Raymond James will buy Deutsche Bank's U.S. Private Client Services unit and operate the boutique under the Alex. Brown brand, both firms said.
The brokerage unit of Deutsche Asset & Wealth Management will use the name it originally used when it was founded in 1800, after Raymond James closes on the deal, according to spokespersons for the firms.
“There is deep affinity among many advisors for Alex. Brown’s history, which is well respected by the industry and investors alike,” said Raymond James CEO Paul C. Reilly. “We are proud to use this opportunity to bind our new colleagues under this historic name.”
As part of the deal, Haig Ariyan, co-head of wealth management in the Americas for Deutsche Asset & Wealth management, will join Raymond James as president of the Alex. Brown division. Other members of the Deutsche Bank unit will also join, Raymond James said.
Terms of the deal were not released. On Wall Street had reported on Raymond James' interest in Deutsche in a recent interview with Reilly. A research report written by Christian Bolu, an analyst at Credit Suisse, found the bill could run between $600 million to $900 million.
The fast-growing regional broker-dealer's agreement to purchase Deutsche's private client services unit comes on the heels of other recent high-profile acquisitions involving large European banks that are giving up their U.S. wealth management units. Wells Fargo is currently taking on Credit Suisse's business as Stifel closes a deal to purchase Barclays' wealth management unit this month.
Some recruiters said advisors across the industry should take news of yet another bank pulling out with a degree of caution.
“If you are an advisor who is with a Wall Street firm that is not a wealth management firm at its core, you have to question whether you are at the right place,” said Danny Sarch, president of Leitner Sarch Consultants.
Other recruiters were curious how many advisors would be retained as part of the deal, and noted both the positives and negatives for recruits who make the transition to Raymond James.
"[Raymond James] is a fabulous firm and makes a great home for the right advisor. Many of the [Deutsche Bank] advisors will feel lucky to become part of an organization that is all about culture and that truly values their employees," said Mindy Diamond, president of Diamond Consultants.
"Some [Deutsche Bank] folks, though, worry that the [Raymond James] name will not resonate with their [high-net-worth] clients," she adds. "And, so no matter how much courting [Raymond James] does and no matter how much retention money they are offered, a percentage of the advisors will go elsewhere."
The Raymond James purchase agreement frees Deutsche to focus on "strategic priorities," said Fabrizio Campelli, Deutsche Bank Global Head of Wealth Management. These include investing in Deutsche's U.S. Private Bank, "which has grown consistently over the last ten years by serving ultra-high-net-worth clients through bespoke lending, trust, custody, banking and investment advisory solutions,” Campelli said.
“We believe Raymond James is a strong, growth-oriented partner that will foster future growth for the PCS business and its clients.” said Jerry W. Miller, Head of Deutsche AWM in the Americas.
With reporting from Bloomberg.