Raymond James Slings Mud at Big-Firm Rivals
(Adds comment from public relations advisor in 12th and 13th paragraphs.)
Talk about hanging a competitor out to dry.
In a statement released to the press on Monday, Raymond James permitted the head of a three-person team it just hired in Burlington, Vermont, to say the brokers couldn’t work in their clients’ best interests at Merrill Lynch, the firm where each had worked for more than 20 years.
“[W]hen changes occurred that prevented us from doing our best work for clients, we chose not to accept the status quo,” George Ewins, who joined his father in Merrill’s Burlington branch in 1995, two years after completing the firm’s trainee program, said in a prepared statement. “We made a positive change for our clients and, we realize now, that things are not ‘the same everywhere’ as we had been told. Raymond James is different and yes, better.”
Reached at their new office, members of the team declined to elaborate.
The RayJay-sanctioned comments, however, have an extra sting coming on the heels of Merrill’s decision to break ranks with most competitors on the Department of Labor’s new fiduciary rule by prohibiting brokers from offering commission-based retirement accounts.
“We’re committed to your best interest,” Merrill declared in an advertising campaign launched in early November. “Not the status quo.”
A Merrill spokeswoman declined to comment.
For Raymond James, which is allowing commission retirement accounts to continue and which has been aggressively recruiting from wirehouse competitors for its branch channel, the hard-knuckled approach is becoming something of a formula. A week ago it advertised recruitment of another trio to its Savannah, Georgia, branch with a statement from its team leader that aimed arrows at his former firm, Wells Fargo Advisors, and its embattled bank parent.
“We were looking for a work culture where the clients always come first,” said Benjamin E. Price in the prepared statement, “and where the client-advisor relationship was never going to be compromised – with required quotas or pressure to sell certain products.” Price’s team had managed about $200 million at Wells, according to RayJay.
A Raymond James spokeswoman did not respond to a request for comment on the brash style that it has been carving out in an attempt to convince brokers and customers that they can do better with the St. Petersburg, Florida-based “regional” than at Merrill, Wells, UBS Financial Services and Morgan Stanley Wealth Management, each of which is owned by a bank company.
The implied attack on Merrill’s fiduciary rule policy follows a more general attack against bank-owned firms that Raymond James began two years ago.
Some image experts questioned the strategy.
“I’m surprised that an organization with the great reputation that Raymond James has would allow a new employee to speak about a former employer like that in print,” said Melissa F. Daly, a former public relations staffer at Goldman Sachs who heads MFD Communications. “There’s a danger of this becoming the story instead of the announcement.”
In liberally publicizing its new recruits, some of whom have lower production or asset numbers than new hires that wirehouses occasionally promote, Raymond James also takes the risk of extra scrutiny.
The Vermont team, which at Merrill managed $440 million in client assets and generated $1.8 million in fees and commissions in the past year, includes Richard Kowalski and Theresa Swett, in addition to Ewins.
Ewins and Kowalski each have a pending customer complaint seeking $225,000 in damages for allegedly making unsuitable recommendations and misrepresentations from December 2010 to April 2014, according to the Financial Industry Regulatory Authority’s BrokerCheck database.
Kowalski began his career at E.F. Hutton in 1987 and joined Merrill Lynch in 1989, according to BrokerCheck. Ewins started at Merrill in 1994, and Swett started her career at Merrill in 1993, according to the database.
— Jed Horowitz contributed to this story.