Raymond James raiding case brings multimillion-dollar award

Raymond James and three of its wealth managers have to pay their industry rival Baird more than $5 million over their alleged “raiding” of a star advisory practice more than two years ago.

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A Financial Industry Regulatory Authority arbitration panel on Monday ordered Raymond James and the three leaders of The Wise Investor Group of Raymond James to pay $5.25 million in compensatory and punitive damages after Baird alleged that a recruiting “raid” on its branch office in Reston, Virginia, had rendered it unable to “fairly compete for the clients it had been serving.” Raymond James pulled over the Wise Investor Group, led by managing directors Greg Smith, Simon Hamilton and Chris Aime, in September 2022. 

At the time of its move, the then-14-member team had been managing about $2.8 billion and producing more than $20 million in annual revenue at Baird. 

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As is common in FINRA arbitration decisions, the panel that handed down Monday’s ruling didn’t go into its reasons. The award against Raymond James consists of roughly $4.2 million in compensatory damages for alleged violations of FINRA’s fair practice rules and tortious interference in contracts and business expectations, as well $350,000 in punitive damages. Smith separately has to pay $282,564, Hamilton $248,104 and Aime $158,511, all for alleged breaches of contract.

Baird meanwhile was required to pay $500,000 for alleged violations of the broker protocol, an industry-spanning pact governing what sorts of client information advisors may take with them when they go from one firm to another. In a counterclaim, Wise Investor Group accused Baird of engaging in “a vicious, multi-pronged, ongoing campaign to damage and defame WIG and its members.”

Neither Baird nor Raymond James responded to requests for comment. The Wise Investor Group also did not return a phone call seeking comment.

The case shows the legal risks firms can run when recruiting advisory teams from rivals. Rob Herskovits, the founder of New York-based law firm Herskovits, said accusations of unfair raiding can arise when a firm takes actions perceived to harm a competitor’s fundamental business interests. 

“Other times, they’ll just poach such a significant business unit from another firm that it’s viewed as unfair competition,” Herskovitz said.

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Wise Investor Group now has 17 members, according to its website. Smith, Hamilton and Aime all joined Baird in 2007 after working at Ferris, Baker Watts, a now defunct firm with a lengthy list of regulatory disclosures. Smith has 25 years of industry experience, Hamilton 33 years and Aime 29 years.

On a video on Wise Investor Group’s website, Hamilton said the group chose to move Raymond James after spending 15 years at their previous firm and wanting to see what other options were out there. 

“Raymond James gives us the complete freedom to simply provide objective advice and do what’s best for you,” he says. “We can have meaningful conversations about your wealth and goals that you want to have — not what a financial institution tells us you need to have.”

Wise Advisor Group is also well known in its region for a popular radio show and now produces a weekly podcast. A blog post by the recruiting firm Diamond Consultants, which helped move Wise Advisor Group to Raymond James, said the team wanted to find a firm that would allow it to continue its media productions.

At Baird, the team also felt they “reached a point where they were outgrowing the firm and could no longer serve their ultra- and high net worth clients to the best of their abilities,” according to the post. “Simon and Greg indicated that the technology and infrastructure were outdated and, ultimately, they were not getting enough value for what they were charged.”