Raymond James said yesterday it plans to convert itself into a bank. And why not? All the cool kids are doing it.

According to the firm, it’s actually been planning to become a commercial bank for several years. In a statement released yesterday, Raymond James said the move would permit a higher proportion of corporate lending, which has historically been more profitable and bears less interest rate risk. “It’s important to note that this move isn’t in response to an immediate need or to follow in the footsteps of other firms—although it’s becoming obvious that the future of the industry is to be regulated by the Federal Reserve. While it’s possible things could move faster in the current environment, our original timeline for these changes was set for summer of 2009,” says Raymond James Bank Chairman and CFO Jeff Julien.

But at least one analyst says Raymond James is likely facing some pressure similar to that of Goldman Sachs and Morgan Stanley. “Consumers and investors are much more aware about whether or not deposits are insured. The investment banks are seeing that and are reacting by getting into retail deposits to ramp up their balance sheets,” says Alois Pirker, senior analyst at the Aite Group.

The shift from investment bank to commercial banks by Goldman, Morgan Stanley and now Raymond James gives the firms more stability since they will now have access to the Federal Reserve’s lending facilities. But in exchange for the government’s safety net, the firms will be more closely regulated. Commercial banking regulation involves federal agencies, including the Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency, and the Federal Reserve—in addition to oversight by the SEC and FINRA. “The difference now will be regulation. Before it was the SEC overseeing these firms, and comparatively, the SEC not as strict as bank regulators,” Pirker adds.

The converted banks will now be held to the same rules as commercial banks like Bank of America. Commercial bank holding companies are prohibited from entering into innovative lines of business without prior approval and from most direct investments in real estate, commodities and other commercial activities.

Luckily, the new bank converts have been allotted two years to meet the requirements.

If the Raymond James move is approved, Jefferies & Co. will now become the largest investment bank in the U.S. with $3.89 billion in market cap.