Fresh off his fifth acquisition in five years, Peter Raimondi has big plans for his investment advisory firm.
Raimondi, head of Palm Beach Gardens-based Banyan Partners, is targeting the latest trend on Wall Street, one that finds investors moving their money from traditional stockbrokers to a new breed of investment advisers.
Banyan Partners this month announced its biggest deal yet, a merger with Silver Bridge Advisors of Boston. If the deal closes in August as planned, Banyan Partners will have $3.4 billion in assets under management.
That total is impressive enough, but Raimondi hopes to keep expanding across the country and to triple the size of his company.
“Our intention is to be a $10 billion firm in the next three years,” Raimondi said.
Not bad for a firm that Raimondi started with just two employees on the verge of a market crash. An attorney with decades of wealth management experience, Raimondi launched Banyan Partners in 2008 from a small office on PGA Boulevard. He did his first deal in late 2008, buying a Boca Raton investment adviser just months before the stock market hit bottom.
Banyan Partners targets wealthy investors with portfolios of at least $1 million. Clients pay no commissions. Instead, they’re charged a management fee that averages 1 percent of the amount in their accounts, so an investor with $1 million would pay $10,000 a year for investment advice.
That’s a typical arrangement for investment advisers, who argue that their business model represents a better value for investors than the standard stockbrokerage model, which collects a commission each time an investor trades a stock, bond or mutual fund.
The knock on traditional stockbrokers has been that they’re motivated to do transactions that generate commissions, but that approach is falling out of favor. Traditional brokerages such as Merrill Lynch and Morgan Stanley have seen their market share drop to 42 percent from 49 percent in recent years, according to research firm Cerulli Associates.
“There has definitely been a move toward boutique investment firms, where there’s more of an alignment of clients’ interests, and fewer conflicts of interest,” said Tom Manning, chief executive of Silver Bright Partners.
Other investment advisers see a similar trend. Michael Agnello, a financial adviser in West Palm Beach, said his business has been growing, too.
“The whole dynamic is shifting is toward more advice rather than a commission model,” Agnello said.
Raimondi said his firm aims to create an investment portfolio tailored to each client’s needs.
“It’s a totally custom approach,” Raimondi said. “We’re sitting here almost as craftspeople.”
Banyan Partners’ latest deal gives it offices in Boston and San Francisco, and Raimondi said he want’s to keep expanding. His biggest challenge is finding companies that will fit well with his firm. Raimondi said he has opened and then closed negotiations with a number of companies without a deal.
“Sometimes the best acquisition,” he said, “is the one you don’t make.”