Raymond James B-D isn’t buying – and not for sale, Averitt says

Raymond James Financial Services Inc. is focusing on growing organically — even though the firm is in a good position to acquire a smaller independent broker-dealer.

Richard G. Averitt III, the company’s chairman and chief executive, said that it has no intention of buying another broker-dealer. He also indicated that Raymond James Financial Services isn’t on the market, though the company might attract some attention, given its performance over the past several months.

On April 21, the broker-dealer’s parent, Raymond James Financial Inc., reported net income for its fiscal second quarter of $56 million, compared with just $6 million a year earlier. Net income was up 30% from the fiscal first quarter, which ended in December.

Net revenue showed a healthy increase in the quarter as well, up 26% to $734 million, versus a year earlier.

What’s more, Raymond James Financial Services generated more revenue in April than in any month in the company’s history. Total revenue last month was $165.5 million, surpassing the previous high in October 2007 by 8%.

“Nobody else has a business that I am comfortable with,” he said. “We have worked hard to build a firm with strong character.”

Moreover, if Raymond James Financial Services did buy another firm, it would have to pay bonuses to transitioning financial advisers. Mr. Averitt said that he would rather use that money for those advisers who have been with the firm a long time.

“Then I would need to cull the herd,” to figure out which advisers to keep, he said.

For those same reasons, Mr. Averitt dismissed the notion held by some observers that the firm might be up for sale, particularly as Thomas James is stepping down as chief executive of the parent company.

Given that the company has so many different operations — including its asset management business, its investment-banking operations and its international business — Mr. Averitt hopes that the company isn’t an attractive acquisition target.

“I want us to look like eating a pine cone,” he said.

E-mail Jessica Toonkel Marquez at [email protected].