(LAS VEGAS) Executives of Raymond James Financial Services met with about 1,500 of the firm’s 3,120 independent advisors during the group’s annual professional-development conference, held March 3-6 in Nevada.
Tom James — chairman and CEO of Raymond James Financial, RJFS’ parent firm — also introduced his successor, Paul Reilly, to those at the gathering, which included nearly 50 of the firm’s 53 Chairman’s Club advisors (who have annualized revenue of at least $1.5 million).
Reilly, 54, will join the firm as president on May 1 and is set to become CEO one year later. He joined the company’s board in 2005 and is currently serving as executive chairman of Korn/Ferry International, a global search firm. He also has led KPMG International, which included some 100,000-plus employees and sales of $12 billion.
“We’ve been trying to recruit Paul for more than 20 years,” James says.
Advisors reacted favorably to Reilly’s introduction at a “town hall” meeting held March 5. “The town hall meeting was very well received based on what I’ve heard reps saying,” said advisor Laura Waller of Tampa, Fla. “They really liked the format and content.”
“At a time where access to and interaction with senior management is most important, the town hall [meeting] format gave us an unscripted insight into what is really going on behind the scenes and afforded us a true connection with the issues at hand,” said independent advisor Jon Wax of Tampa, Fla. “Tom [James] and [COO] Chet Helck cut through the noise of mass media and gave us the real answers we can now take to our clients.”
“The most important thing for advisors is stability,” explains James, “following their programs as usual, reinforcing their ideas, staying positive and maintaining strong client relations.”
Overall, advisors are performing many o the same tasks for clients that RJFS is doing for advisors, such as “distilling news and information and keeping everyone calm” through the present financial crisis.
“There are good investment opportunities in the marketplace and good yields on some bonds,” James says. “With their positive, constructive approach, the advisors can add value to the clients’ strategy.”
“Most advisors are more upbeat than I expected,” he notes. And this is the right attitude to have today, since many investors are looking to change who they work with. “Hosting seminars, for instance, can help those looking to work with someone who really has a helpful frame of mind.”
Given the prevalence of chaos in the marketplace, economy and on Wall Street, James says, many advisors have been contacting RJFS about a possible affiliation. “We can’t see the FAs who are calling, because we don’t have enough time for such a large number of meetings.”
About 100 prospective advisors attended the Las Vegas educational conference, and the total number of attendees was roughly 3,000. “You have to be a very strong, solid advisor to consider going independent in this environment,” says James.
“We’re adding as many people as we can that we can transition successfully,” he explains. In the last fiscal year, RJFS added nearly 400 new FAs.
Bill Van Law, the head of business development for RJFS, says recruiting of wirehouse representatives is up 281 percent in the early part of the firm’s fiscal year. Overall recruiting of FAs this fiscal year is up 71 percent, he says, over the prior full fiscal year.
And the average production, or revenues, of new advisors is up as well, by about 45 percent. In the first quarter of the ’09 fiscal year, for instance, recruited advisors had about $500,000 in yearly sales, according to Van Law.
RJFS aims to grow revenue about 18 percent to 20 percent a year via recruiting, he says. “This is digestible.”
The RJFS transition team includes nearly 40 individuals. “And we recently added an independent business consultant and CPA to our transition team,” Van Law explains.
“Advisors are looking for a family-type culture and feel that [some existing firms] have turned the lights off on them,” shares Dick Averitt, chairman and CEO of RJFS.
Although tough times require RJFS to cut expenses and slow down some technology projects, Averitt says the firm will not be letting staff go. “We will not cut the muscle of support.”
Providing clients and prospects with support is crucial in the current environment, shares advisor and conference presenter Carl Stuart of Austin, Texas. The veteran advisor, who grew his yearly revenue from about $700,000 to $2.5 million over the past decade and has done a weekly radio program since 1995, says investors have a large need for accurate financial information today.
“Speaking [on the financial crisis] is in huge demand because of fear,” Stuart says. “But remember, people do not want to hear jargon.”
In addition to public speaking, advisors can serve their clients and prospects well by sharing as much of their knowledge as possible by marketing, sending out monthly newsletters and meeting more frequently with clients. “Everyone deserves my best ideas all the time,” Stuart explains.
He uses model portfolios that he puts together using about nine equity funds and three bond funds, and has been able to outperform the S&P 500 in good times and bad, he says. In 2008, for instance, he moved to a ratio of 65 percent equity/35 percent bonds.
Stuart is very focused on setting the right expectations, which involves constructive listening, he points out. He typically asks prospective clients: “What would a successful consultation be for you, and what would you like to accomplish?”
“Through this repetitive process, you can produce success,” he says.
Rex Whiteside of Whiteside Investment Services in Houston encourages advisors to build business processes that “give clients a sense of security.” He also believes it’s very important to “nurture client relationships.”
As his practice moved towards sales of about $7 million, Whiteside wanted to improve his business processes to spend more time with his families and on other priorities. He accomplished this using Raymond James’ Practice Intelligence assessment tools, making lists of tasks to accomplish and hiring a coach. “This way, you can work on the business and not in the business,” Whiteside says.
He made sure he had a pitch book that truly represented who he was, how he serves clients and who his clients are. The templates for the pitch book also serve as a detailed reference on how his office is run. “Get it out of your head and on paper,” he explains.
Whiteside also insists that advisors set rules (or “checklists”) for maintaining their desired client base, track projects online and follow a clear action plan. In addition, he says he has won client business that larger firms have targeted by showing the clients exactly who he is, rather than just outlining generally what he thinks a client might want.
By paying close attention to these practice-management details and “slowing your systems down, you’ll increase referrals” in any market environment, Whiteside insists. o