Brokers and financial advisers who work as independent contractors are more amenable to leaving their firms during the COVID-19 pandemic and start anew at Raymond James Financial Inc., said Paul Reilly, the firm's CEO.
The reason is in large part because of the way those advisers run their businesses.
During the quarter ending in June, the broker-dealer saw stronger recruiting of advisers who are independent contractor than employees; in total, Raymond James recruited 113 advisers generating $71 million in annual fees and commissions.
Raymond James recently has been among the top recruiting broker-dealers in the industry.
“The reason is, most of [the independent contractor advisers] have their own branches and offices, so there’s no reason to put off a move and they can change,” said Reilly, who was speaking with analysts and investors Thursday morning to discuss quarterly earnings.
Due to travel restrictions forced by the COVID-19 pandemic, the broker-dealers under the umbrella of Raymond James Financial have made recruiting financial advisers more of a virtual experience, with much less emphasis on visits to the home office and face-to-face meeting with executives.
Raymond James has multiple ways for advisers to work under its roof; one is for the independent broker-dealer Raymond James Financial Services Inc. and another is as an employee at Raymond James & Associates Inc.
Independent brokers and advisers typically have their own offices or branches already set up, making recruiting from a rival that much easier because it does not involve a switch to a brand-new office, said Reilly.
Meanwhile, advisers who are employees typically work at large branches in city or town centers or in shopping districts with dozens of other people. Employees in general have shunned working at large offices if they can instead work from home during the pandemic.
That workplace environment is slowing down some adviser recruits, Reilly said, adding that some recruits are delaying their move until December. He added that Raymond James is also gradually reopening certain offices.
“We have an awful lot of advisers who have decided to put off their moves until September," Reilly said. "They have said they’re coming but they don’t want to transition until they are in a more comfortable spot in the pandemic."
"I think the employee side will do a little catching up once people feel comfortable about going into an office," he added.
The firm reported a total of 8,155 brokers and advisers at the end of June.
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