It’s always a competitive market for the recruitment of advisors, but the first quarter of 2020 was especially tough when it came to recruiting employee advisors and now Raymond James is improving its recruiting packages to turn that around, according to Paul Reilly, its CEO and chairman.
In the firm’s Private Client Group, the recruiting environment was “extremely competitive and we faced some challenges in a largely virtual environment,” he conceded during the company’s recent Q1 earnings call.
“On the employee side, there has been a modest slowdown in recruiting due to the challenges brought on by COVID and also increased competition for experienced advisors, where even our regional competitors have significantly increased the recruiting packages,” he said. “When someone is going to pay him 50% more” it’s tough to compete against that now, “so we’re just going to have to close that gap.”
Therefore, “in response to what we have seen, we have … enhanced our recruiting packages to be more competitive while also ensuring attractive returns to our shareholders,” he told analysts. He did not, however, provide specific details.
One More Factor
“Also impacting advisor count this year” was the firm temporarily decreasing the size of its new advisor training class by about 35 trainees, he said. That decision did, however, allow Raymond James to “dedicate more time and attention to newer advisors, as they seek to overcome the challenges presented by the current virtual environment,” he noted.
“While this will negatively impact the growth in advisor count when compared to prior years, when the training class was larger, it really shouldn’t have a significant impact on client assets,” he pointed out. “We believe our recruiting will continue to thrive, as advisors are attracted to our supportive culture and client-first values.”
As “we ramp back up the training, which we expect to, once we get out” of the ongoing virtual environment caused by the COVID-19 pandemic, “that will help also,” he added.