Raymond James’ wealth management business delivered steady growth in advisor count, client assets and revenue in the first quarter of its fiscal year 2020, according to the company’s latest earnings report.
The number of financial advisors in the company’s Private Client Group reached a record 8,060, which was a net increase of 49 over the previous quarter and 245 over the previous year, Raymond James says.
Private Client Group assets under administration reached a record $855.2 billion during its first quarter, which ended December 31, a 7% increase from the previous quarter and 24% rise over the year prior, according to the report.
Assets in fee-based accounts grew even faster, reaching $444.2 billion by the end of December, a 9% increase from the previous quarter and a 31% jump year over year, Raymond James says.
The unit posted a record $1.41 billion in revenues for the quarter, a 4% rise year over year, according to the report. Of that, $347 million came from brokerage revenues, which was 5% lower than a year prior, Raymond James says.
Asset management and “related administrative fees,” on the other hand, shot up to $782 million in the last three months of 2019, which was 3% higher than in the previous quarter and 11% higher than the year prior, according to the report.
Pre-tax income of the unit was $153 million in the last three months of 2019, or 7% higher than in the preceding quarter but 7% down year over year, Raymond James says.
Financial advisor compensation and benefits played a big role in driving up expenses, rising to $857 million in the last three months of 2019, a 3% increase from the previous quarter and a 7% increase year over year, according to the report. Raymond James attributes the drop to “lower short-term interest rates on net interest income and [Raymond James Bank Deposit Program] fees from third-party banks, which contributed to a higher ratio of compensation to net revenues for both the segment and firm overall, as there are no direct payouts associated with those revenue streams.”
The firm overall posted $2.01 billion in net revenues, of which $460 million was in brokerage revenues, and a record $268 million in net income for the last three months of 2019, according to the report.