Securities America, other B-Ds may be seeking suitors, but Averitt says acquisition 'makes no sense' for Raymond James Financial Services
With a number of independent broker-dealers on the block, it's a buyers' market for those firms looking to expand their business through acquisition.
But don't count Raymond James Financial Services Inc. among them.
In interviews this week at the firm's annual conference for its 3,400 independent financial advisers, company officers made it clear they are more interested in expanding the firm organically than by acquisition.
Dick Averitt, chairman and chief executive of Raymond James Financial Services, would not comment on specific companies currently for sale, including Amerprise Financial Inc.-owned Securities America Inc. But he said many of the brokers and advisers working at such firms are low producers and would require extra oversight in terms of compliance.
“It makes no sense [for us],” he said.
Chet Helck, president and chief operating officer of holding company Raymond James Financial, would not rule out an acquisition, but he said a potential target would have to be a good strategic fit and be compatible with Raymond James' culture.
“We're not a serial acquirer,” he said, noting that the firm has made only a few small acquisitions in the last 20 years. (One of them was a Canadian firm it bought so it could legally expand into that country.) “Acquisitions are expensive, risky and they change everything,” he said.
“My opinion is that firms become acquirers when they can no longer successfully grow organically,” he said.
Thanks to a low turnover — less than 1% of its top-producing brokers leave in any given year — Mr. Helck and Mr. Averitt said Raymond James has been able to hire the brokers it loses through normal attrition. Mr. Averitt said two-third of its hires come from member firms and one-third from other independent broker-dealers.
Firm officials said there are 52 brokers affiliated with other firms attending this week's conference in Las Vegas. Raymond James invites potential recruits to the conference so they can “kick the tires” and meet informally with the firm's other independent financial advisers.
