Welcome to Financial Advisor IQ

How Raymond James is Knocking Recruitment Out of the Park

By Miriam Rozen September 4, 2018

News surfaced recently that a New York-based team with four senior brokers and more than $1 billion in client assets jumped in late June from Wells Fargo Advisors to Raymond James’ employee channel.

It likely surprised few industry observers to learn that another high-value team, this one led by Stephen Adler and Mark Levy, chose Raymond James Financial, given the recent pace of the firm’s recruiting.

But why has Raymond James recently attracted advisory teams at such a fast clip?

The answer may lay chiefly with its distinction as a champion of the Protocol for Broker Recruiting, which provides advisors with the rights to take their book of business with them if they move firms, according to new and long-time Raymond James advisors, managers, and recruiters.

Such a distinction has become more meaningful in an era when UBS and Morgan Stanley have abandoned participation in the Protocol, and speculation simmers that Merrill Lynch and Wells Fargo could exit too, those same sources say.

Its reputation as a Protocol stalwart helps Raymond James both win advisor loyalty and draw new recruits, they say.

“We began to see this Protocol might be going away,” says Levy, who led his New York-based team from Wells Fargo to Raymond James in June.

In that context his team started to seriously consider the move to Raymond James because of “the idea that there was this firm that was still out there and said to us, and repeated it over and over again, that your book is your book, the client is yours, if you decide to leave, the clients can go with,” Levy says.

“It’s not that we are looking to move again but knowing that you always have the possibility if you want, that was important to us,” Levy says.

Veteran Raymond James advisors apparently stick with the firm also because of its commitment to the sanctity of the advisor-client relationship.

“We have looked at other firms but we’ve always elected to stay with Raymond James,” says Lynn McIntire, a registered principal with Raymond James Financial Services and principal of Cadent Capital in Dallas, which has more than $300 million in assets under management.

Raymond James’ commitment to treating her clients as her own has kept McIntire with the firm for the past eight years. She began her career at Merrill Lynch but when she left that firm she recognized that her book of business was not explicitly hers to take, she says.

At Raymond James, however, she confidently answers the questions her new clients and prospects pose about the likelihood she will manage their assets for the long term.

“As long as I stay with the client and the client stays with me, regardless of the names on their statement,” she and the client will remain together, McIntire tells them, with the assurance that she is dispensing correct information because of Raymond James’ policies.

In its recruiting material on its website, Raymond James pledges explicitly to remain “dedicated to the advisor-client relationship, ensuring advisors have the freedom, control and resources to best help clients reach individual goals while also allowing advisors to grow their own practices and meeting their professional goals.”

“They are knocking the cover off the ball,” says Howard Diamond about Raymond James’ recruiting strategy.

As the chief operating officer and general counsel of Diamond Consultants, a New York-based recruiting firm, Diamond works regularly to recruit for Raymond James. Advisors at competing brokerages who are “disenfranchised” recognize quickly that if they move to Raymond James “they will own their book of business” if they ever decide to leave the St. Petersburg, Fla.-headquartered firm, Diamond says. “That is huge,” he adds.

Numbers corroborate Diamond’s claim that Raymond James has recently achieved standout success recruiting advisors. Raymond James’ client assets under administration grew to $754 billion by June 30 — or 14% from what they were at the same time one year before, according to the firm.

In the same time period, the firm also grew its advisor roster to 7,719 for all its channels – including both employees and independent contractors – a year-to-year increase of 434 advisors. Notably, within that time period the industry-wide number of registered representatives declined, according to Finra. Specifically, from January to June this year, the number of registered representatives dropped by 1,032 to 629,080, according to Finra.

Lynn McIntire

“We make it very clear, their client relationships are theirs, we won’t compete if they leave,” says Scott Curtis, who became president in June of Raymond James’ Private Client Group about the firm’s commitment to its advisors. That pledge holds true for all Raymond James channels, however, only if the defecting advisors don’t owe Raymond James any money; were not terminated for cause and have not signed non-solicitation agreements with their individual teams, or, in the case of certain advisor channels, other institutional employers, Curtis says.

In the future, Curtis hopes regulators — the SEC or Finra in particular — issue an industry-wide rule that holds firms accountable for even more robust policies to make advisors’ moves to new employers easier on clients.

Specifically, Curtis advocates for a regulatory rule that would make it the obligation of firms that lost advisors to tell those advisors’ clients where those advisors went and offer the clients new contact information for the defectors.

“Clients ought to know,” Curtis says.