RJFS Conference: Capital-Access Focus ‘Not Optional,’ Says Helck

Raymond James wants advisors to work more with clients on both wealth accumulation and distribution

Raymond James COO Chet Helck told more than 1,600 independent advisors on Wednesday that the firm was moving to help them compete with banks in retirement services, saying that capital-access accounts and services were “not optional." "This is huge," he said. "They are going to steal your clients.”

To encourage clients to use these accounts, Helck (left) said during Raymond James Financial Services' national conference in Las Vegas, the firm is waiving fees on such accounts for one year, if there is $250,000 or more in the account. For accounts of this asset size and receiving direct deposits (of Social Security or other payments), the fee will be waived indefinitely, the COO added, receiving applause from the advisor-based audience.

"You can't just be seen as growth experts," Helck explained. Despite the fact that capital-access accounts are already free for those with $500,000 or more in assets, only 37% of clients have this type of account, he noted. "You must provide cash-management services or risk losing clients," said Helck. "Position yourself as the manager of your clients' income."

“This is a very good positioning strategy,” said Paul Veltman, an independent advisor based in Grand Rapids, Mich. “We want to be able to serve clients in as many ways as possible and understanding their cash flows and their spending patterns is a part of our job.”

Ironically, as Raymond James’ executives continue to portray the firm’s culture as being client-centric rather than product-centric -- like some of its larger banking rivals -- they say that the company has to take more steps to compete with the banks in the retirement-income arena. Programs and policies that push capital-access accounts and related services is part of that effort.   

“Do all our advisors want to deal with checks? Probably not,” said Dick Averitt, CEO of Raymond James’ independent broker-dealer in an interview on Wednesday. “But we have to help clients and advisors get more into the retirement-income mindset,” which means working on both the accumulation and distribution of assets.  

dick averitt“As Chet said, ‘Like it or not, you may want to be in the checkbook business,' ” Averitt (left) added. “But we as a firm will help you with the business, because we have to bring advisors over to the banker mentality to a certain extent.” Such efforts are not new, he explains, but they involve more focus from time to time.

As Helck reminded advisors now attending the independent broker-dealer conference, the firm aims to grow its business 15% a year though recruiting, market appreciation and higher advisor productivity. Boosting retirement-income work is part of the latter, said the Raymond James COO, who noted that the company plans to introduce securities-based lines of credit soon, which "will allow clients to borrow against their investments without disrupting their portfolios." 

“We have no shortage of confidence that we can attract new clients and are capable of this advice and execution,” Averitt said.  “We are talking about giving clients banking services -- not forcing advisors to work in the banking model or structure.”

Regulatory Issues

Helck acknowledged that there are several regulatory issues still confronting advisors – most recently the Department of Labor’s moves to regulate retirement-plan service providers. “Yes, it’s a big deal,” he said in his speech.  

However, says Averitt, the firm is working with regulators and legislators on this and other pressing issues. “We do not want to be flippant about it … but we are doing what we can, so advisors can put their focus on giving clients access to capital, information online and other services,” said the Raymond James Financial Services CEO in an interview. “This is what is urgent for advisors. When it comes to fiduciary matters, we are doing all we can do stay on top of things.”

High-Tech Plans

As part of its national conference, Raymond James has rolled out advisor access to accounts and other information on iPads and iPhones. It hopes to make such capabilities available to other Mac-based technology by 2012, according to Josh Bohlander, director of technology product management.

The firm has also eliminated the need for advisors to carry around separate devices for their access codes. As of early April, advisors have been able to get this data on their iPhones and Blackberries. “This just makes it much easier for advisors to do business,” said Bohlander in an interview Wednesday.

Advisors now have access to more custom-reporting tools, he says, and – as of April 24 -- clients automatically see their account information displayed in a pie chart when they go online. “We’ve been working with large groups of clients and are seeing some positive results,” Bohlander shared.

Overall, Raymond James says only about 20% of clients access their accounts online.  "We many not always get everything right the first time," Helck explained in his talk, referring to changes made two years ago to client access that met with intense criticism. "But we listen. And we don't stop until we get it right." 

“We are seeing some incremental leaps in customer satisfaction,” added Bohlande. “We haven’t really marketed all of the client-friendly tools yet, but we’re at a good point now, so we can promote this functionality."

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