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Raymond James Financial

Raymond James, Ameriprise Report Slight Gains in Advisor Headcount

Raymond James Chairman and CEO Paul Reilly says the pace reflects higher competition for talent, especially in the employee channel.

Raymond James reported total advisor headcount at 8,233, up 173 on a net basis from December 2019 but down six from September 2020, according to the firm’s fiscal first quarter 2021 results. Chairman and CEO Paul Reilly attributed the slower growth to the increased competition for advisors, especially in the employee channel.

Meanwhile, Ameriprise Financial reported an advisor headcount of 9,922 as of the end of 2020, up just 51 advisors from a year ago and 17 from the previous quarter, according to its fourth quarter 2020 results.

Though their affiliation models and advisor culture "remains attractive," Reilly said, “the recruiting environment has become increasingly competitive, particularly in the employee affiliation option. ... However, we remain optimistic about the high level of interest from prospective advisors across all of our affiliation options.”

Raymond James has traditionally not been the high bidder in the recruiting wars for advisor talent, but the firm has recently increased its recruiting packages.

“It’s a hard choice for advisors when they come down to two places, when someone’s going to pay them 50% more,” Reilly said on a call with analysts. “We’re just going to have to close that gap, and still be a good economic return for the firm.”

Recruiting in the firm’s employee channel, Raymond James & Associates, hasn’t been bad, he added. It’s just down from where it should be. The firm reported 3,387 employee advisors as of Dec. 31, 2020, compared with 3,404 for the previous quarter.

“It’s always been competitive; we’ve always recruited people that had higher offers at other firms, and we’ve been very successful,” Reilly said. “Will we lose some people because of it? Yeah. We just felt that we got a little out of the market the last few quarters.”

Devin Ryan, an analyst for JMP Securities, said in an analyst note that the December quarter tends to be seasonally slow for recruiting.

“Ultimately, we feel comfortable around Raymond James’ recruiting positioning as competitive dynamics constantly ebb and flow, we think the company remains a destination of choice, it does have some levers at its disposal with what we believe is some room to increase competitive offers, and management’s commentary overall is encouraging,” he wrote.

Overall, Raymond James’ private client group posted record client assets under administration of $974 billion, up 14% from a year ago and 10% sequentially. Net revenues for the private client group were about $1.5 billion, up 4% from a year ago, while pre-tax income for that segment was $140 million, down 8% year-over-year.   

Ameriprise touted strong growth in its advice and wealth management segment. The firm said the average trailing-12-months production for its advisors was $674,000, up from $664,000 a year ago, due to the low interest rate environment. Total client assets were $732 billion, up 14% from a year ago. The segment’s pre-tax adjusted operating earnings were $352 million, down 9% from a year ago, but Ameriprise said the results were negatively impacted by $92 million from the reduction in short-term interest rates.

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