The Trump rally has been good to Raymond James Financial and two other companies, which are set to join the S&P 500 index next Monday.
“Based on our review of the market’s progress – the S&P 500 is up 5.5% since the start of the year and 19% over the last 12 months – the Index Committee has revised the market cap guidelines for the S&P 500, S&P MidCap 400 and S&P SmallCap 600,” said David M. Blitzer, chairman of S&P’s Index Committee, in a statement.
As a result of the market’s movement, the market capitalization of Raymond James, Advanced Micro Devices and Alexandria Real Estate Equities has risen above $10 billion for each company, pushing the three firms into the S&P 500. Moving out of the S&P 500 and into the S&P MidCap 400 are Urban Outfitters, Frontier Communications and First Solar.
“These figures, which refer to total, not float adjusted market value, are reviewed from time to time. The previous change took place in the summer of 2014,” according to Blitzer.
Raymond James will be part of the GICS Investment Banking and Brokerage Sub-Industry Index of the S&P 500.
“We are honored to be included with this prestigious group of companies,” said Chairman & CEO Paul Reilly, in a statement.
“This represents a significant milestone for Raymond James, and a major accomplishment for our Chairman Emeritus Tom James, who brought Raymond James public more than 30 years ago, as well as the many current and past advisors and associates who have built this company to its current place among our industry’s leaders,” Reilly added. “Our addition to the S&P 500, like all of our corporate achievements, would not be possible without our client-first culture and the dedicated people who work here.”
Raymond James had net income of $146.6 million, or $1.00 per share, in the period ending Dec. 31 vs. $106.3 million, or $0.73 per share — a jump of 38% in 2015. Meanwhile, sales grew 17% year over year to $1.49 billion.
The advisor division says it had quarterly net revenues of $1.04 billion, a jump of 19% over the year-ago period and 8% over the prior quarter. Quarterly pretax income was $73.4 million, an increase of 6% from a year ago but down 31% from the preceding quarter; the company says this decline resulted primarily from “elevated reserves associated with legal matters.”
Assets under administration ended the year at $585.6 billion, a jump of 24% from December 2015 and 2% from September 2016. Private Client Group assets in fee-based accounts stand at $240.2 billion, or 41% of total AUA, representing a 26% increase from last year and a 4% jump from the earlier quarter.
The firm says revenues for the unit were driven by strong growth of assets in fee-based accounts, increased earnings on cash balances and higher transactional commissions. They also benefited from the Alex. Brown and 3Macs acquisitions, which closed during the quarter ended Sept. 30.
In terms of the number of advisors, Raymond James has 7,128, up from 6,687 a year ago — thanks in part to its Alex. Brown and 3Macs deals. The figure dropped 18, however, from the prior quarter.
The firm’s number of employee advisors — including those with Raymond James & Associate and Alex. Brown — stands at 2,985 vs. 2,771 a year ago and 3,098 in the earlier period. In the independent channel, the firm has 4,143, up from 3,916 last year and 4,048 in the prior quarter.
According to the company’s earnings release, Raymond James “refined the criteria [used] to determine our financial advisor population, which resulted in a decrease of approximately 100 advisors” in the period ending Dec. 30; the firm did not revise earlier figures, because the changes in its methodology “did not have a significant impact” on this data, it adds.
— Check out Janney, Raymond James Grab Merrill Reps: Recruiting Roundup on ThinkAdvisor.