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Raymond James to allow employed advisers to leave and poach clients

Raymond James to allow employed advisers to leave and poach clients

Wealth giant Raymond James is to take on adviser employees, but will give them the freedom to leave the company and take their clients with them to a rival. 

The company calls this newly launched business model an “employee affiliation model”.

Raymond James has been in the UK for twenty years, and has assets under management of £13.6bn across 100 offices but is part of a wider US and Canadian operation which already allows advisers to join as employees and take clients away if they leave.

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Anthony Scott, business development at Raymond James, said about half of the firm’s US and Canadian advisers were employed and not restricted by a legal covenant. 

He said the “rate of attrition’”, that is the number of advisers who actually quit and take their clients with them in the US and Canada, was “remarkably low”. 

Raymond James had already called for a similar model in 2012, after winning a £6m legal battle against Towry, saying a US-style protocol between adviser firms would avoid time-wasting and expensive legal battles over client ownership when advisers change companies.

Towry had accused Raymond James of poaching clients when seven Edward Jones advisers joined Raymond James after their company was taken over by Towry.

Scott said the firm's UK operation was now “taking the lead” from the US by offering this method of adviser recruitment.

The other three methods open to advisers engaging with the firm are independent contracting, professional partner, or to use the investment management platform as an independent firm, with the former two models involving people running their own practices but being regulated through Raymond James. 

Advisers can move between the different options, so are free to move from the employed category to the network at any time. 

He said the attraction for many advisers of becoming employees was “they may be a bit reluctant to become business owners, people have family commitments to consider, they may have family pressures and a mortgage. 

"We absolutely want entrepreneurial people who want to build businesses to join us, we do not let just anyone join us. We do a lot of due diligence. We are a scale business and our priority is to build scale in the UK.” 

Raymond James will provide training in how to grow a business as part of the package for those who join, and also provides investment research and back office support.

It does not have a centralised investment proposition, with advisers free to do their own investment management.  

Scott said: “Every wealth manager joining us at Raymond James comes through the doors with their own vision of success for their clients, their teams and themselves, and our primary goal is to help them along the path to achieving those goals.

"That autonomy has always been a central part of our culture at Raymond James, which is why it’s so exciting to be able to offer it within the framework of a more traditional employment model.