From the March 2013 issue of Research Magazine • Subscribe!

RJ Adds Sales, Shifts Grid

Raymond James Financial reported net revenues of $1.1 billion for the period ending Dec. 31, 2012, up 4% from the preceding quarter and a jump of 42% from the year-ago quarter. (The company acquired Morgan Keegan in the quarter ending June 30).

Net income for the quarter was $85.9 million, or $0.61 per share, up from $83.3 million, or $0.60, in the year-ago quarter and an improvement from $67.3 million, or $0.53, in the quarter ending Sept. 30.

Excluding $17.4 million of pretax expenses related to the Morgan Keegan acquisition, net income would have been $96.6 million or $0.69 per share. Analysts had expected the firm to have earnings of $0.68 without special items and sales of $1.08 billion.

Revenue in the private-client operations grew 35% from last year and 3% from the prior quarter to $712.8 million. Pretax income in the unit was $52.9 million, up 7% from last year and 5% from last quarter.

Fees and commissions in the unit were $595.5 million, a jump from $432.7 million a year ago and $578.6 million three months ago.

The advisor headcount in the United States, Canada and the United Kingdom was 6,289 reps, down 41 from the previous quarter, but up 933 from a year ago. In the United States, Raymond James had 5,427 independent and employee reps, down 25 from the earlier period and up 932 from a year ago, when it had 4,495 reps. 

The company says that its advisor recruiting activity “remains robust,” and that the drop in financial advisors was “driven in large part by [the] attrition of lower-producing Morgan Keegan advisors.” Also, the company says, retention levels of Morgan Keegan advisors that were offered retention packages by Raymond James as part of the acquisition is “extremely high.”

In addition, employee advisors with at least seven years of industry experience will have a new payout grid starting in October, the company says. Executives note that the new grid is “product neutral” and “simpler” than the grid in place since 2010 and that it includes more payout levels.

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