More rejiggering as RJ looks to gin up custody business

Just weeks after its much-trumpeted acquisition of Morgan Keegan & Co. Inc., Raymond James Financial Inc. continues to revamp its operations. The publicly traded company announced on Monday that William Van Law will be taking charge of its RIA custody operation. What's more, RJ is setting up the custody unit as a stand-alone division within the company. The unit had been part of the company's independent-broker-dealer arm, Raymond James Financial Services Inc. "We see expanding our RIA business as a strategic imperative," Chet Helck, chief executive of the global private client group, said in a statement. He added that Mr. Van Law has a "track record of results." Mr. Van Law, head of sales for the firm's independent channels, replaces Mike DiGirolamo as head of the investment advisers division. Mr. DiGirolamo will retain his title as a managing director and work with Mr. Van Law in building the RIA business. Mr. Van Law and the investment advisers division now answer directly to Mr. Helck. Employees working in the custody unit had worked for Dick Averitt, chief executive of RJFS, who is retiring in April. As has been previously reported, the top spot at RJFS will be filled by Scott Curtis, currently president of RJFS. The business development team formerly under Mr. Van Law is reporting to Mr. Curtis. The management shuffle is part of a plan to raise the profile of RJ's custody operation. The unit holds about $7 billion in custody for about 100 advisory firms. That is just 3% of Raymond James' total assets, and roughly 1% of what custody leader Schwab Advisor Services holds. The change "recognizes [custody as a] distinct business model," Mr. Van Law said. "This is a major focus for the firm." Mr. DiGirolamo said the change was not a demotion. "I have the same title, the same basic responsibility and the same pay, so I wouldn't call it a demotion," he said. "It's as much a positive as anything," Mr. DiGirolamo added, because the RIA unit will get more resources and have a higher profile because it is independent. "There's been a whole series of changes around the firm to better allocate resources to improve growth rates," Mr. DiGirolamo added. Firm officials have acknowledged that the RIA unit has not gotten the attention it deserves. "We're planning on making a significant investment in the future," Mr. Van Law said, adding that the unit will focus on improving technology and service offerings for independent advisory firms. He declined to discuss specific figures or growth targets, but "given trends in the industry, we have very significant opportunities out there." One of the first steps will be providing additional resources for a dedicated transition team to help breakaway RIAs work through the steps in setting up shop, similar to what the firm offers to independents on the broker-dealer side, Mr. Van Law said. Raymond James has quietly operated the custody unit in part as an accommodation to brokers at the firm who want to operate their own advisory firms. About half of the firm's RIAs have past connections to Raymond James, Mr. Van Law said.