From the June 2011 issue of Research Magazine • Subscribe!

RJFS Introduces Changes in Fees, IT, Retirement Services & More at Confab

Raymond James hosts national conference.

(Las Vegas) Raymond James Financial Services, the independent channel of Raymond James, spread the word about several shifts in its fees, social-networking and other policies during its national conference, which took place May 2-5 in Las Vegas. While some of the changes were put in place on March 1 or earlier, RJFS CEO Dick Averitt drew attention to them during his keynote speech on Monday.

“We listened to you, and we eliminated the trading limits on the Ambassador accounts,” Averitt said in a general session on May 2, regarding a change that took place in October 2010. “We also heard your comments about cost, and we recently [on March 1] lowered administration fees on both Freedom and UMA accounts, which directly affects your retention of revenues. The savings goes back into your practices or into your pockets.”

In addition, says RJFS Chief Administrative Office Greg Williams, the company introduced a no-transaction-fee (or NTF) mutual fund platform for a popular account on March 1. This eliminates the $30 processing fee for the associated fund transactions. “To add money or rebalance, the fees charged in the past are now gone, so clients can do their rebalancing for free,” Williams said in an interview. “This is huge, and it’s been a long time coming.” The NTF platform is also accessible to employee-advisors affiliated with Raymond James & Associates.

Raymond James is also moving ahead to give its advisors more capabilities in terms of communicating with clients via social media.  While a policy allowing advisors to use social media in some ways has been in place for roughly nine months, a new policy that will let advisors communicate via social media on a real-time basis should be in place this summer, Averitt says. “I’m pleased to tell you that we are on the cusp on contracting with an outside service with which you will be able to enroll, which will enable us to track and supervise your communications — just as we already do [with] e-mail, to meet the requirements of our regulators,” he said in his May 2 speech. Other changes — such as letting advisors work and access client accounts on iPads and similar laptops — were rolled out at the national confab, the CEO says.

On May 4, Raymond James COO Chet Helck told more than 1,600 independent advisors and a similar number of other guests 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 said 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 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. “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.”

As Helck reminded advisors attending the independent broker-dealer conference, the firm aims to grow its business 15 percent 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. “We have no shortage of confidence that we can attract new clients and are capable of this advice and execution,” Averitt added.  “We are talking about giving clients banking services ­— not forcing advisors to work in the banking model or structure.”

According to Bill Van Law, head of business development for Raymond James’ independent channel, there were 56 prospective advisors at this year’s conference, including many from the wirehouse firms. “Of the advisors recruited by RJFS over the last two years, more than 75 percent came from wirehouses or employee firms,” Van Law said.

Michael Fisette of Issaquah, Wash., who left Bank of America-Merrill Lynch last year and attended this year’s conference, explained why he made the move: “We had a good experience at BofA, which paid us and treated us well over the years. It’s a great organization that moved to change, and we didn’t want to stay and complain.” As for the “breakaway-broker” phenomenon, he says that as retention bonuses end, more advisors could make the transition, if they “overcome some self-confidence issues and talk to others who have made the transition. No one goes back after going from wirehouse model to independence.”

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