March 18, 2013

Raymond James Introduces New Comp Model for Hybrid Reps

Model seeks to help retain RJFS advisors exploring RIA option; available to reps with $100 M or more in discretionary AUM

Raymond James Financial Services, the independent broker-dealer arm of Raymond James Financial, announced today a new compensation model for its reps who have at least $100 million in discretionary AUM that is designed to provide the best of two worlds: support of a full-service BD while building a fee-based to fee-only RIA.

Those RJFS advisors who meet the discretionary AUM level and wish to use Raymond James’ corporate RIA can do so, retaining the entirety of their advisory fees while paying a quarterly fee to Raymond James; those who wish to establish their own RIAs can do so as well.

Scott CurtisIn a statement, RJFS President Scott Curtis pointed out that another differentiator of the comp scheme is that 12b-1 trails on mutual funds paid to Raymond James “will be reimbursed directly to advisors’ clients, effectively reducing each client’s portfolio management costs.”

Curtis also said that those advisors who choose the hybrid model will not only retain access to RJFS’ technology, practice management and investment products, but will remain eligible for RJFS recognition council memberships.

In an interview last Thursday, Curtis stressed the new model’s “simplicity and transparency” and the key role it may play in RJFS attracting new advisors from rival firms while also retaining reps who are growing their businesses using an RIA-like model.

Just last week, Cerulli Associates released a report that showed that hybrid, or dually registered, advisors were the fastest growing channel as measured by assets under management; however, in a speech at the Investment Advisers Association compliance conference two weeks ago, Carlo Di Florio of the SEC's Office of Compliance Inspections and Examinations (OCIE) said that SEC examiners were uncovering “a lot of challenging issues” with dually registered advisors.

RJFS has 3,200 independent contractor representatives. 

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Read As Dually Registered Advisors' Assets Grow, SEC Zeros In by Melanie Waddell at AdvisorOne.

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