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Raymond James Hosts Confab

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Raymond James’ independent advisor conference attracted about half of FAs affiliated with the St. Petersburg, Fla.-based broker-dealer: Roughly 1,600 advisors and 1,800 guests came to the greater Dallas area in late April for the four-day event. For many attendees, the highlight of the event was a talk by former President George W. Bush, who lives in the area and just opened his presidential library.

“Unlike many other firms that seem obsessed with the number of advisors affiliated with their firm, we’re much more focused on the quality of advisors and helping those advisors, like you, increase their client assets,” said Scott Curtis, president of Raymond James Financial Services in his opening remarks.

Still, Curtis acknowledged the presence of 65 prospective advisors who are attending the event to check out the broker-dealer. He also pointed out that in 2008 RJFS included 3,150 affiliated advisors with nearly $110 billion in client assets. As of April 19, it had 3,240 advisors with close to $175 billion in client assets. “So in five years, the advisor count is up roughly 3%, while client assets have increased 60%,” Curtis said.

Vin Campagnoli, chief information officer for RJFS’ parent firm, says the firm spends over $200 million a year on technology and is getting strong results from this effort. “We have increased our spending 30% over the past two years,” Campagnoli said. “No one else [in the industry] can say that.”

Right before the conference, Raymond James received the Bank Insurance and Securities Association’s 2013 Technology Innovation Award for the firm’s commitment to technology-based industry solutions and the rollout of its financial planning software, Goal Planning & Monitoring (GPM).

As for the company’s overall growth plans, “Don’t overcomplicate your strategy and your focus,” said Raymond James (RJF) CEO Paul Reilly, when asked whether the company planned to expand organically or through additional acquisitions, like its purchase of Morgan Keegan (which wrapped up in April 2012 and was followed by its platform integration in February 2013). “With Morgan Keegan, we had such a good experience,” he said, “but that’s because the cultures were nearly identical.”

Citing the average age of advisors, 58, Reilly said further that broker-dealers “can’t just go on stealing from each other.” Thus, one of the alternative paths to growth for Raymond James will come in training prospective advisors, using the “good training group” that Morgan Keegan had and that Raymond James kept intact as part of the Morgan Keegan acquisition.

Raymond James’ revenues for the quarter ending March 31 were $1.14 billion, a jump of 31% from the year-ago period and 3% from the earlier quarter. The sales results topped analysts’ expectations and reflect, in part, the addition of results produced by some 900 advisors and other employees with Morgan Keegan, which the company acquired last year.

Net income for the quarter was $80 million, or $0.56 per share—up from $69 million, or $0.52 per share in the year-ago period, but slightly below the results of the prior quarter, when it had net income of $85 million, or $0.61 per share. Excluding special items, earnings were $0.68 per share (on net income of $96.5 million), up 6% over its EPS last year and down about 1% from EPS in the quarter ending Dec. 31. Analysts polled by Reuters had expected earnings of $0.68 after special items.

Financial assets under management grew to a record $51 billion, up 30% from last year and 10% from the earlier quarter. Assets under administration reached a record for the company: $407 billion, up 39% from a year ago and 5% from the quarter ended Dec. 31.

The Private Client Group reported fees-and-commissions growth of about 31% over last year and 2% over the preceding quarter to $615.2 million. Sales for the group were $726.8 million, an increase of 28% from last year and 2% from last quarter.

The headcount for advisors in PCG worldwide was 6,297—up from 6,289 as of Dec. 31 and 5,396 a year before. In the United States, the unit includes 5,431 independent and employee reps, a slight increase from 5,427 in the earlier quarter and a jump of about 900 from 4,532 in March 2012 (before the Morgan Keegan purchase).

James J. Green contributed to this report.