Mentioned In This Article

Raymond James Financial’s (NYSE: RJF) Private Client Group led the firm’s growth in the second quarter, posting a record $275 billion in client assets under administration, up from assets of $242 billion a year ago and $262 billion in the previous quarter. According to the firm’s fiscal second- quarter earnings report released Wednesday, the unit’s revenues and profits increased from the year-ago quarter, although pre-tax income was down 17 percent from the fourth quarter of 2010.

The Private Client Group reported profits of about $46 million, up 26 percent year-over-year, on revenues of about $557 million, a 19 percent boost over the second quarter of 2010. Revenues were also up 7 percent from the fourth quarter.

“Assets under management also grew to a record $35.6 billion due to both market appreciation and net flows,” said CEO Paul Reilly in a statement.

Net flows were not reported. While assets grew, the number of Raymond James advisors has been slowly declining over the last year, going from 4,531 a year ago to 4,472 this quarter. In December, advisor headcount was at 4,489.

Alois Pirker, Aite Group analyst, said the firm could’ve done a better job bringing in advisors.

During an analyst call this morning, Chet Helck, chief operating officer, said the advisors leaving the firm are those doing considerably less production than usual, particularly independent contractors. But he told Registered Rep. that the firm is recruiting large producers at about the same rate as they are losing these lower producers. He declined to disclose how many large producers the firm has recruited.

As investor confidence climbs, the demand for financial advisors has increased, and competition for those who are moving has heated up, Helck said.

“Everyone is seeing less movement overall,” he added.

Pirker said Raymond James’s asset growth for the quarter also was not as significant as he expected, rising only about 5 percent from the previous quarter, much of which could be attributed to market action. While the numbers aren’t bad, it looks more like the firm’s performance is stabilizing, rather than moving toward rapid growth, Pirker said.

“It doesn’t sound like it’s quite a growth story coming out of it,” he said.

The numbers could also be an indication that the window of opportunity for firms like Raymond James, Edward Jones and LPL to gain ground against the wirehouses is closing, said Pirker. As the wirehouses have struggled with mergers and other reputational issues, these other firms had the opportunity to swoop in and grab advisors and market share, but it doesn’t seem like Raymond James has been able to take advantage of that opportunity, he said.

“I don’t see Raymond James gaining market share with these numbers,” he said.

Merrill Lynch’s numbers already suggest that the wirehouses may be finding their footing again, as Bank of America’s Global Wealth and Investment Management (GWIM) division posted its highest earnings since Bank of America took over Merrill in late 2008. Morgan Stanley Smith Barney releases its quarterly report today.

Raymond James Financial as a whole reported net income of $80.9 million, up 45 percent from the year-ago quarter and down 1 percent from the fourth quarter. Meanwhile, revenues totaled $866.7 million, compared to $750 million a year ago.

During the analyst call, Reilly noted that it was a solid quarter, driven by strong fundamentals, but the firm is still subject to market conditions. “Who knows what tomorrow will bring?” he said.