Morgan Keegan has lost seven financial advisors since December, FINRA filings show. They follow some 190 other advisors who fled over the past six months, after corporate parent Regions Financial Corp. put the broker/dealer up for sale in the wake of a $210 million settlement with regulators over allegations they mislead investors on the risks of auction rate securities. Morgan Keegan has lost some 16% of its advisory force since being put up for sale.
Raymond James announced plans to acquire the firm last month, and has focused on stopping the advisor exodus. That includes sending retention awards to advisors with at least $300,000 in annual production.
Most advisors had already made the decision to jump ship prior to the Raymond James announcement. In December, Charles Allain III left for LPL Financial in Lafayette, La. Terrence Puricelli also moved in December to Wells Fargo Advisors in Chesterfield, Mo.
Fort Lauderdale, Fla.-based Jeffrey Eglow left Morgan Keegan and joined Wells Fargo Advisors in January, while Mark Witthaus moved to Wunderlich Securities in St. Louis, Mo., also in January. Other Morgan Keegan advisors who left in January included Stacia Travis, now at Ameritas Investment Corp. in Cabot, Ark., and Atlanta-based Allison Guyer and Jennifer Borus, a team that moved to J.P. Morgan Securities. Puricelli and Witthaus declined to comment, while the others did not return calls or emails.
Ron Edde, senior executive recruiter and associate partner with Armstrong Financial Group, said most of these recent defections since the first of the year have been average or below-average producers. Most of the higher producers, he said, are sticking around to get access to their restricted cash accounts, which fully vest at the end of March. The restricted cash accounts were not part of the compensation grid for smaller producers.
Morgan Keegan advisors producing less than $200,000, however, have very little options if they decide to leave because there’s almost no demand for those reps, Edde said. “A prostitute will have a better chance of getting a job at the Vatican.”
Edde said the majority of Morgan Keegan advisors in his recruiting pipeline, about 75 to 80 percent, are looking to go to the independent channel, with many of them looking at Ameriprise Financial, Wells Fargo Advisors Financial Network, and Prospera Financial Services. Raymond James has said it will give Morgan Keegan advisors the opportunity to choose between its independent channel or employee channel.
Updated 2/21/12 – Since this story was published, we’ve found two more financial advisors that left Morgan Keegan in recent months. Howard Sparkman, with $115 million in assets, joined Wunderlich Securities’ Dallas office in December, and James Gould, with $35 million in assets, moved to Wunderlich in Memphis in February.