Raymond James Financial (RJF) posted a 7% year-over-year gain in profits for the quarter ended March 31, as revenue rose 9%. In the most recent quarter, net income was $113.5 million, or $0.77 per diluted share, on $1.3 billion in revenues, vs. profits of $104.6 million, or $0.72 per diluted share, on sales of $1.2 billion a year earlier.
The company announced a record number of advisors in its Private Client Group, which includes both its employee FAs and independent contractor registered reps: 6,384.
In an interview following release of its quarterly results, Raymond James CEO Paul Reilly credited an 11% drop in pretax income from the period ended Dec. 31 to several seasonal and onetime factors, including an increase in advertising for the quarter, higher FICA expenses and the firm’s decision in February to reimburse some advisors’ end clients for certain mutual fund fees.
Looking at results for the first two quarters, Reilly said “it’s the best first half we’ve ever had,” including “record net assets” along with the record advisor headcount. In the first six months of its fiscal year, Raymond James Financial posted $240 million in net income, or $1.64/diluted share, on net revenues of $2.54 billion.
Reilly played down the fear that Raymond James was “getting too big,” saying that since 2009 through 2015’s second quarter, advisor headcount increased at a CAGR of 3.9%, while Private Client Group assets under administration had increased at a CAGR of 15.1%. “We bring our advisors in one by one — that’s our desired growth,” he said, joking that Raymond James only makes acquisitions, like with Morgan Keegan, “every 20 years.”
Speaking during Raymond James’ national conference for its independent contractor reps in Las Vegas, he pointed out that “a record number” of advisor prospects—72—were attending the conference. “Recruiting is robust,” he said, while existing RJ “advisors choose to stay here; our turnover is very low.”