Raymond James reports strong quarter in private-client group

Pretax income up 44%, while revenue climbed 12%.
APR 10, 2014
Raymond James Financial Inc. reported record revenue and pretax income in its private-client group for its fiscal second quarter that ended in March. Net revenue for the quarter reached $812.2 million, up 12% from the prior year's second quarter, and 5% from the quarter ended in December. Pretax income for the quarter was $77.1 million, an increase of 44% when compared with the same quarter in 2013 and an increase of 8% compared with the quarter that ended Dec. 31. Raymond James' private-client group consists primarily of independent-contractor reps affiliated with Raymond James Financial Services Inc. and advisers who are employees with Raymond James & Associates. The company attributed the strong results in the private-client group, which has a total of 6,200 representatives and advisers, to adviser productivity, which was boosted by market appreciation and strong net new asset growth. Private-client-group fee-based assets reached $158 billion, representing 36.5% of the group's total client assets. Those assets should “provide tail winds for next quarter's results, as fee-based accounts in this segment are billed based on asset values at the beginning of the quarter,” according to the company. “We are very pleased with our continued retention, record average productivity, and the net additions of financial advisers in the private-client group this quarter,” chief executive Paul Reilly said in a statement. “Further, recruiting activity remains vibrant in both our employee and independent platforms.” The firm did not report the net number of advisers it added in the quarter. Meanwhile, Raymond James Financial, which encompasses capital markets, asset management and Raymond James Bank along with the private-client group, posted net revenue of $1.2 billion and net income of $104.6 million, or 72 cents per diluted share. Net income for the quarter was up 31% when compared with the same quarter of last year. “We had a strong first half of the fiscal year, with a 5% increase in net revenue and a 33% increase in net income over the first half of the prior fiscal year,” Mr. Reilly said in the statement. “For the quarter, a seasonal slowdown in [mergers-and-acquisitions] activity coupled with an increase in expenses prevented us from achieving a higher pretax margin.”

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