NEW YORK ― Defections from Morgan Keegan are slowly hollowing out the $1.5 billion brokerage, which has recruited almost no experienced hires to fill the gaps left by advisers who have left since June.
Several advisers and teams, including 10 advisers that managed at least $694 million in assets combined, have departed since the late June anno
uncement that parent Regions Financial Corp.planned to sell Morgan Keegan. Recruiters say as the sale drags on, more experienced staff will leave, and that begins to chip away at the value of the firm, now heading into its sixth month on the market.
“There’s not a hard timeline, but there is a pragmatic timeline in that, let’s face it, they’re recruiting no new talent in there,” said financial services recruiter Ron Edde of Armstrong Financial Group.
A $1.5 million Morgan Keegan team in Huntsville, Ala., left in September, and Edde expects to move another team this week.
The average Morgan Keegan broker produces roughly $300,000, annually, recruiters say, so each adviser departure with production north of $1 million is a sizeable loss for the firm.
The latest big defection: A team of three Morgan Keegan advisers in Cincinnati, Ohio that last year produced $1.7 million in revenue, which would make it three teams of $1 million or more in revenue to leave the firm since June.
James Dornan, a veteran with two decades of experience that Morgan Keegan hired less than a year ago to build the firm’s Washington, D.C., presence, also left earlier this month for Janney Montgomery Scott, where he is now a regional manager.
“A lot of retail financial advisers that I talked to wanted to find out who the final parent company was” going to be, Dornan said. That slowed the recruiting process, he said.Morgan Keegan declined to comment on the departure of Dornan.
Morgan Keegan had 1,218 financial advisers as of the end of October, six more from mid-September, according Morgan Keegan spokeswoman Kathy Ridley, with the latest additions to the firm’s financial adviser base coming mainly from their training program.
Trainees differ from experienced recruits, who bring with them a book of business.