The firm added $6.5B in assets in the fourth quarter, mostly from big brokerages.
Market turmoil isn't holding back Raymond James Financial Inc.'s recruitment of financial advisers as it presses into the Northeast.
The firm added 14 teams and lost one in the fourth quarter to gain a net $6.5 billion in assets, more than tripling its net asset increase in the same period a year earlier, according to publicly reported data gathered by InvestmentNews. Its biggest win was a five-person team from Bank of America Corp. that manages $2.9 billion in West Nyack, N.Y., the data show.
Raymond James is bulking up as the collapse of oil prices and concerns about a global economic slowdown roil debt and equity markets. Its pace of recruiting in fiscal 2015, which ended Sept. 30, was the strongest since the financial crisis when banks offered financial advisers big retention packages to help keep their brokerage businesses together.
“You've seen pretty good recruitment by Raymond James from the wirehouses over the past year,” said Chris Allen, a New York-based analyst at Evercore ISI. As advisers at wirehouses see their retention deals expiring, he said they're asking themselves, “Ok, do I want to stay here?”
Three of the four major brokerages on Wall Street — Bank of America Merrill Lynch, Morgan Stanley, and Wells Fargo & Co. — have reported 2015 earnings, and so far only BofA Merrill Lynch posted an increase in adviser headcount.
In fiscal 2015, Raymond's private client group, which includes its employee and independent brokerage businesses, posted its second-best year for recruiting, behind 2009, when banks were struggling to recover from the financial crisis, according to its annual reports.
Its pool of financial advisers rose to 6,596 at the end of September, up 5% from a year earlier and swelling 29% from fiscal 2009, regulatory filings show. Headcount increased to a record 6,687 at the end of December, according to a quarterly earnings statement this month.
“Raymond James, from a recruitment standpoint, is firing on all cylinders,” said Tash Elwyn, president of Raymond James & Associates, the firm's employee broker-dealer business, which has about 2,500 advisers. The momentum continues to build on itself, he said.
Four years ago, when the firm first spoke with the $2.9 billion BofA Merrill Lynch team that joined in November, the advisers weren't convinced the firm had the technology and resources they needed to make the jump, according to Mr. Elwyn. But after watching others make the switch from big brokerages, they finally called back in the summer of 2015 to “re-engage” in talks, he said.
Founded in 1962, Raymond James has been expanding beyond its regional roots in the Southeast. The St. Petersburg, Fla.-based firm is targeting advisers on the West Coast and in the Northeast, at times attracting large teams that produce as much as $8 million of annual revenue, according to Mr. Elwyn.
Last month, the firm said it was buying the U.S. private-client business of Deutsche Bank AG, which will operate under the Alex. Brown & Sons brand and accelerate its push into the Northeast.
Raymond James offers advisers technology that's as sophisticated as the wirehouses, making it an easier decision for them to break away, according to Danny Sarch, president and founder of wealth management recruiting firm Leitner Sarch Consultants.
“They've been consistently upgrading,” he said. “Large successful teams are willing to consider them.”
Culture also matters. When advisers depart Raymond James, the firm won't solicit their clients, a policy that may be helping with retention, according to Mr. Sarch. In other words, “you better keep them happy,” he said.
The firm also picked up teams from Morgan Stanley and Wells Fargo in the fourth quarter, according to data gathered by InvestmentNews. Both wirehouses saw a 1% decline in headcount within their wealth-management units last year, while Bank of America Corp.'s full-service brokerage business Merrill Lynch had a 3% gain in the number of financial advisers. UBS Group AG has yet to report its fourth-quarter results.
Assets at Raymond James' private-client group increased 3% last year to $473 billion, and another $50 billion of client assets are expected to be added with the purchase from Deutsche. But the firm is still relatively small next to the wirehouses.
While some advisers are leaving the wirehouses, Wall Street's biggest brokerages still have a stronghold on the industry, according to Mr. Sarch. “Wirehouses are still everyone's target and still some people's destination,” he said.
