We recently caught up with Raymond James Investment Banking Senior Managing Director and Head of Business Development, Ken Grider, to gain insight on how integrating investment banking brings opportunities for advisors and their high-net-worth business owner clients.
Passion with purpose
Even before his career officially started, Ken was exposed to corporate finance while at Emory University, and later while earning his MBA at Wake Forest. It intrigued him how finance and the use of capital played an important role in almost every business decision.
Today, Ken and his team manage the investment bank’s relationships with legal and accounting firms; venture, mezzanine and lower market private equity funds; and Raymond James’ more than 8,700 financial advisors.
Investment Banking works with advisors across all channels (including RCS), helping them respond to the capital needs and/ or liquidity goals of their business owner clients and prospects.
“If you bring us in, we want it to look and feel like our services are being introduced by you to help your business owner relationships grow to their full potential or to monetize the businesses,” he said.
By partnering with Investment Banking, advisors can rely on the guidance of firm professionals to confidently answer the questions of their business owner clients, such as “What is my business worth?” or “Which options are available to grow, sell or take my company public?”
“That’s what we do – we partner with advisors to respond to business owners’ questions and needs,” Ken said.
Many advisors who are successful in attracting high-net-worth business owner clients often get their feet in the door by first working with these prospects on their businesses. “Adding value to the business first opens up the personal planning discussion,” Ken said. Some advisors, however, may fear they don’t have the depth of understanding required to maintain their expert status in these clients’ eyes when it comes to business planning.
“When you’re out of your ‘power alley’ and business owners start to ask questions beyond your realm of expertise, advisors can feel vulnerable. That’s why we’re a resource – to provide that expertise,” Ken said.
Education from all angles
The numbers show that partnering with Investment Banking and Private Wealth Services at Raymond James can differentiate an advisor’s practice and drive greater client value, practice revenue and AUM growth. To help facilitate those first discussions Ken and his team created the Institute for Business Owner Excellence (or IBex), so advisors can gain the knowledge to successfully engage with high-net-worth business owners. IBex’s components include an annual December conference, webinars, and small master class groups with a roundtable format that facilitate the sharing of best practices and successful experiences.
Tap into untapped potential
The time is right to step into a partnership with Investment Banking. Ken described the current environment as “the perfect storm,” with forces working to drive business valuations to near all-time highs, unprecedented transaction volume, market uncertainty, and the concern some owners have expressed about possibly “missing” the opportunity to sell when so many others are.
There is also the risk of taxes going up. This might cause business owners, even those with growing businesses, to consider whether waiting to sell means they’ll take home less in the future.
Needless to say, business owners are asking lots of questions these days, Ken said, and Investment Banking could be the right partner to help advisors answer them.
Which advisors interact the most with investment banking?
Are they the advisors with big books? One Raymond James channel versus another? New advisors seeking to carve out a business owner niche?
Nope.
“Advisors who have successfully introduced their business owner relationships to Investment Banking in the past tend to keep coming back with more introductions. They’re more comfortable because they have done it before and have seen the impact of our work, whether we’ve helped raise capital, sold a business or taken a company public,” Ken said.
One transaction can create tens of millions of dollars of AUM, plus advisors receive a referral fee.
“When you see the opportunity, don’t be afraid of it – go after it,” Ken said.
You have questions. Investment banking has answers.
How do I start the conversation?
Prep for client meetings by having a pre conversation with Investment Banking. Ask things like: Do we do these types of deals? What’s going on in my client’s industry? Have any big deals recently closed in their sector? What headwinds or tailwinds do you see?
What if I'm worried about being cut out of the process?
When an opportunity arises, the Investment Banking team makes it a point to be thoughtful and include advisors in the discussion. When a new opportunity is introduced to the investment bank, advisors first interview with the bankers and then create a game plan together for how best to move forward.
What is the immediate benefit?
Referral fees are just one benefit and are based on a percentage of Investment Banking’s fee. What’s more, advisors can be paid up to three times per transaction, over the course of multiple transactions. And don’t forget the assets advisors can then tap into on a personal wealth level.
When you’re out of your ‘power alley,’ and business owners start to introduce questions outside your realm of expertise, you risk vulnerability. That’s why we’re a resource.
- Ken Grider
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