upbeat about it for several reasons.
“The continuity that we’re providing and the setting up of a Midwestservice and operations center that willlargely be staffed by Waddell & Reedemployees, as well as explicitly keepingconnectivity to the Ivy Fund portfoliomanagers through Macquarie, and thenhaving a [client transition] event thatreally is going to be largely freeof repapering for clients [via anegative consent process], it’scompelling offering for advisors,” he explained.
In other words, “When youput that all together, we arebullish that we’ll do well,” theLPL executive added. “I can’tprognosticate, and there arecompetitors out there that areengaged [with the W&D reps].So we’re working hard. We havea very organized approach, andwe’re educating these advisorsand hope to earn their business.”
UPDATES ON RAYMOND JAMES
In mid-December, Raymond Jamesstruck a deal to acquire Financo, a boutique investment bank that specializesin consumer- and retail-focused firms.That news closely followed its earlier announcement that it was planningto buy retirement plan administratorNWPS, which has $35 billion in planassets and 400,000 participants.
“With our strong capital position andthe growing demand for effective investment banking expertise among consumer and retail companies, this deal allowsus to strategically grow our capabilitieswith an industry-leading team that hasa similar culture and desire to delivermeaningful outcomes for clients,” saidRaymond James Financial Chairmanand CEO Paul Reilly.
The Financo transaction is expected
to close in the firm’s fiscal second quar-
ter, which ends March 31. Financo’s
specialties include beauty and personal
care, direct-to-consumer e-commerce,
enthusiast brands, healthy living and
active lifestyle companies, as well as
those in home furnishings.
“The integration of Financo’s morethan 25 experienced professionals withthe Raymond James complementaryconsumer and retail practice positionsthe firm as a global market-leader inconsumer and retail investment banking,” Raymond James said in a statement.
The deal is intended to help the firmtake advantage of the “significant shifts”taking place in the consumer and retailindustries, according to Jim Bunn, president of Raymond James Global Equities& Investment Banking.
Raymond James Investment Bankinghas raised nearly $280 billion in capital for corporate clients and completedabout 750 M&As since 2015. The firmalso works with 8,200 financial advisorsand total client assets of $923 billion.
The firm’s earlier deal, buying Seattle-based NWPS and Northwest PlanServices, includes some 160 employees.Terms of the deal were not disclosed,but Raymond James says it expects thetransaction to close by year-end.
“As basis points get squeezed out of
the investment management supply
chain, manufacturers and distributors
— of which Raymond James is both
— need to find new ways to grow and
diversify revenues,” said Tim Welsh,
head of the consultancy Nexus Strategy.
“Retirement plan servicing is a key com-
ponent in that marketplace, so this pro-
vides them with a new channel and
capability — a very strategic deal.”
Executive search consultant Mark
Elzweig said, “Access to expanded retire-
ment service capabilities is a big plus
for advisors. Many advisors feel
that they have more of a sense of
control with an in-house depart-
ment than with an external
relationship. If NWPS has any
proprietary competencies that’s
of course helpful, too.”
Since assets in retirement
accounts tend to be “sticky,”
Elzweig added, “this is a worth-
while area” for Raymond James
to invest and dedicate resources.
The addition of NWPS means
Raymond James can expand
retirement services offerings,
such as retirement plan admin-
istration, to its advisors and their cli-
ents, according to the firm, based in
St. Petersburg, Florida. “The timing is
opportune as the industry prepares for
new solutions created by this year’s
SECURE Act, such as pooled retirement
arrangements, and increases the invest-
able market for employer and employee
small business solutions,” it explained.
NWPS employees are set to stay in
Seattle under the leadership of President
and CEO Tim Wulfekuhle. The business
will operate as part of the Raymond James
Private Client Group and its Institutional
Fiduciary Solutions department.
“Beyond being a good strategic fit withour long-term growth strategy, one of thekey factors we weigh when consideringwhom to bring onto the Raymond Jamesteam is culture, and NWPS’s values profile is very similar to ours,” Chairman andCEO Paul Reilly said in a statement.
Janet Levaux is editor-in-chief of InvestmentAdvisor. She can be reached at jlevaux@alm.com.
“What we disclosed with
this transaction is that our
financial model and our
financial expectations are built
on 70% retention of assets. We
would expect to be hopeful that
we would outperform that.”
—Rick Steinmeier, LPL’s head of
business development
