Raymond James Beefs Up Its Advisor Platform, Retention Strategy

By Cyril Tuohy InsuranceNewsNet

By Cyril Tuohy

Recent enhancements to Raymond James Financial’s investment advisor platform are an example of an agency keeping its talent under the corporate financial tent by giving them the latitude to be independent, according to experts.

Beginning Sept. 1, financial advisors affiliated with the company’s Investment Advisors Division will have access to what the company says are “attractively priced alternative investments” serving the needs of high-net-worth clients.

The investments include private equity, real estate, alternative mutual funds, hedge funds, training and development, succession planning and acquisition consulting, marketing and RIA-focused conferences, the company said.

Bill Van Law, president of Raymond James Investment Advisors Division, said the enhancements are one more sign of the company’s “significant commitment to growing this division and attracting high-quality RIAs.”

The enhancements come on the heels of the appointment of four regional directors announced in July, and the introduction in March of a new compensation model for advisors with at least $100 million in discretionary client sales under management.

Ryan N. Shanks, chief executive officer of Finetooth Consulting in Longmeadow, Mass., said the recent moves signal that Raymond James is serious about creating a “cradle-to-grave” infrastructure to support its advisors.

Raymond James Financial Inc., the holding company for principal subsidiaries that include Raymond James & Associates, Raymond James Financial Services Inc. and Raymond James Ltd., employs more than 6,300 financial advisors and serves 2.5 million accounts in 2,500 locations in the U.S. and overseas. Total client assets are approximately $405 billion.

With satisfaction and retention rates already high, the moves prove the company wants to “evolve and to innovate,” Shanks said. “They want to show that we want to support entrepreneurial advisors,” he said in an interview with InsuranceNewsNet.

Raymond James’ new compensation model allows advisors to retain 100 percent of their advisory fees and pay a quarterly fee to Raymond James based on the amount of assets under management in each individual practice, the company said.

“This will appeal to successful employee and independent advisors who are exploring the RIA hybrid business model and looking for support and resource of a leading, full service firm,” said Scott Curtis, president of Raymond James Financial Services.

Raymond James, which traditionally competes against Ameriprise Financial and Wells Fargo Advisors as a cradle-to-grave haven for independent advisors, also has announced the hiring and promotion of four industry veterans to the rank of regional director, a sign of how serious Raymond James is about the Investment Advisors Division.

The four “relationship managers,” all with prior experience at big broker-dealers like Charles Schwab, UBS, Morgan Stanley and LPL Financial, are responsible for recruiting new advisors and scoping out potential acquisitions, Van Law, said.

Van Law said the four regional directors, announced in July, would “jump-start a growth spurt in our division with new RIAs and hybrid advisors." Hybrid RIAs are dually registered as an RIA and as a broker-dealer. Hybrid advisors are seen as better suited to offer a broader range of advice for high-net-worth investors.

Shanks said the changes to the compensation structure and the investment platform will help Raymond James accomplish two goals.

The first: helping the company retain advisors who outgrow the captive platform, giving them another place to go and by which to grow financially. The second: giving Raymond James an advantage over competing firms looking to poach advisors with promises of more independence, particularly as the full-service model is shrinking at the expense of the RIA model.

With second-quarter revenue from asset management investment advisory fees up 28 percent to $65.1 million, on higher asset values under management compared to the year-ago quarter, the company has every incentive to keep advisors under the Raymond James umbrella.

“The captive side doesn't want to lose those advisors to the independent side, and so the model is that we — Raymond James — as a whole retain, and in retaining we win together,” Shanks said. “They've figured that out and that is huge.”

Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].

Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].