Raymond James - Good vs. Bad

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Jan 2, 2009 11:10 am

While visiting with a number of FA's that are (or have recently) moved to the independent side it seems like a vast majority have picked Raymond James over most others.  I was hoping someone could give me reasons NOT to "follow all the sheep."

I have looked at a number of independents and found that it was like comparing Walmart to Target. 

Please help!

Jan 2, 2009 3:50 pm

If I were to guess, RJ gives the most support, which is why it is tempting to most. I would also venture to say that of all the independents, when you are at the bottom of the spectrum (i.e. 200k-300k) they take a bigger cut, (I clear about 73% because of advisory fee expenses to RJ) but when you get toward the top (1mm+) they offer the potential for near 100% payout with some incentive plans they've got in place.

Stuff like advisory fee payout gets much bigger when you've got 50mm+ in the platform.

Jan 6, 2009 9:23 am

I'll compare and contrast three major indie platforms:

LPL, RJ and Commonwealth.

First off, the 800lb gorilla... LPL.

LPL is an excellent platform... for those who know what they are doing. They provide very little in terms of administrative or "back office" support. That being said, they also offer access to a wide range of products and services and they are obviously the "largest" indy B/D out there. If you're really looking to build your business on your own without to much interference from your B/D, LPL is probably the way to go. Payout can reach the 95% range.

Raymond James provides much more support. They have a large back office staff ready to assist you in many ways. RJ also offers a wide range of products and services. RJ would be the way to go if you haven't been in the business for 10+ years or you simply don't want to have to deal with alot of administrative tasks. Excellent company with excellent track record.  Payout is usually between 75-95%, depending on services.

Commonwealth is on par with both LPL and RJ in term of compensation. They also have a fair amount of back office support, but not comparable to RJ. They are also the smallest B/D of the three. However, what they lack in size or support, they more than make up for with class, style and dignity. I have never seen a more professional group of hard working, honest people than I have seen at the home office for Commonwealth. I'm also fairly confident that Commonwealth offers a "transition team" to help transition your book and clients. They are also the only B/D that will send you popcorn AND a movie in their introduction package.


I guess the major issues that seperate B/D's would be: support, size, products and name recognition. Other than that... being independent is pretty straightforward... the biggest difference is what B/D's name you have on the bottom of your business cards.

Jan 6, 2009 9:30 am

In addition...

In 2008, LPL ranked 1st in total number of reps with just over 6000... and also 1st in gross revenue at $2.7B

RJ ranked 5th in total number of reps with just over 2300... and 4th in gross revenue at $1.02B

and Commonwealth ranked 7th in total number of reps with just over 1000 reps... and 9th in gross revenue at $499M


Jan 6, 2009 9:38 am
SuperRecruiter:

I'll compare and contrast three major indie platforms:

LPL, RJ and Commonwealth.

First off, the 800lb gorilla... LPL.

LPL is an excellent platform... for those who know what they are doing. They provide very little in terms of administrative or "back office" support. That being said, they also offer access to a wide range of products and services and they are obviously the "largest" indy B/D out there. If you're really looking to build your business on your own without to much interference from your B/D, LPL is probably the way to go. Payout can reach the 95% range.

Raymond James provides much more support. They have a large back office staff ready to assist you in many ways. RJ also offers a wide range of products and services. RJ would be the way to go if you haven't been in the business for 10+ years or you simply don't want to have to deal with alot of administrative tasks. Excellent company with excellent track record.  Payout is usually between 75-95%, depending on services.

Commonwealth is on par with both LPL and RJ in term of compensation. They also have a fair amount of back office support, but not comparable to RJ. They are also the smallest B/D of the three. However, what they lack in size or support, they more than make up for with class, style and dignity. I have never seen a more professional group of hard working, honest people than I have seen at the home office for Commonwealth. I'm also fairly confident that Commonwealth offers a "transition team" to help transition your book and clients. They are also the only B/D that will send you popcorn AND a movie in their introduction package.


I guess the major issues that seperate B/D's would be: support, size, products and name recognition. Other than that... being independent is pretty straightforward... the biggest difference is what B/D's name you have on the bottom of your business cards.



Let me make a wild guess-  RJ is a paid client of yours, and LPL isn't.  Right?

Jan 6, 2009 9:40 am

Incorrect. They are all paying clients of mine. =P I can only give information on B/D's that I am familiar with, ofcourse.

Jan 6, 2009 10:31 am
LuvIndy:

If I were to guess, RJ gives the most support, which is why it is tempting to most. I would also venture to say that of all the independents, when you are at the bottom of the spectrum (i.e. 200k-300k) they take a bigger cut, (I clear about 73% because of advisory fee expenses to RJ) but when you get toward the top (1mm+) they offer the potential for near 100% payout with some incentive plans they've got in place.

Stuff like advisory fee payout gets much bigger when you've got 50mm+ in the platform.

 
Strange qeustion, but how can a BD approach 100% payout and make money, and provide any level of service?  And it sounds like RJ's service is pretty good.  I just don't understand the economics of it.
Jan 6, 2009 12:07 pm

Haircuts and Ticket Charges . . .

Jan 6, 2009 12:26 pm

The biggest negative I've harped on again and again is the annuity haircut that RJ implemented a couple of years back.  Considering about 20% of my business is L-share annuities, I have no interest in going to Raymond James unless I just feel like getting paid less for my work.

 
...and based on recent reductions at LPL, I would guess that ticket charges are higher at RJ.  All that being said, RJ is a fine choice and when I looked at them, they finished a close second...but that was before they decided to cut rep payout on annuity business.  If you couldn't tell, that's a real burr under my saddle.
Jan 6, 2009 1:34 pm
iceco1d:
B24:
LuvIndy:

If I were to guess, RJ gives the most support, which is why it is tempting to most. I would also venture to say that of all the independents, when you are at the bottom of the spectrum (i.e. 200k-300k) they take a bigger cut, (I clear about 73% because of advisory fee expenses to RJ) but when you get toward the top (1mm+) they offer the potential for near 100% payout with some incentive plans they've got in place.

Stuff like advisory fee payout gets much bigger when you've got 50mm+ in the platform.

 
Strange qeustion, but how can a BD approach 100% payout and make money, and provide any level of service?  And it sounds like RJ's service is pretty good.  I just don't understand the economics of it.
 
Fee-based platform "admin" fee. 
 
Ice is right. That's apparently a big profit center for them, and if you discount your payout drops way below 90%. Ticket charges run $26 for most stuff. $30 paid by the client in advisory accounts.
 
 
Jan 6, 2009 4:47 pm

Makes sense.  So the "payouts" may be pretty high at the indy shops, but you have to be careful about the type of business you do to avoid being fee'd to death.

Jan 6, 2009 6:45 pm

True, but to be fair to RJ you do actually get 90% if you charge full fee. It's just that if you want to discount, the advisor takes all of the hit, where RJ has a flat percentage they'll take.

Also, like I said, this is mitigated as you get to higher levels, as they rebate or discount their split when you have 50mm+ and I think 100mm+ in assets in advisory fee programs. In the indy world, with RJ anyway, that is not uncommon.