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Raymond James' headquarters in St. Petersburg, Florida

Industry Spotlight > Broker Dealers

Raymond James' Profits Take $55M Hit From Fines

By Melanie Waddell

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Raymond James Financial said late Thursday that its latest results took a hit from legal and regulatory matters, “including an incremental $55 million provision” tied to the Securities and Exchange Commission’s industry sweep of firms’ off-channel communications, according to a statement made by CEO Paul Reilly during the firm’s earnings call with analysts.

The provision in the quarter ending Sept. 30 was a results of records not being kept for electronic communications with clients on mobile phones and messaging apps, which came to light earlier this year.

The SEC has brought charges against 40 firms and ordered more than $1.5 billion in penalties in the probe since December 2021, SEC Chariman Gary Gensler said Wednesday.

“Combined with the provision in the fiscal third quarter [ended June 30], we are confident that we are now fully reserved for this matter,” Raymond James CFO Paul Shaukry explained on the earnings call.

Overall, Raymond James reported net revenues of $3.05 billion, up 8% from a year ago. Its net income of $432 million was down 1% from last year, while its earnings of $2.02 per diluted share were up 2%.

Net revenues grew from last year thanks to higher asset management and related administrative fees and the benefit of higher short-term interest rates on net interest income and bank-deposit program fees from third-party banks, Raymond James reported.

“The 5% sequential increase in quarterly net revenues was primarily due to higher asset management and related administrative fees and investment banking revenues,” the firm reported.

Excluding $34 million of expenses related to acquisitions, quarterly its adjusted net income was $457 million, or $2.13 per diluted share — roughly flat with the year-ago results of $459 million and $2.08, respectively.

Its Private Client Group had 8,712 financial advisors as of Sept. 30 vs. 8,681 a year ago. They work with about $1.2 trillion in assets under administration, up 16% from the same period in 2022.

— Janet Levaux contributed to this report.

Melanie Waddell

@Think_MelanieW

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