Financial-services giant Raymond James Ltd. has boosted its wealth-management division after acquiring three investment adviser teams from RF Capital Group Inc. RCG-T that oversee more than $1-billion in client assets.
Raymond James announced Thursday it acquired three Winnipeg-based teams known as Martin Wealth Management, Miles Wealth Management Group and Ruban Stark Wealth Partners, just months after RF Capital – a $40-billion independent investment firm known as Richardson Wealth – announced it had sold the business to iA Financial Corporation Inc.
The departures – which include team leaders Ken Martin, Benji Miles, Jeremy Ruban and Trevor Stark as well as nearly a dozen associate advisers and support staff – could be a sign of uncertainty for Quebec-based iA Financial IAG-T, which had agreed to pay $20 a share, a 107-per-cent premium, for the group of 189 investment advisers.
This follows another six-person team departure, led by adviser Joseph Bakish, who left Richardson Wealth earlier this month to join Manulife Financial Corp.’s wealth business, taking about $350-million in client assets to the insurer.
Quebec’s iA Financial scoops up independent wealth manager RF Capital
Richardson Wealth chief executive officer Dave Kelly said he cannot comment on specific personnel moves. However, he said the iA deal, which has not closed yet, is “full steam ahead” and will increase the value the firm can provide to its advisers in areas such as technology, product innovation and operational scale.
“I’ve spent time with every one of our adviser teams since we announced the transaction, including hosting 200 advisers at our sold-out summit earlier this week, and have heard firsthand how excited they are about what the transaction will mean for their businesses and their clients,” he said in an e-mailed comment.
He also noted that the 98-per-cent shareholder voting support for the deal means advisers – who are also shareholders – voted “overwhelmingly” in support of the deal.
For Richardson Wealth shareholders, including Winnipeg’s prominent Richardson family, adviser retention will be critical before both companies can declare the acquisition a success.
Typically, acquirers pay retention bonuses to advisers to ensure they will remain after the deal is completed. They are typically set up as forgivable loans and can lock advisers into a contract for three to seven years.
The rampant consolidation among Canada’s wealth-management industry has left the door wide open for competitors to swoop in with attractive recruitment bonus offers, particularly for investment teams that cater to high-net-worth individuals.
Raymond James’s head of wealth management, Scott Hudson, declined to comment on whether he had to increase the typical financial incentives when acquiring the three teams, or on whether he is in discussions with any other Richardson Wealth teams.
Mr. Hudson – who also oversees the private client group at Raymond James – said that over the past year the company has recruited 20 new advisers to the firm, including Thursday’s group, who manage a total of about $2.8-billion in assets.
While recruitment bonuses are frequently used within the industry to lure top-notch talent from competitors, Mr. Hudson said the additional resources a firm can offer are becoming much more important to advisers. In particular, he said, they care about the amount a company can spend on technology upgrades and which products they use.
“For these three teams, they wanted a firm with independence and it was important to them to be free from all proprietary products,” Mr. Hudson added. “They obviously wanted a technology platform to build and grow their practices and be with a firm who has the scale to deliver on those things.”
While the company does have stability with its relationship with its U.S. parent, investment giant Raymond James Financial Ltd. – a US$1.6-trillion global asset manager – the Canadian operations are still reeling from the unexplained recent exit of CEO Jamie Coulter.
The company declined to comment last week on the reason for Mr. Coulter’s departure, only announcing in an internal memo that he will depart the company as of Sept. 30.
Former CEO and current non-executive chairman Paul Allison was appointed interim chief executive, effective immediately, as the company conducts a “thorough search” for Mr. Coulter’s successor.
In 2022, when Mr. Coulter stepped into his role as CEO, he announced Raymond James would hit $100-billion in assets by 2027. That goal was later increased to $125-billion by 2030.
Today, Raymond James manages about $95-billion in assets. Thursday’s deal marks the opening of its 12th corporate office in Canada, in addition to its 170 adviser office locations across the country.
Editor’s note: This article has been updated to correct the first name of Ken Martin.
