The agreement is part of a wider M&A trend changing the North American wealth management industry.

(An earlier version of this item ran on this news service's sister publication, Family Wealth Report, late last week.)

Wealth management mergers and acquisitions have taken a new twist, with Raymond James Financial agreeing to buy an M&A specialist investment bank, Silver Lane Advisors. Separately, Raymond James Financial reported fourth-quarter and full-year results for 2018.

Silver Lane’s business focus is the financial services sector and the firm was founded in 2007.

The transaction is expected to close by April, subject to customary conditions and approvals. Financial terms were not disclosed.

“Integrating their deeply experienced professionals into our existing financial services practice further positions us to capitalise on the growing demand for asset and wealth management expertise, while offering clients a broader range of capabilities,” Jim Bunn, president of Raymond James global equities and investment banking, said. 

Silver Lane’s team will form and represent the asset and wealth management group within Raymond James’ financial services investment banking practice, comprising almost 50 investment bankers.

M&A activity in the North American wealth sector has been brisk, driven by a variety of forces. An expected $30 trillion shift of wealth from the aging Baby Boomer generation - creating a big demand for advice - and the sense that wealth management is a more lucrative business to be in than some more capital-intensive financial sectors, has made firms in the space an attractive target.

Results

The firm, which operates in North America and the UK, reported fourth-quarter net income of $164 million, rising by 6 per cent from a year earlier and rising by 25 per cent from the previous three months.

Revenues at $1.36 billion were a record, rising by 10 per cent on the year. The private client group’s assets under administration stood at $690 billion, unchanged from the level at the end of 2017. At the end of last year there were 7,815 advisors, rising by 278 over 12 months.

“Despite the challenging market environment, the private client group segment, asset management segment and Raymond James Bank generated record net revenues during the quarter,” chairman and CEO Paul Reilly said. “We acted opportunistically during the quarter to deploy capital through share repurchases, as well as the recently-announced niche acquisition of Silver Lane Advisors to complement and expand our investment banking business.”

At the private client group, revenue growth during the quarter was mostly driven by higher assets in fee-based accounts, and at the beginning of the quarter partially offset by the decline in brokerage revenues. As assets in fee-based accounts are billed primarily on balances at the beginning of the quarter, the 8 per cent sequential decline of assets in fee-based accounts during the quarter will negatively impact asset management fees in the fiscal second quarter, the firm added.