Inside Raymond James’ Minority Stake Strategy

The interview took place a few weeks after the annual Raymond James Elevate conference, which brings together thousands of advisors and branch professionals from across the independent channel as well as recruiting prospects from the RIA and broker-dealer industries.

Elevate 2025, Reid said, offered the new leadership team an opportunity to demonstrate its commitment to Raymond James’ longstanding goals and strategy while spotlighting the firm's fast-evolving suite of advisor technology and support services available across its affiliation models.

Here are highlights from our conversation, edited for length and clarity:

THINKADVISOR: Before we talk about the minority investment strategy and how that fits into Raymond James’ broader strategy, can you give us a review of Elevate 2025 and what you shared with advisors in attendance?

SHANNON REID: Absolutely. To start with, this year was the first time our new CEO, Paul Shoukry, led the conference, having now fully taken over from Paul Reilly, who continues to be an important advisor and board member for the firm.

One of our big goals was to just make sure our advisors and their teams are fully aware of our commitment to them and all the investments that we’re making as a firm to support them and their businesses. We put a lot of effort into reinforcing how important the culture of connection and independence is for Raymond James. That’s not going to change, now or in the future.

We also put a spotlight on some exciting new resources, many of which you have already covered on ThinkAdvisor. One highlight that really resonated with our advisors is the talent outsourcing service we are now providing. We are helping our independent branches find and identify candidates for various roles within their branches — whether they’re entry-level roles, advisor roles, support roles, etc.

There’s already been quite a bit of demand for that capability, and we expect that will continue. The same is true for our administration extension program, which allows branches to bring in experienced professional staff on either a temporary basis or, in some cases, a permanent basis. The branches are getting support in a number of areas, including paraplanning and data management.

Another big topic was our announcement that we are now able to take minority equity stakes in advisor practices to support a number of important goals, including succession planning and to support merger and acquisition activity.

Can you tell us more about the response to the equity investment strategy? How far along is the firm in standing up this capability?

Right now, I would say we have gotten the program off the ground and running in an official capacity, but it is still in the relatively early stages. Thus far, we’ve been focused on a select group of businesses and working through the investment process in a careful way. We are making sure we have the process right before we expand the approach.

The fact of the matter is that we are not a private equity partner — we aren’t just going to follow that playbook. We are a different kind of partner who is providing equity to help advisors achieve their goals as business owners who want to remain independent for the long term.

A lot of the early interest we are seeing is in the succession planning area. As you all know, the multiples that are available to quality advisor practices that sell to PE firms or strategic acquirers are really high. That’s great for the business owner, but it actually makes it really challenging for anyone who is considering an internal succession strategy that will keep the firm independent.

We feel like our minority investment program can be a powerful solution in this context. It gives advisors who don’t want to hand off their practice and their clients to a PE buyer or a big RIA aggregator an opportunity to transition out of the practice while still maintaining its character as an independent entity, one that is now being run by a new generation that is committed to the practice for the long term.

So far, we’ve done a number of deals from that perspective, where Raymond James has come in and taken a minority stake in order to provide the necessary liquidity for the original business owner to leave the practice. The next generation buys the remainder of the practice, and then we set up a structure where they can actually earn the minority equity stake back over time as they grow.

As I noted, a consistent theme in all the deals we’ve undertaken so far is the interest in retaining control and remaining independent. These aren’t commodity businesses that we’re talking about here, and so cookie-cutter deals aren’t going to work. Each advisor has built their business in a unique way, and they have a deep commitment to their clients, fellow advisors and staff.

Do you have any specific targets or goals for the number or size of investments you are aiming to make in the next few years?

We don’t have a specific target. We're not sitting here saying we have to have 20 or 30 or 50 deals in a specific timeframe.

The fact of the matter is that we only want to do deals that make sense for everyone involved. As a well-capitalized firm, we have the capacity to do a large volume of deals, but we also have a responsibility to be good stewards of that capital and to deploy it in a prudent manner.

Our advisors have been great partners so far in helping us to stand up a minority investment program that works. Each deal is bespoke and developed on an individual basis, because every practice is a little different. Their goals are different and their needs are different, and we need to be responsive to that.

Do you expect to make any full acquisitions and transition any advisor practices to the employee model, as opposed to just taking minority stakes? 

We have not done any deals that are full acquisitions yet. We certainly have some advisors and business owners who have asked us to sharpen the pencil and look at that. Again, we are taking a calculated approach on all these issues, because we want to make sure we get that right.

Can you offer us any perspective about recruiting trends within Raymond James and across the industry? For example, are you pursuing Commonwealth advisors who may be hesitant about joining LPL?

Yes. At a high level I would say that recruiting momentum for us continues to be strong. It was strong heading into the LPL-Commonwealth event, and it’s remained strong since that event.

To be clear, we frequently talk to all manner of advisors in a wide variety of situations who are currently exploring their options for where to base their practices. It’s not just about targeting advisors who happen to be facing an unexpected acquisition event.

Advisors who are thinking about moving their practices face a big task in trying to understand and compare their options, so we try to be as responsive and engaged as we can. We continue to have some great conversations with some great teams. We’re always happy to talk to high-quality advisors who want to run their business in the right way and who want to have a relationship with a long-term partner.

At the end of the day, our recruiting strategy is really based on the premise that we are bringing a fantastic and dynamic platform to advisors who want a stable, long-term partner that can help fuel the next phase of their growth. We aren’t out there offering the highest-dollar offer that somebody is going to see. We don't generally have the highest payouts that are available on the street.

Instead, we believe in the value of the overall package for a financial advisor at Raymond James. In the independent channel, I believe, what we bring to the table is really unique in terms of the quality and breadth of resources — including the fact that we have a bank, the fact that we have a trust company, and the fact that we have deep relationships with our investment banking partners and capital markets teams.