There are times when the bullish move is to hold steady.
For Raymond James — which has sometimes been criticized for not following market trends — holding steady is paying off.
The St. Petersburg, Florida-based firm
Slow and steady has been key for Raymond James' outgoing CEO Paul Reilly, who's led the firm for 14 years.
The long-term strategy has worked, despite when Reilly recalled Raymond James being "criticized" for taking years to integrate an acquisition and more recently, refusing to load its main balance sheet with fixed-rate securities on the premise that rates would drop in 2023. They did not and subsequently several banks failed last March.
"We were keeping that long-term view, worrying about making money over the long term, not just maximizing short-term profits, and it really paid off," he said. "It wasn't that we were prophetic" but "if you stay nimble, flexible, over-capitalized, then we had the flexibility to do things other people didn't."
Even Reilly's exit as CEO, announced in March, has been prolonged to sometime before October 2025. He will be replaced by Raymond James' chief financial officer, Paul Shoukry, who's also been at the firm 14 years. Reilly and Shoukry sat down with Financial Planning during the Raymond James annual conference April 30.
"We have a really good foundation. I'm not taking over a turnaround situation. We have record results in the last three years. All of our businesses are well positioned for growth," Shoukry said. "So my first strategic investment initiative is really to not mess anything up."
That steady approach has helped the firm win some significant acquisitions.
In April, the firm snagged a
Just as the firm has succeeded in making acquisitions, it's also been hampered by independent advisors selling to private equity (PE) firms. There were 90 announced M&A transactions of RIAs in the first quarter, marking it the second most active quarterly start of the year, according to a report by Echelon Partners. Private equity was involved in nearly 69% of those transactions, amounting to more than $200 billion.
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"We understand it's [PE] extremely disruptive, but we're not going to change who we are. We're actually going to double down on who we are," Shoukry said. "While it's been disruptive because all the money flowing in from so many different private equity firms, long term, I think it actually reinforces the uniqueness and the value of our approach with the clients and advisors first."
It was also the advisor-first approach in which Reilly took some heat for when he tried to keep most of the advisors from a 2012 acquisition of Morgan Keegan, resulting in an unusually long time to finish the integration.
"In fact, we didn't integrate for two years. The analysts hated that," he said. But "we wanted to grow and try and keep everyone we can keep. And it was a difference in that long-term approach that really paid off."
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Shoukry said as incoming CEO, he does want to add more technologies, including artificial intelligence to the firm's advisor platform to help streamline workflows. The firm launched a virtual support tool for advisors called Paraplanning Services in February.
It has more than $800 million budgeted for technology investments, Shoukry said.
"Client preferences are changing constantly in terms of how they want to interact with a firm, the type of apps they're willing to use, etc.," he said. "So that's going to be a big opportunity for us" to "help advisors save as much time as they can with those types of administrative tasks, so they can spend more time developing relationships with their clients, developing new relationships with prospects."
