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$5B firm drops Pershing for Raymond James as custodian

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Raymond James’ custody and clearing division has landed a $5 billion client, the company announced.

Capitol Securities Management, looking for a partner with more brokerage experience, will switch its clearing business away from Pershing starting next spring, according to Raymond James.

“We did not make this decision to change lightly,” Joseph Jianos, CEO of Capitol Securities, said in a statement. “But we needed a correspondent clearing partner who could help us not only maintain, but also assist in growing our financial advisor population by providing superior products and service levels.”

Pershing did not respond to a request for comment on the departure.

Despite the loss of Capitol Securities, Pershing’s overall business isn't likely to be affected. The company has more than $1.7 trillion in total assets, according to the company. Raymond James has $681 billion in total client assets, according to the firm.

Capitol Securities is comprised of close to 180 advisors operating in more than a dozen offices that range from New England to Florida. In the last decade, it has grown AUM from $1 billion to $5 billion, according to the company.

As a sizable, regional and privately-owned brokerage and advisory firm, Capitol Securities sits squarely in the middle of what has become a barbell industry, comprised mainly of large and small firms, says president Mark Hamby.

The Glen Allen, Virginia-based firm began the search for a new provider two years ago. In the end, it wasn’t just the clearing services that attracted the company to Raymond James.

“Some clearing firms do a good job of clearing but haven’t invested in the full retail brokerage piece,” says Hamby. “The full retail experience is where Raymond James grew up.” He adds that access to all of the company’s resources — from research to investment technology — were a crucial selling point, both in terms of servicing clients and attracting new advisors.

With a wide range of advisors focused in disparate clientele, Capitol stands to benefit from the array of resources that Raymond James has built for its own advisors, according to Hamby.

The long timetable for the switchover is a product of the painstaking work that goes into migrating advisors and their clients onto a new platform.

“There’s a lot of work to be done,” says Hamby. “Anyone who’s ever been through a conversion knows it’s not easy.”

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