those below the minimum to increase their asset levels, we hope Raymond James becomes their primary custodian.” Mr. Di Girolamo said in an interview that about 100 adviser firms keep their clients' assets with the broker. About a dozen of those have assets under $25 million. Raymond James in late summer signed on RWE Private Wealth in Tavares, Fla., a newly formed RIA with about $6 million of client assets. Tom Ruggie, one of RWE's principals, runs another RIA called Ruggie Wealth Management that keeps most of its $210 million of client assets with LPL Financial. He said he has not been moving assets from his larger business out of LPL. Mr. Ruggie initially planned to use The Charles Schwab Corp. for his new firm, which focuses on liability attorneys and family offices, but he said he picked Raymond James because his partners have long relationships with the firm and because its location in St. Petersburg, Fla., is appealing to many of his potential clients. “It's beneficial to take them to the Raymond James facility,” he said, noting that some of his new clients recently met its chief economist. Mr. Di Girolamo said Raymond James has been referring some advisers who don't make the $50 million cut to join RIAs in its custody network and has helped to place some with firms in Chicago, New York, Denver and Salt Lake City. And in a token gesture of support for new business, Raymond James has revived a promotion that waives commissions and other transaction charges on any new end-client account of $250,000 or higher for 30 days or three months, whichever comes first. The promotion, which also absorbs up to $100 of transfer fees on new accounts valued at $500,000 and higher, began Oct. 15 and runs through mid-April. The custody divisions of Schwab and Fidelity Investments this year introduced promotions of as long as one year for new end-client accounts, with significantly higher fee waivers on transactions and transfers, as well as discounts on portfolio management products. E-mail Jed Horowitz at [email protected].

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