$17B branch Concurrent picks PKS after leaving Raymond James

In one of the biggest recruiting moves of the year involving independent brokerages, Purshe Kaplan Sterling Investments picked up a giant branch that left Raymond James.

Tampa, Florida-based Concurrent Advisors — a hybrid registered investment advisory firm that announced its plan last year to move 145 financial advisors with $12.7 billion in client assets away from Raymond James Financial Services to another brokerage — officially chose PKS Investments on May 31, according to FINRA BrokerCheck disclosures. 

Some advisors usually exit a large branch on the rare occasions that they switch brokerage firms. Last year’s stock slump pushed down the assets under management to around $11.5 billion, and 76 Concurrent advisors managing $7 billion made the transition, CEO Nate Lenz said. The firm has another $10 billion in 401(k) assets under advisement, he noted.

“We’ve got our feet underneath us. We’ve got the scale to be able to get the most competitive pricing from the custodians and vendors,” Lenz said in an interview. “We’re in a really good position to get back on that growth trajectory that we were experiencing the past few years.”

Concurrent recruited at least 25 advisors with $3.4 billion in client assets in 2022 leading up to its exit announcement in September after receiving minority growth capital from Merchant Investment Management a year earlier. At the time the firm indicated it would leave Raymond James, Lenz said his team was speaking with several prospective brokerages. At the formal launch of Concurrent’s independent RIA in May, the firm added teams with $440 million in client assets toward its goal of $17 billion in client assets under advisement by the end of 2023.

Representatives for Raymond James, PKS Investments and Kingswood U.S. — a special purpose acquisition company that owns the parent firm of PKS Investments — didn’t immediately respond to requests for comment.

When Concurrent decided last year to leave Raymond James, a spokesman for the company confirmed the departure and pledged that, “Consistent with Raymond James’ values and commitments, we will support those advisors who want to transition with Concurrent as well as those who wish to remain directly affiliated as independent contractors with Raymond James.”

About 10% to 15% of Concurrent’s business comes from commissionable brokerage holdings that migrated to PKS Investments, according to Lenz. Out of the 69 advisors staying with Raymond James, many were junior licensed representatives or teams that had left other brokerages in recent years and would be likely to come back to Concurrent “once the dust has settled,” he said. 

After examining several independent brokerages and holding discussions with a 12-member advisory board of planners in its network, Concurrent chose PKS Investments because it also works with the same primary clearing and custody firm, Fidelity Clearing and Custody Solutions’ National Financial Services, and focuses only on the broker-dealer business of large RIAs.

“It’s a combination of the consistency of clearing and custody and the fact that PKS stays in their lane,” Lenz said. “We rely pretty heavily on feedback from our advisors. … The pervasive opinion was that it’s time for Concurrent to be Concurrent.”

Often, brokerages and their largest branches may engage in something of “a power struggle” over which of them has won the business and loyalty of the hundreds of advisors in the network, according to Robert Russo, the founder of Charlotte, North Carolina-based Independent Advisor Alliance. Russo’s branch uses LPL Financial as its brokerage servicing 250 advisors with $16.5 billion in client assets in the network. Adding the caveat that he’s not familiar with the details of Concurrent’s move, Russo said his firm includes language in its contracts with advisors stating that it will reimburse fees to them if it ever leaves LPL.

“I feel lucky to be at LPL and to be on the same page,” he said. “Maybe a high percentage of them will follow you, but maybe they won’t. We tell our advisors we will not change broker-dealers. Our mission is to help them execute their vision. If I move to another firm, I could totally blow up what they’re trying to accomplish.”

The portion of advisors and assets that leave can vary dramatically if a big independent branch changes brokerages. When Independent Financial Partners left LPL in 2019, a recruiting blitz by Russo’s firm, other branches and their brokerage firm drew hundreds of advisors away from the departing firm. When another Raymond James branch, Steward Partners, departed the brokerage last year, Raymond James CEO Paul Reilly said on the company’s earnings call that the firm’s custodian retained most of the client assets managed by Steward’s 188 advisors.

In contrast, Concurrent’s RIA is using Fidelity’s custodian and that of Charles Schwab without keeping any ties to Raymond James, its Form ADV filing with the Securities and Exchange Commission showed. Fidelity’s custodial arm is acting as the “primary” one for Concurrent getting the advisory AUM that left Raymond James, while the firm added Schwab to the mix to help onboard incoming large recruits and pending acquisitions, Lenz said. In coming months and years, the firm will explore adding additional custodial options such as BNY Mellon’s Pershing and Goldman Sachs, he noted.

With Concurrent successfully transferring about 60% to 70% of its retail AUM to its new RIA and outside brokerage, the teams that made the move were the same ones that received equity shares in the firm after Merchant’s investment two years ago, according to Lenz. After that influx, the branch was growing by around $1 billion each quarter — a pace Concurrent is aiming to reach again soon on its way to a target of $30 billion in client assets in three to five years. The last wave of teams left Raymond James on May 31, Lenz noted.

“A transition like this is definitely not for the faint of heart,” he said. “We’re out of the woods, so to speak.”

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