As LPL Financial prepared for two mega-moves into its banking channel this year, the firm lost a sizable and growing investment program to Raymond James.
FirstBank Investment Partners joined the Raymond James Financial Institutions Division with 22 advisors with $1.2 billion in client assets, the firms
It cost FirstBank “a substantial fee” to leave its contract with LPL after only three years, Tripp Thompson, the firm’s president, said in an interview. Raymond James has a corporate office with roughly 850 employees in Memphis and offers in-house research services that are “on another level” from its competitors, Thompson says.
“Their culture at Raymond James was dramatically different,” he says. “The producers that have the Raymond James platform are able to serve more clients and high-net-worth clients than other broker-dealers.”
Representatives for LPL declined to comment on FirstBank’s departure. The nation’s largest IBD expects to usher in a combined 285 registered representatives with $34 billion in client assets when the programs from
The consolidation in banking and increased regulatory burden in wealth management are causing more investment programs like those of BMO and M&T to close their broker-dealers, according to consultant Gavin Spitzner of Wealth Consulting Partners. There “used to be way more” than the roughly 30 banks who still have their own BDs, according to Spitzner.
Outsourcing with firms like LPL, Raymond James, Cetera Financial Group and Ameriprise that are allowing greater flexibility than in the past and have more bulked-up resources specifically aimed at wealth management clients has proven attractive to the bank programs, he says.
“Wealth management divisions of banks, they get in the back of a line when it comes to investments and attention and marketing,” Spitzner says. “Wealth management is, frankly, a very different business than retail banking.”
The third-party firms have pounced on the opportunity. LPL serves more than 700 institutions in the bank channel with $125 billion in wealth management client assets,
In August, FirstBank
The firm made two other smaller bank acquisitions last February and in April 2019, the annual report states. FirstBank serves mass affluent wealth management clients with at least $100,000 in investable assets and employer retirement plans at or above $1 million. Thompson affiliated with Raymond James on Jan. 21, according to FINRA BrokerCheck.
He had affiliated with LPL in 2019, the year after he joined FirstBank following more than three decades building the wealth management practice of First Horizon Bank. Thompson “got laughed at by a lot of people” for trying to start a wealth management business out of a bank, but it eventually grew to $70 million in annual revenue and 150 advisors, he says.
“FirstBank is so committed to growing,” Thompson says. “I want our FirstBank Investment Partners to be growing at the same pace or faster than the bank.”
The firm released its fourth quarter
