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For Sale: Boutique Financial Advisory Firm; Advisors and Their Clients Optional



It’s an exceptionally active time for the financial services world. No headline is fully dressed without the words “merger” or “acquisition” attached to some of what once were the most exclusive names on the street. As the scale, resilience, and stability of “boutique” firms – such as what was Barclays, Credit Suisse, and now Deutsche Bank – come into question, advisors that work there are living in a world that becomes more uncertain with each day. Then a wirehouse or large regional firm swoops in – seeming to save the day – adding another layer of uncertainty and the possibility of a stay-worthy retention deal or a “free pass” to move on to something better.

What does an advisor at one of these firms do to solidify his future? Will a new name on a business card bring a host of bigger and better opportunities and solve for all that was previously wrong with his professional world?

Take Deutsche Bank and the latest rumors around sale of the wealth management unit to Raymond James. It’s one that has some legs given RayJay’s acquisition of Morgan Keegan and publicity stemming from CEO Paul Reilly’s comments at the last analyst meeting characterizing the organization as being in “acquisition mode.”

As a Deutsche Bank advisor with high net worth clients, you may be wondering how the Raymond James name will resonate, which is a perfectly valid consideration. While Raymond James certainly has a robust platform and all the capabilities that the high net worth client needs, the name certainly has not been the go-to brand for the ultra-affluent.

So while Deutsche Bank advisors – along with their Credit Suisse and Barclays counterparts in similar positions – are questioning whether the cachet of the brand that their clients are accustomed to can be supported by a super-regional like Raymond James, a bigger issue for each advisor should circle around the “free pass” each has been given, allowing everyone to evaluate the waterfall of possibilities with fresh eyes and a sense of new beginning, whether or not a deal with any prospective acquirer coagulates. And, after doing one’s due diligence, the $64,000 question should be, “Would I still choose my own firm or any firm that acquires it?”

Truth be told, I think that as the landscape continues to evolve, it becomes clearer and clearer that boutique firms that lack scale are not the most stable choice for advisors. And we will continue to watch many of the super high-quality advisors that have long practiced in that space move on to scalable and more resilient models. Firms like Raymond James certainly fit the bill: a regional firm – with more than 4,000 advisors and a multi-channel association model – that has a strong belief that the advisor owns the client. In fact, they are the only firm on the street that writes into the contract of W2 employees that the employee owns his/her book.

Of course, it makes perfect sense to give your firm the opportunity to win you over, as a handsome retention package may be presented in return for your loyalty. The best advice I can offer is this: run parallel paths. Allow things to unfold at your own firm, evaluating any potential acquirer and the retention package being offered. At the same time, continue to explore the industry landscape for new models that have emerged and traditional firms that provide you with a better opportunity to build the business that will be best for you and your clients.

Ultimately, you have quite an opportunity before you—many will say it’s a once-in-a-lifetime opportunity. While your head may be spinning with uncertainty, take a deep breath; the only bad choice is one of letting opportunity pass you by. This is your chance to choose how and where you can live out your best business life. So, be fearless…explore and conquer.

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