Raymond James Chairman and CEO Paul Reilly said the firm was discontinuing advisor recruiting in the face of the coronavirus pandemic.
Reilly said the firm was deferring “face-to-face” advisor recruiting meetings, and deferring advisor transitions already underway, according to a note released Tuesday.
Raymond James, like many financial services firms, has been struck particularly hard by the market rout and rate cuts stemming from the coronavirus pandemic. The stock has fallen almost 50% since mid-February, when it touched over $100 a share.
The deferral to recruiting comes after the firm pulled in at least $2.5 billion worth of assets from newly recruited teams year to date. That includes a $650 million AUM advisor team in Dallas, Messick Peacock & Associates, which joined Raymond James from Northwestern Mutual Investment Services announced just one week ago.
Last month, the firm announced a wealth management associate program, WealthMAP, a two-year educational program for young professionals interested in a career as a financial advisor.
The firm said client assets stood at $854.8 billion at the end of February, which was 9% over the same time last year, but a 5% decline compared with January. The decrease in client assets was attributed to the decline in equity markets, “which has accelerated thus far in March,” according to the statement.
“We are also experiencing disruption in our investment banking business,” Reilly said. “While trading volumes in fixed income are elevated in March, dislocations in the fixed-income markets has negatively impacted principal transaction revenues.”
Due to market volatility, Reilly said, cash sweep balances increased to over $48 billion as of March 20, from $38.9 billion at the end of February. Spreads earned on the surging cash balances have dropped thanks to the Federal Reserve’s emergency interest rate cuts earlier this month.
Net loans at Raymond James Bank increased 7% from last year, but “as a result of rapid and widespread economic deterioration, we expect the entire banking industry to experience substantial increases in bank loan loss provisions. “We will be appropriately proactive in adding to allowance for loan losses, similar to our approach during the previous financial crisis,” said Reilly.
Edit: The headline of this article has been adjusted; Raymond James is deferring recruiting, not halting.