Raymond James Financial ended the fiscal fourth quarter at 8,712 advisors, up eight from the third quarter and 31 from the year-ago period, but the firm’s executives were optimistic about the scale of advisors in the recruiting pipeline.
The firm saw an increase in employee advisors on its platform, up 2% from a year ago to 3,693, while the number of independent contractors was down 1% sequentially to 5,019. On an earnings call with analysts Wednesday, CEO Paul Reilly said the firm’s recruiting results were impacted by the departure of one program during the year, in which 60 advisors left the firm. He didn’t say which firm it was, but it seems to be Concurrent Investment Advisors, which dropped its affiliation with Raymond James last fall.
Reilly pointed out that advisor movement is down 15% industry-wide, and the firm has a number of large teams in the recruiting pipeline.
“What we’re not seeing in number of advisors, we’re seeing in size of teams,” he said. “The number of teams that are generating $10-$20 million of revenue—we’ve never had so many come through at once. That has been a really big pickup in the pipeline.”
For example, the firm recently brought on Columbia Wealth Advisors, a team of 50 advisors with $3 billion in client assets at Umpqua Bank, to its financial institutions division.
For the fiscal year, the firm recruited advisors with approximately $250 million of trailing-12-months production and nearly $38 billion of client assets, Reilly said.
“These results do not include our RIA and custody services business, RCS, which had another strong year in recruited results,” he said.
Although the company does not break out RCS numbers in its earnings report, that business now represents 10% of the firm’s assets.
Domestic net new assets in the Private Client Group were $14.2 billion for the quarter and $73.3 billion for fiscal 2023, annualized growth from the beginning of period assets of 5% and 7.7%, respectively.
The Private Client Group also reported record quarterly revenues of $2.27 billion, up 14% year-over-year and 4% sequentially, on record quarterly pre-tax income of $477 million, up 29% year-over-year and 16% sequentially.
Total client assets under administration in PCG were $1.2 trillion, up 16% from the year-ago quarter and down 2% sequentially. PCG assets in fee-based accounts were about $683 billion, up 17% year-over-year and down 2% compared to June 2023.
Overall, the firm reported non-GAAP earnings per share of $2.13 for the quarter, missing analysts’ expectations by 15 cents, on revenue of $3.05 billion, down 8% year-over-year, beating expectations by $50 million, according to SeekingAlpha.com.
The executives acknowledged that earnings were negatively impacted by legal and regulatory fines, including an incremental $55 million provision related to the Securities and Exchange Commission sweep on off-platform communications.