As new reports emerge that Raymond James Financial could be in the lead to acquire Regions Financial’s Morgan Keegan brokerage, Morgan Keegan’s financial force is really wondering what is in it for them, recruiters say.
A deal with Raymond James for about $930 million in cash for Morgan Keegan could be disclosed as soon as this afternoon, Bloomberg reported today. That comes after Stifel Financial Corp. submitted an offer for Morgan Keegan for about $875 million in cash and stock on Jan. 8, the Bloomberg report also said.
Regions Financial declined to comment for this article. Neither Raymond James nor Morgan Keegan responded to inquiries for comment by press time.
The latest reports come after months of waiting for Morgan Keegan’s brokerage force totaling about 1,200 financial advisors. Regions Financial first announced it was putting Morgan Keegan up for sale in June. That announcement was followed by months of negotiations, which at one time also included potential private equity buyers.
That has led to some speculation as to how long Morgan Keegan can retain its financial advisors. While some point to a low attrition rate so far, others point to the assets that have left the firm to date.
“It’s ben a long time to feel like a man without a country,” said Mindy Diamond, president and chief executive of Chester, N.J.-based recruiting firm Diamond Consultants. While Morgan Keegan leadership has done a good job of keeping its force calm, those advisors are “definitely impatient,” she said.
“I think at this point in their minds Raymond James would probably feel the same to them as Stifel,” Diamond said. “At this point, they’re just incredibly ridiculously uber anxious to have an answer.”
A possible acquisition deal for Morgan Keegan will hold the key to the looming unanswered question that the firm’s financial advisors have, which is if there will be retention packages, Diamond said. Other unanswered questions include what will happen to redundancies in support staff and office locations.
Rich Schwarzkopf, president of New York-based recruiting firm Schwarzkopf Recruiting Services, said he is talking to at least a dozen Morgan Keegan financial advisors who are exploring opportunities outside of the firm.
“They all say the same thing. ‘We want to see what the deal is,’” Schwarzkopf said. “They couldn’t care less what the firm gets, but what’s in it for the brokers?”
An acquisition deal for Morgan Keegan should provide some incentive for the financial advisors to stay, Schwarzkopf said. But from looking at past deals in recent years, he said, there is no guarantee that will happen.
“If the past is any indication of the future in these deals, whoever does take them over will make promises and make promises and make promises, and drag it out as long as possible before making a retention offer,” Schwarzkopf said.
Lorie Konish writes for On Wall Street.