Is Raymond James the fifth wirehouse?
It's a comparison the firm's executives have avoided, maintaining they are not interested in being the biggest broker-dealer in the industry. But the firm's head count of around 6,200 independent and employee advisers now rivals the 7,100 advisers at the smallest wirehouse, UBS Wealth Management Americas.
And while Raymond James focuses on maintaining its culture as the “premier alternative to Wall Street,” the firm is showing no signs of slowing its growth and closing the gap in terms of size and scale.
Speaking at a company conference Wednesday in Washington, chief executive Paul Reilly outlined an aggressive growth strategy that would push Raymond James' employee unit, Raymond James & Associates, into the West and Northeast. The states that are being especially targeted are California, Washington and New York.
Mr. Reilly said that the firm is continuing to drive recruiting growth in those geographic areas, but is also considering acquisitions in its private client group.
Raymond James has tied up most of the loose ends related to its 2012 acquisition of Morgan Keegan & Co. Inc. and is now flush with $1 billion in excess capital, Mr. Reilly said.
He declined to specify what size firm Raymond James would be interested in but said that it would be a “niche” acquisition, smaller than Morgan Keegan, which had around 1,200 financial advisers.
Most of the firms that fit that description, a number Mr. Reilly said he could count on his fingers, are still private.
“If they're not for sale, there's not much more than we could do to say that if you decide not to be private, we would love you to be part of us,” he said.
The acquisition would likely benefit the private client group. Scott Curtis, who is president of the firm's independent channel, said that his group will continue to grow with mostly smaller, individual additions.
In his remarks, Mr. Reilly also touched on fee increases being rolled out this year. It was a subject that was on the minds of several adviser attendees, one of whom spoke up during a private town hall to ask Mr. Reilly about them, according to advisers present. The meeting was closed to the press.
In response, Mr. Reilly said the firm had spent nine months meeting with an outside consulting firm to decide what changes to make to its fees. It was that determined that larger accounts were supporting smaller, less profitable clients with $100,000 or less, he said.
Rather than implementing account minimums, as some wirehouses and broker-dealers have done, the firm decided to do away with the fee waivers for smaller accounts.
Mr. Reilly said that the increases still kept the firm's fees well below the industry averages.