Raymond James reorganizes custody unit amid changing marketplace

Raymond James is reorganizing its custody division and modifying its marketing strategy amid a year of big changes in the custodial marketplace.

The St. Petersburg, Florida-based firm will consolidate its two custody divisions into one unit, the RIA & Custody Services Division, which services broker-dealers and hybrid RIAs as well as standalone independent advisory firms, according to Greg Bruce, who will oversee the combined business entity.

Prior to the change, the broker-dealers and standalone RIA units operated separately and had unique service teams. Bruce was responsible for the independent advisory division before taking on his new role.

The reorganization comes as the custody landscape undergoes a number of transformations. New players such as Altruist have entered the market. And the old players are changing too. TD Ameritrade, one of the industry’s four largest custodians, is expected to merge with Charles Schwab on Oct. 6.

Several smaller custodians have said they see new opportunities in this evolving landscape.

Over the past 18 months, Raymond James’ custody business has expanded its reach from breakaway teams to existing RIAs looking for a new provider, Bruce says. Some of those prospects are attracted to a custodian with no DIY retail offering, he says.

Under its new structure, Raymond James will be able to service advisors more effectively, as they can utilize resources from both custody units that were already operating similarly, Bruce says.

Raymond James also plans to revamp its custodial marketing strategy. While the firm has relied on word-of-mouth referrals and recruiter relationships in the past, it is “looking to be more visible,” according to Bruce, who says the custodian would consider new marketing initiatives, such as sponsoring conferences.

At the end of last year, Raymond James had 35 broker-dealers and approximately 200 RIAs on its platform. Bruce declined to provide updated numbers, but said there were 37% more assets from standalone independent advisory firms than 18 months ago.

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Bruce would not comment on the leadership team, nor say whether there were ongoing changes to it, although he confirmed that Robb Combs, who was head of Raymond James’ broker-dealer and hybrid RIA custody unit, will remain at the firm in a leadership position.

At the end of 2019, Raymond James’ independent advisory division dropped commissions for stock, ETF and options trading.

When asked whether he would consider removing commissions charges for broker-dealers on the clearing platform, Bruce says that they will “continue to evaluate pricing at the end-client level, whether it's a broker dealer or an RIA,” but that “there's no imminent plans to change what's currently in place.”