Royal Bank of Canada announced today that it plans to buy a unit from J.P. Morgan Chase & Co. that provides custody and clearing services for registered investment advisors.
RBC said in a press release today that it signed a definitive agreement to acquire J.P. Morgan's Third Party Registered Investment Advisor Servicing Business.
Details of the transaction, expected to close in the second quarter of next year, were not disclosed. Mary Sedarat, a J.P. Morgan spokesman, said the RIA servicing business was one the bank inherited from Bear Stearns, which collapsed last year during the credit crisis and was acquired by J.P. Morgan. The RIA servicing business is a small part of J.P. Morgan's custody operations, which focus mainly on institutional clients, she added.
When the sale is complete, the advisory servicing unit will be renamed and become part of RBC Advisor Services, which is a unit of RBC Wealth Management's U.S. division. RBC Advisor Services specializes in providing custody and clearing services to high-performing third-party RIAs.
"Growing and enhancing RBC Advisor Services is a strategic priority for our firm, and this acquisition represents an important step in our quest to become the finest investment advisory and wealth management firm in the U.S.," said John Taft, head of RBC Wealth Management, U.S. Division. "Across our multiple business channels, we are focused on serving the high-net-worth segment of the marketplace and IAS shares that focus for RIAs."
"The acquisition of IAS will expand the breadth and depth of our offering to highly successful third party RIAs, and will enhance our competitive position in the high end of the RIA custody marketplace," said Mike Kavanagh, chief administrative officer and head, Independent Business Channels, RBC Wealth Management. "The employees and clients of IAS represent a terrific strategic and cultural fit with our firm."
"RBC has the global resources to provide our IAS employees and third-party RIAs with world-class tools and solutions," said Chris Nastopoulos, national sales manager at IAS. "Additionally, the strength and stability of RBC will continue to provide clients with comfort and security in addition to the high level of service that they expect and deserve. We're excited to continue growing our business as RBC Advisor Services."
The acquisition of IAS marks the latest step in RBC Wealth Management's ongoing expansion in the U.S. The firm has recruited more than 300 financial consultants this fiscal year, by far the most consultants the firm has ever recruited in a single year.