Raymond James reorganizes to 'unify' leadership

Seven years after acquiring Alex. Brown, Raymond James is absorbing the subsidiary more fully into the rest of its business.

Raymond James, a giant of wealth management with $194.4 billion in assets under management, said last week that it was reshuffling its executive ranks to ensure "further leadership alignment" and "a more unified approach" across Alex. Brown and Raymond James & Associates (RJA), the firm's employee advisor channel.

"Providing advisors and their clients with a strong leadership team focused on furthering the combined efforts of Raymond James & Associates and Alex. Brown is a key component of our growth strategy," Tash Elwyn, the firm's CEO, said in a press release. "Doing so will help identify efficiencies, bolster continued growth, optimize advisor support and add support for expanding strategic markets."

As part of this reorganization, RayJay announced several personnel changes. At the end of the year, Senior Vice President Pat Allison will be retiring as director of RJA's Western division, which covers nine states. Replacing him will be Bert White, who is currently directing the firm's Florida region.

"I'm so honored and excited," White told Financial Planning. "Pat Allison, who's going to be retiring, is a legend at this firm … So I'm humbled to try to continue his fantastic legacy."

Tim Killgoar, head of the Financial Institutions Division (FID) at Raymond James Financial Services, will replace White at the helm of the Florida region. Steve Kruchten, senior vice president of National Relationship Management, will succeed Killgoar at FID. All these changes will take effect on Oct. 1, the firm said.

The reorganization marks a new chapter not only for Raymond James, but for Alex. Brown. 

Founded in Baltimore in 1800, Alex. Brown & Sons was the first investment bank in the United States. In 1997 it merged with Bankers Trust, and in 1999 the combined firm was acquired by Deutsche Bank. Then, in 2016, Raymond James purchased the Alex. Brown unit of Deutsche Bank for about $420 million.

Since the acquisition, Alex. Brown has continued to operate with a certain degree of independence. But according to an internal Raymond James memo reviewed by AdvisorHub, the new restructuring will put RJA managers in charge of both Raymond James and Alex. Brown brokers, starting in October. About 24 different branches that until now had both Raymond James and Alex. Brown managers will now report only to RayJay.

"It's going to look and feel a lot more like the core Raymond James unit," said Jason Diamond, a vice president of financial advisor recruiting firm Diamond Consultants. "When they say things like 'leadership alignment,' it's pretty clear that the leaders they're aligning to are the Raymond James leadership structure."

Read more: Raymond James closes another record quarter for wealth revenue

White, however, said life at the firm would stay largely the same.

"I don't know that there's going to be a lot of change," he said. "The Alex. Brown name is going to remain in place. We'll still be able to recruit into Alex. Brown … This is for further alignments and to increase efficiencies, because this is all about having the best organizational structure to give a great client experience."

White also said Alex. Brown has an important role to play in reaching RayJay's goals for the next few years. According to its latest earnings report, Raymond James' Private Client Group currently has $1.17 trillion in assets under administration. But by 2030, it hopes to raise that number beyond $2 trillion.

"If you filter that down, that's by attracting, enabling and digitally empowering financial advisors across multiple affiliate channels," White said. "And we know that we're in a stronger position to achieve that through the further alignment of Raymond James and Alex. Brown."

To Diamond, the reorganization signals something simpler: the end of a "honeymoon" phase and the settling in of reality.

"Any time one firm acquires another, there's always that sort of honeymoon period, where they leave the legacy brands and systems and cultures in place," he said. "And then over time, it only makes sense that the firm is going to want to fold them in more and more into the parent company."