Raymond James Financial (NYSE:RJF) sees its wealth management business as its biggest growth opportunity, with record recruiting momentum and continued investment in technology helping the firm attract financial advisors, CEO Paul Shoukry said at a Wolfe Research event.
Wealth management accounts for about 70% of the company’s revenue, Shoukry said. Raymond James has approximately 9,000 financial advisors overseeing about $2 trillion in client assets across the United States, Canada and the United Kingdom.
Shoukry said the firm’s latest advisor survey showed a record 97% satisfaction rate. He attributed recruiting interest to the combination of the company’s culture and capabilities, including banking, trust, insurance and capital markets services.
Recruiting and geographic expansion
Asked about competition for advisors and the size of upfront recruiting packages, Shoukry said Raymond James aims to remain competitive without offering the largest payments. The firm targets a 15% long-term return on recruiting across market cycles and, on a weighted-average basis, has met or exceeded that hurdle in many cases, he said.
Shoukry said the firm’s recruiting success extends beyond any single industry acquisition or disruption. Interest has come from a variety of firms and across Raymond James’ affiliation options, he said.
He also identified room for geographic expansion. If Raymond James reached the same market share on the West Coast that it has on average in the rest of the country, it could nearly double the size of its business, he said. The firm is also focused on expanding in the tri-state area, where its market share is below its average elsewhere, he added.
In the registered investment advisor channel, Shoukry said industry consolidation has reduced service levels for some firms. Raymond James has sought to attract larger, higher-quality teams rather than very small RIAs, he said.
AI spending and advisor productivity
Raymond James spends more than $1.1 billion annually on technology, including over $100 million on cybersecurity, according to Shoukry. Artificial intelligence is the fastest-growing component of technology spending, though from a smaller base, he said.
The company is in the early stages of launching Meeting Manager, an AI-assisted tool designed to help advisors prepare for and document client meetings, update systems and identify follow-up steps. Some advisors have reported saving dozens of hours a week, Shoukry said.
The CEO said it is difficult to measure the near-term return on AI investment, but keeping pace with the technology is necessary to remain competitive. He said Raymond James intends to use AI to reduce administrative work and strengthen advisors’ personal relationships with clients, rather than replace those relationships.
Shoukry also said satisfaction with Raimond, the firm’s AI assistant, exceeds 98%, although the company is still training the system on its range of capabilities.
Capital priorities and market outlook
Shoukry said Raymond James’ first capital priority is organic growth, followed by acquisitions that meet cultural, strategic and financial criteria. The company also aims to pay an ongoing dividend of 20% to 30% of earnings and uses share repurchases to manage capital above its conservative target.
If suitable acquisitions do not materialize and capital continues to build, the firm could consider increasing buybacks, he said.
On industry pricing, Shoukry said Raymond James has several levers, including account pricing, cash pricing and advisor payouts. Asked whether the industry might move toward a platform fee instead of cash monetization, he said he could not predict the outcome but would be open to that approach if clients and advisors preferred it and the industry moved in that direction.
Shoukry said he does not expect substantial additional cash sorting from incremental interest-rate increases because clients have already had time to move cash into alternatives. He added that lending activity tends to respond to sharp rate changes, but borrowing can resume once customers adjust to a new rate level.
The firm recently completed its sixth consecutive fiscal year of record revenue and earnings and its 155th consecutive profitable quarter, Shoukry said.
About Raymond James Financial (NYSE:RJF)
Raymond James Financial, Inc. is a diversified financial services company that provides wealth management, investment banking, asset management and banking services. Through its financial advisors and related businesses, it serves individuals, families, businesses and institutions. The company offers financial planning, investment advisory and brokerage services, along with corporate finance, equity and fixed-income capital markets services. Its asset management business provides investment strategies and portfolio solutions, while Raymond James Bank offers banking and lending services.
