E-Trade acquires Texas advisory in its push south

FWR Staff

8 June 2006

Discounter now owns High-end businesses in the North, South, East and West. E-Trade Financial plans to acquire Retirement Advisors of America , a Dallas-based advisory that works exclusively with retired airline pilots and crewmembers. RAA is meant to strengthen E-Trade's "wealth-management network" made up of Los Angeles- and New York-based Howard Capital Management, Boston-based Kobren Insight Management and Harrisdirect, a Chicago-based advisory group.

"With the acquisition of RAA, E-Trade enhances its advisory service for customers in Texas - a state with a high concentration of our retail and Corporate Services customers," says Jon Foster, head of New York-based E-Trade's wealth-management unit. |image1|

Grounded

Overall the move is meant to strengthen E-Trade's "regional advisor strategy, which delivers localized wealth management services and advice to retail and Corporate Services clients with a minimum of $250,000 in assets," E-trade says in press statement that matches, nearly word for word, what it said just after publicizing its intention to buy Kobren last summer.

The financial terms of the deal between E-Trade and RAA weren't disclosed, but a statement says that RAA will keep its name and "operate in a manner consistent with past practices of the former company, retaining its senior management team, all of its personnel, and its complete offering of investment and retirement services." E-Trade says the deal should be completed before the summer is out.

To reach a broader swathe of mass-affluent-and-up clients in Texas, however, the plan seems to call for dropping RAA's pilots-only focus.

Still, RAA's CEO Scott Frost figures the merger with E-Trade will help RAA's existing clients. "RAA was attracted to E-Trade Financial's history of innovation, its client-centered culture, as well as commitment to providing multiple channels for wealth advisory services," he says.

RAA manages more than $1 billion in assets across something like 1,300 client relationships. -FWR