Raymond James Financial had a record fiscal year for recruiting, bringing in over $300 million in trailing 12-month production, the company announced in its fiscal fourth quarter earnings.
“That’s a little bigger than the Alex. Brown acquisition,” Chairman and CEO Paul Reilly said on an analyst call Thursday morning. Alex. Brown, Deutsche Asset & Wealth Management’s private client brokerage, was generating about $300 million in revenues when the acquisition was announced.
The brokerage added a net 467 financial advisors over the last year, and 94 during the fiscal third quarter, bringing total headcount to a record 7,813.
Reilly said it was the firm’s best recruiting year since 2009, when the firm brought on 778 new advisors.
If we enter a downturn, that could cause an episodic slowdown in recruiting, Reilly said, as advisors get distracted. But a downturn wouldn’t change much for the firm.
Chief Financial Officer Jeff Julien said advisor movement used to be more sensitive to economic environments than it is today. Now, it has more to do with what’s going on at competitive firms. He pointed to the fact that despite the good markets of recent years, recruiting hasn’t slowed.
The firm reported record quarterly net revenues for its private client group of $1.31 billion, up 12 percent year-over-year and 2 percent sequentially. Pre-tax income for the segment was down 8 percent YOY and 1 percent sequentially to $131.2 million. The unit had record assets under administration of $755.7 billion, up 15 percent over the year-ago quarter and 5 percent over the previous quarter.
Overall, the firm had record quarterly net revenues of $1.9 billion, up 12 percent from a year ago. Quarterly net income reached a record $262.7 million, or $1.76 a share, but missed analysts’ expectations by 7 cents, according to SeekingAlpha.com.
Reilly said the firm has been active in searching for potential mergers and acquisitions for the private client group and asset management businesses; and while the firm is not rooting for a downturn, a down market would provide M&A opportunities with better pricing.
“We’re talking to firms that we think could add to our capacity and strategically an execution ability all the time,” Reilly said. “We just have to find the right trigger.”