Raymond James headcount growth slows

Raymond James has been so good at attracting new advisors in recent years that the firm’s name has almost become synonymous with recruiting success. But during the fourth quarter of 2018? Not so much.

Headcount rose just a net two advisors from the prior period to 7,815 (it was up 278 from the year-ago period). This after the firm announced at the end of September that it hit a record 7,813 independent and employee advisors, a net increase of 467 from the year-ago period and 94 from June.

“Recruiting was down a little bit [this quarter] after last year’s record pace,” CEO Paul Reilly told analysts during an earnings call Thursday morning.

Fewer new hires and an uptick in broker retirements and deaths — 65 in total — dampened growth.

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Responding to analysts' questions, Reilly said that broker retention remains strong and recruiting efforts robust.

“We’re coming off an all-time record, so I’m not going to say we’re going to match it,” he said.

Reilly added the firm anticipates recruiting this year will be good, “even if it’s not the record of the previous year.”

The company does not report how many advisors it hires each quarter, just its total headcount. The firm currently fields 3,166 employee and 4,649 independent advisors.

There were bright spots for Raymond James’s wealth management unit. The firm notched records for net revenue ($1.36 billion) and pre-tax income ($164 million), up 10% and 6% year-over-year, respectively.

On Wednesday, the St. Petersburg, Florida-based company inked a deal to acquire Silver Lane Advisors, a New York-based investment bank specializing in RIA M&A transactions. Terms of the deal were not disclosed.

Like other firms, market volatility during the fourth quarter impacted Raymond James. Growth for assets under administration for the private client group was flat from the year-ago period and down 9% from the prior quarter, landing at $690.7 billion.

Earlier this month, Wells Fargo reported client assets for its retail brokerage unit fell

10% year-over-year to approximately $1.5 trillion. And client assets at Morgan Stanley’s wealth unit slipped 3% year-over-year to $2.3 trillion.

Reilly told analysts that the company can weather market volatility, should it worsen this quarter. Raymond James also been making investments — some in technology — that will position it well for future growth.

“We’ve also performed very well historically in a downturn. Our comp model is variable. And we have always found opportunities,” Reilly told analysts. “It’s more fun in up times, but we’re not afraid of managing in down times.”