Raymond James reported record financial advisor head count of 8,327, a net increase of 179 from a year ago and 94 over last quarter, according to the firm’s fiscal second quarter 2021 results.
Devin Ryan, an analyst with JMP Securities, said that was a notable increase, after the firm increased its transition packages for recruits to the employee channel. Raymond James had traditionally not been the high bidder in the recruiting wars for advisor talent, stressing instead its advisor-centric culture.
But the recruiting win during the quarter was primarily on the independent side of the business; the employee channel lost 12 advisors during the quarter.
“And while recruiting momentum in [the employee channel] has increased greatly, employee advisor count is down slightly from the prior quarter, as improved recruiting was offset by a higher number of retirements, where assets are typically retained at the firm, as well as a smaller training class. However, the number of advisors scheduled to join is up significantly, not only in our employee channel but across all our affiliation options,” Raymond James CEO Paul Reilly said on an earnings call.
“On transition assistance, it became clear as a number of firms—not all—raised it significantly, we were not even close in the market, especially for large teams,” Reilly said. “So on those large teams, now when we come into the finals, we’re not the highest, but we’re in the ballpark—enough that people are saying they’re willing to make the trade for the dollars, the culture and the values. When we had deals that were literally almost twice as much as ours, it was hard for people to turn down the money even though they might’ve preferred coming here.”
Over the last four quarters, Reilly said the firm has recruited financial advisors domestically with a total of about $285 million in trailing 12-months production and nearly $44 billion of assets at their prior firms.
Reilly expects to see better recruiting numbers on the employee side next quarter, and he pointed to a strong pipeline of what the firm calls “commits,” advisors who have agreed to come over. That will likely be reflected in Q2's numbers; he said the firm has the largest number of big teams in the pipeline than at any time in the history of the firm.
Overall, Raymond James posted record quarterly net revenues of $2.37 billion during the quarter, up 15% over the year-ago period and 7% sequentially, beating analyst expectations by $80 million. The firm also had record quarterly net income of $355 million, or $2.51 a share, up 110% from a year ago and 14% sequentially, beating analyst expectations by 43 cents a share.
The firm's Private Client Group reported record assets under administration of about $1.03 trillion, up 40% from a year ago and 6% from last quarter. Private Client Group assets in fee-based accounts were a record $568 billion, up 7% sequentially and 48% year over year.