Raymond James beat analyst estimates last week when it reported adjusted earnings per share of $1.47 and revenue of $1.69 billion for the quarter ended Sept. 30. Overall, net income rose 13% to $193.5 million from the year-ago period, thanks to improvements in the Private Client Group, Raymond James Bank and Asset Management.
Across the firm, client assets under administration increased 15% year over year to $692.9 billion, while financial assets under management jumped 25% to $96.4 billion.
CEO Paul Reilly said on a call with analysts that the firm’s advisor headcount and recruiting pipeline “continue to grow.” Advisors who have committed to move to the firm in the current fiscal year have “about $80 million” in combined yearly fees and commissions, Reilly added.
Raymond James’ Investment Advisors Division, which works with RIAs and is led by Bill Van Law, is an increasingly important contributor to the firm’s private-client results and fee-based growth.
The Investment Advisors Division, or IAD, boosted its assets under management by 36% over the past 12 months. Of the new firms joining it, 35% were active RIAs — not wirehouse breakaways, which had been the norm, according to Van Law.
The group, which hosted its 10th annual Wealth Managers Conference last month in Boca Raton, Florida, drew a crowd of nearly 400 RIAs and other guests — including about 50 representatives of prospective RIA firms.
“We recruit a good cross-section of the folks, and about two-thirds are breakaways,” Van Law said in an interview. The other third are existing RIAs looking to change their custodian, “which was our biggest surprise following the relaunch of our RIA platform, a process we started about six years ago.”
Today, he says, the firm has “a broad full-service platform” and “understands organic and inorganic growth, so we help [RIAs] by making ourselves and our resources available.”
One RIA with another custodian for the past 25 years, Van Law said, “did not get support for succession planning that he was looking for. With our team that has a process for acquisitions and successions, he came to trust us enough to move to us one year ago.”
The RIA, he adds, moved to Raymond James one week before its recent conference and is taking the final steps of an acquisition.
“I believe breakaways have reached a tipping point,” said Van Law. “And while the RIA model continues to attract advisors from the large national firms, the appeal of Raymond James is that it’s so much more than just a service provider or custodian, but a true partner to its RIAs.”