Broker hives off financial-planning affiliate as it scrambles to raise cash. Online brokerage E-Trade Financial has agreed to sell RAA Wealth Management to PHH Investments -- mainly, it says, in a bid "to improve capital and liquidity" in the face of losses it incurred last year the sub-prime mortgage market.

Dallas-based RAA provides financial-planning services to airline crewmembers and their families. PHH, which is based in nearby Plano, Texas, does essentially the same thing.

Non-core

E-Trade says it expects to bring in about $80 million on the sale of RAA "and unrelated definitive and other transactions under contract." The deal is likely to close by the end of April.

E-Trade declines to say how much it is getting for RAA alone.

RAA managed about $992 million at the time of its last ADV filing with the SEC. PHH manages about $970 million.

In December, as its stock plummeted and amid rumors that the firm faced bankruptcy, E-Trade came out with a plan cut costs by $360 million by streamlining "certain corporate functions to reduce expenses" and selling "assets with high market demand" that aren't part of its core business.

"We have taken swift action and are generating results to maximize the value of our assets," says E-Trade's acting CEO Jarrett Lilien. "Effective execution of our turnaround plan will be measured by our continued ability to monetize assets, reduce balance sheet risk, streamline expenses and re-invest in growth that strengthens the overall franchise and best meets the needs of our customers."

E-Trade's last CEO, Mitchell Caplan, stepped down in November.

New York-based E-Trade acquired RAA in 2006 and made it part of a "wealth-management network" along with Los Angeles- and New York-based Howard Capital Management, Boston-based Kobren Insight Management and Chicago-based Harrisdirect.

Harrisdirect was absorbed into E-Trade Securities, officially, yesterday. -FWR

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