Welcome to Financial Advisor IQ

RBC Wealth Management Ramps Up Indie and Captive Offerings for Big Expansion Goal

By Thomas Coyle October 23, 2017

Coming off a bumper year for advisor recruitment, RBC Wealth Management has staffed up on the executive side to extend its run and boost services to both its employees and a small but growing cadre of independents.

In recent weeks Minneapolis-based RBC WM, the U.S. brokerage arm of the Royal Canadian Bank, hired Michael Parker from HighTower to head recruiting efforts in its employee-advisor unit, and Nate Angelo from Columbia River Advisors to lead the firm’s internal, FA-centric consulting efforts.

“RBC is committed to making investments in both people and technology” in the name of end-client service, says Ann Senne, head of RBC WM’s advice and solutions group.

Parker, who worked at LPL Financial and Smith Barney (now part of Morgan Stanley) before joining upstart brokerage HighTower in 2010, says there’s “no real daylight between this success in recruiting and why I joined RBC.”

A spokeswoman for RBC WM says the firm won’t “disclose the number of recruits” it has gleaned in its parent company’s present fiscal year, which ends this month. But she confirms it’s already “the best recruiting year for the firm in eight years.”

In conducting his due diligence on RBC WM as a prospective employer, Parker says it struck him how the place “felt like a boutique culture backed by a large and well-capitalized financial institution.”

Indeed, Toronto-based RBC is the biggest bank in Canada — where all banks tend to be big — and the fifteenth largest worldwide, according to Forbes.

And Parker agrees with Senne that the parent company isn’t afraid to spend in support of its U.S. advisors. “We’ve got a leadership team that isn’t afraid to invest to grow the business, in infrastructure and human capital — and the advisors here can feel it at their fingertips,” he says.

For example, Parker says RBC WM – the result of Toronto-based RBC’s 2000 acquisition of Midwest broker-dealer Dain Rauscher – boasts a state-of-the-art advisor platform.

This combination of a culture “where everybody knows your name” and the operational sophistication needed “to serve their clients' complex needs” is making RBC WM a “destination of choice,” according to Parker.

Advice-industry consultant Andrew Tasnady says RBC WM has emerged along with a handful of other so-called regional brokerages — like St. Petersburg, Fla.-based Raymond James and St. Louis-based Stifel — to achieve status as “super-regionals” in the last few decades. These firms “pretty much cover the whole country,” and have investment platforms that offer “most of the products the wirehouses do.”

For wirehouse producers, a super-regional like RBC WM can be an attractive employer because they’ll take teams with less than $500 million under management — often a lot less — and they offer slightly better bonuses (to the extent bonuses are on offer at all at wirehouses).

Super-regionals can also help veteran wirehouse FAs with lifestyle transitions. “Some advisors want to move to a smaller town or eliminate a long commute,” says Tasnady. “If they aren’t tapping into a lot of stock issuance, a regional can make a lot of sense."

RBC WM has another thing in common with several other prominent regionals: internal support for independent advisors — an endeavor it’s eager to expand.

Brett Thorne

Brett Thorne is head of RBC Correspondent Services – a clearing firm for broker-dealers – and RBC Advisor Services – a custodian to about 65 RIAs, many of them asset managers.

The unit he runs “isn’t as mature on the RIA side,” says Thorne.

To get more traction among wealth management RIAs, adds Minneapolis-based Thorne, RBC WM is targeting “smaller firms and breakaways.”

To lure them in, the firm has a new “modular” technology platform that forms an “ecosystem of independent tech firms that we’ve put together to offer a seamless experience.” The platform features stalwarts of the indie arena such as CRM-software maker Redtail Technology, financial planning software maker MoneyGuidePro and trade order manager Vestmark.

In joining with firms like Raymond James, Ameriprise and Wells Fargo that straddle the divide between independent and so-called captive advice providers, RBC WM hopes to attract some FAs who, though headed for jobs in the full-service brokerage, may have an eye to independence down the road.

“Teams come over with that idea,” says Thorne. And though they don’t always act on it, having an in-house independent unit functions as a sort of safety valve.

“It’s nice to know they have that as an alternative — if they ever want to do it without a wholesale disruption for their clients.”