AdvisorHub is reporting on interesting remarks made recently by Raymond James Financial's incoming CEO, Hazem Shoukry. He warned advisors of the potential pitfalls of private equity acquisitions during Morgan Stanley's U.S. Financials conference. He cautioned that private equity ownership could lead to long-term disruptions for both advisors and their clients as these investors eventually seek to cash out.

Shoukry explained that private equity aims to maximize returns quickly, often leading to disruptive events within three to five years. He emphasized that advisors might find themselves searching for stability again, causing unnecessary changes for their clients.

According to AdvisorHub, his comments come in the wake of industry warnings for advisors to thoroughly vet potential buyers due to the aggressive nature of private equity acquisitions. Shoukry confidently stated that the private equity trend would ultimately highlight the value of Raymond James' stable, long-term platform for advisors and their clients.

Private equity firms are paying multiples far above public market valuations, putting pressure on them to find buyers willing to pay even higher prices. Shoukry acknowledged the uncertainty surrounding the private equity strategy's endgame, noting that even the industry may not fully understand it.

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