At the start of the year, Raymond James Financial Inc. CEO Paul Reilly said the firm was boosting recruiting bonuses for experienced financial advisers who work as employees. Now, Reilly is pondering the question of future compensation for the employees who work to support financial advisers.
There's no doubt that compensation for staff is under pressure industrywide, Reilly said Thursday during a conference call with analysts to discuss quarterly earnings.
"The pressure we’re really seeing is in admin support, whether its operations, risk, tech, branch professionals, comp is under pressure for the whole industry," Reilly said. "I know that from roundtables, every firm talks about that. It takes longer to recruit, recruiters are being recruited away, so it takes a longer time in hiring."
"We see [pay] packages come in, so we see comp pressure," he said. "Until the market more normalizes and we see a return across the sector, that could continue for the year. It’s a general comment."
Reilly did not comment specifically on pay packages for employees. Last September, Raymond James said it was cutting 500 jobs, spelling layoffs for 4% of its workforce, to control costs during the pandemic. The job cuts did not affect any financial advisers.
The Covid-19 pandemic has broadly shaken the market for jobs and caused shortages of workers in some industries. It slowed down recruiting of financial advisers in 2020 across the financial advice industry and it appears to be tightening the market for employees in the trenches, based on Reilly's remarks.
Meanwhile, Raymond James Financial reported a series of records in its financial results for its fiscal fourth quarter that ended Sept. 30.
The private client group reported record quarterly net revenues of $1.8 billion, up 29% over the prior year’s fiscal fourth quarter and 6% over the preceding quarter. It also hit record quarterly pretax income of $222 million, up 78% over the prior year’s fiscal fourth quarter and 14% over the prior quarter.
The firm's financial adviser head count also hit a record at the end of its fiscal year on Sept. 30, with a new high of 8,482 financial advisers, a net increase of 243, or 3%, compared to the same time a year ago.
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