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Raymond James adds 400 advisors, with half from big M&A deal

ByTobias Salinger
April 28, 2022 6:40 PM

The Raymond James Private Client Group reeled in records in its headcount of financial advisors, fee-based advisory assets and revenue in the first quarter.

An acquisition of a major wealth manager from abroad buoyed the unit’s results, which otherwise would have been trimmed by the impact of recent equity volatility, according to the St. Petersburg, Florida-based firm’s April 27 quarterly earnings statement. Regardless, Raymond James added more than a net 400 advisors year over year in the first quarter while picking up teams with $340 million of trailing 12-month production and $53 billion in client assets, CEO Paul Reilly noted in prepared remarks on a call with analysts.

“Our recruiting pipelines remain strong and combined with solid retention,” Reilly said, according to a transcript by Seeking Alpha. “I am optimistic we will continue delivering industry-leading growth as advisors are attracted to our client-focus values and leading technology platform.”

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To see the key takeaways for financial advisors and other wealth management professionals from the firm’s first-quarter earnings, scroll down our slideshow. For coverage of the prior quarter’s earnings at Raymond James, click here.

Financial advisor headcount

The number of financial advisors with Raymond James jumped by 403 registered representatives, or 5% year over year, to 8,730 in the first quarter. Independent contractors rose by 177 reps, or 4%, to 5,129, while employee advisors climbed by 226, or 7%, to 3,601. The figures include 200 new brokers joining the firm in the U.K. under its January acquisition of London-based wealth manager Charles Stanley for $387 million.

Client assets

Assets under administration surged by 17% year over year to $1.2 trillion in the first quarter. Client holdings in fee-based advisory accounts jumped by 19% to $678 billion. Raymond James also reached a new high in client cash sweep balances, which increased by 22% to $76.5 billion and reflected moves by some advisors and their customers into cash amid the recent volatility in stock values. Net new asset growth came out to 11% over the past year and 9% annualized for the quarter due to the firm’s “continued focus on supporting, retaining and attracting high-quality financial advisors,” Reilly said in a statement.

Expenses

Rising assets and business brought higher expenses for the firm. Financial advisor compensation soared by 18% from the year-ago period to $1.23 billion, and non-interest expenses grew by 17% to $1.71 billion. 

Bottom line

Raymond James generated pretax income of $213 million on net revenue of $1.92 billion. The profit expanded by 11% and the revenue enlarged by 17%. The elevated business stemmed from higher assets and fee-based accounts, according to the firm. The numbers included a little more than two months of results for Charles Stanley after the Jan. 21 close.

Remark

An analyst asked Reilly how the firm views its potential market in the U.K. after acquiring the British wealth manager. Although Reilly described it as “very fragmented,” he said the deal put Raymond James in the top 10 among wealth managers in the country or close to it, according to the transcript by Seeking Alpha. The firm might pursue other deals after completing the “yearlong project” of integrating Charles Stanley into its fold, he said. “We think there’s a lot of opportunity,” Reilly said. “Charles Stanley really has high-quality people [and a] high-quality back office, but they’ve been slower on growth, mainly because they’ve been more capital constrained."
Tobias Salinger
Chief Correspondent, Financial Planning
Industry News Earnings Raymond James Financial
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