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Change Versus Growth for Advisors and Their Firms
By Frances McMorris
September 22, 2011
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"Growth is a controversial subject," said Chet Helck, chief operating officer of Raymond James Financial, Inc. "It’s optional, it’s painful and it’s risky," he added as he addressed a ballroom of female advisors at the 17th Annual Raymond James Women’s Symposium in St. Petersburg, Florida Thursday morning. "There’s a strong argument to say 'let’s not grow,'' he pointed out. "But the laws of the universe won’t permit it."
For Raymond James, the plan is for controlled growth of 15% a year for the entire business. Helck explained that 5% would come from the markets, another 5% would come from the revenue brought in by new recruits, while the final 5% would come from the advisors that the company strives to retain. “It’s not just a matter of whether you grow. It’s how much you grow.”
Dick Averitt, the chairman and chief executive officer of Raymond James Financial Services said the firm is about to announce a record year with revenue estimated to be up 12% over last year and average production per advisor up 15% from a year ago, even as recruiting fell off.
The firm’s employee arm, Raymond James & Associates, is also getting set to report record revenue, thanks to record average production of $538,000 per advisor, said RJA president Dennis Zank. Average assets under management are now at an estimated $70 million while total client AUM has hit a record of an estimated $90 billion, Zank told the conference attendees. “In 2003, we only had nine $1 million producers. Today we have 97.”
While those numbers seem small compared to the largest firms in the industry -- behemoths like Bank of America Merrill Lynch, Morgan Stanley Smith Barney, UBS and the like -- Raymond James hasn’t suffered the same damaging headlines or the management shakeups that its larger competitors have endured in recent months and years. And its executives are waiting for advisors from those large firms who are getting fed up and want to make a change.
Last week, Zank said, a neighbor of his who works as a big producer for UBS, drove up in his car as the UBS rogue trader scandal was raging in the media. The producer joked: “Hey Dennis, you guys at Raymond James interested in buying an investment bank?” To which Zank retorted: “You know, we’re kind of waiting for the stock price to get into the single digits.”
The story was met with laughter but it also speaks to what’s happening in the brokerage industry -- change and growth. It is change at the highest levels of management within the firms; change in the regulatory environment; change in the demographics of the advisor market and of course, change in the global markets.
However, growth -- the kind measured in revenue and profits -- is the ultimate goal. How to reach those goals in growth while dealing with all this change is what firms like Raymond James and its competitors are all staring in the face.
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Frances McMorris was named editor-in-chief of ON WALL STREET in February 2008, after serving as executive editor since December 2004. She also created and serves as the host of AdvisorTV, an online video interview show appearing at onwallstreet.com.
From indictments to verdicts and appeals, Ms. McMorris has covered many major, high-profile cases in both federal and state courts as a legal affairs reporter for The Wall Street Journal, The New York Daily News, Newsday and The New York Law Journal. The cases that she has covered include: the seditious conspiracy trial of Sheik Oman Abdel Rahman, the blind Egyptian cleric convicted of being the spiritual mastermind of the 1993 World Trade Center; the constitutional battle over the “Don’t Ask, Don’t Tell” military policy; the Crown Heights riot murder trial; federal racketeering cases against violent gangs; the Long Island pet cemetery trial and several securities fraud and insider trading cases, among others.
The legal issues she has written about are diverse and numerous, ranging from economic espionage to employment discrimination rulings and the first story to report that there is no expectation of privacy for employee emails written in the workplace.
Ms. McMorris is a 1993 graduate of Fordham University School of Law and admitted to the New York and New Jersey bars. She has appeared on the former CNNfn to give expert commentary on trials.
She also served as president of the Newswomen’s Club of New York for three years while working as an assistant managing editor at The Daily Deal in New York.
ON WALL STREET magazine has a circulation of more than 90,000—reaching financial advisors and brokers at the most prestigious brokerage firms who serve high-net-worth and ultra-high-net-worth investors.
FEED
Frances McMorris was named editor-in-chief of ON WALL STREET in February 2008, after serving as executive editor since December 2004. She also created and serves as the host of AdvisorTV, an online video interview show appearing at onwallstreet.com. 
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