Unlike some large rivals, Raymond James is adding financial advisors. In the quarter ended June 30, the Private Client Group grew by 115 advisors and ended the three months at 7,719 — a net increases of 434 over June 2017.
“We continued to retain and attract high-quality financial advisors across all of our affiliation options,” according to CEO and Chairman Paul Reilly. “We are on track for record financial advisor recruiting results in fiscal 2018,” which ends Oct. 31.
PCG assets under administration rose 14% year over year and 4% sequentially to $719.5 billion. Fee-based assets stand at $343.1 billion and grew more aggressively: 24% over June 2017 and 6% over March 2018.
Plus, the unit boosted its revenue by 13% from last year to nearly $1.3 billion and pretax profits by 3% to about $132 million. Compared with last quarter, though, sales grew just 1%, while pretax income fell 16%.
Across the company, net revenue improved to $1.8 billion in the second quarter, up 13% from the year-ago period and 1% from the earlier period. After-tax net revenues were about $232 million, or $1.55 per share vs. $183 million, or $1.27 per share a year ago, and $243 million, or $1.63 per share, in the prior quarter.
On a conference call with equity analysts, Reilly said some costs that kept net income down sequentially were tied to business development, such as conferences and recognition events.
“But [there are] also significant recruiting and onboarding expenses, about 115 advisors plus a new correspondent from which all should be great investments going forward,” the executive explained. “These are lumpy as to timing, and they’re really investments for the long term.”
Push & Pull Factors
Like Reilly, Tash Elwyn — head of the employee advisor channel Raymond James & Associates — says the firm is “firing on all cylinders across affiliations.”