Raymond James Financial's advisory operations reported strong year-over-year earnings growth for the first quarter of its fiscal year 2015, but profits slipped from the prior period.
The St. Petersburg, Fla.-based firm announced Wednesday that its Private Client Group profits soared 30% year-over-year, rising to $92.7 million from $71.5 million for the year-ago period. But profits fell from $100 million in the fourth quarter -- a 7% drop.
The unit's total quarterly revenues showed a similar pattern, growing 8% year-over-year to $849 million from $782 million in the same period a year ago -- but down 2% compared with the prior quarter's total revenues of $866 million.
The firm attributed the quarter-to-quarter decline in part to a one-time mutual fund commission adjustment, saying in a statement that securities commissions and fees were down 3% from the preceding quarter.
The quarterly pullback mirrors recent slowdowns among other wirehouse operations.
Bank of America's wealth management division, which includes Merrill Lynch, recently reported that profits dropped 9.2% year-over-year, falling to $706 million for the fourth quarter from $778 million for the year-ago period. Morgan Stanley, which reported earnings earlier this week, said that wealth management profits rose to $1 billion from $84 million for the year-ago period, but fell from $1.6 billion in the prior quarter.
At Raymond James, an aggressive recruiting push paid off as the advisor ranks continued to expand across both channels. Headcount was up by 71 advisors from the previous quarter and up by 158 advisors compared with the prior year.
The firm's employee broker-dealer, Raymond James & Associates, has been growing its presence on the West Coast and in the Northeast. In December, the firm recruited a $900 million team from J.P. Morgan to open a new office in Manhattan.
Raymond James has also been recruiting branch managers from rivals to oversee new offices and to aid in recruiting efforts. In November, the firm recruited Morgan Stanley branch manager Michael Schipper to oversee its San Francisco office. The following month, Raymond James lured away Aaron Tellez from Ameriprise to oversee a new office due to open in Irvine, Calif.
"We are very pleased with the net addition of financial advisors during the quarter, which is a testament to our firms ability to attract and retain advisors in all of our affiliation platforms," said the firm's CEO Paul Reilly, in a statement.
The Private Client Group's total client assets grew to $459.1 billion from $422.9 billion for the year-ago period, an 8.5% increase -- although, again, only a modest 1.8% growth over the prior quarter.
Fee-based assets increased at a quicker pace, rising 3.6% to $173.9 billion from $167.7 billion for the prior quarter, and up from $151.2 billion for the year-ago period.
Beyond the wealth management operations, the company said overall profits dropped to $126 million from $136 million in the prior quarter, a 7% decline -- although, again, an increase from $116 million the prior year, and above analysts' estimates of $124 million, according to Bloomberg data.
Total revenue fell 2% from the prior quarterly, sliding to $1.28 billion from $1.3 billion, but up 6% year-over-year. Analysts had estimated revenues at $1.26 billion.
"Despite a challenging market environment for our Capital Markets segment, we generated satisfactory financial results this quarter," said Reilly. "More importantly, we continued to deliver on our long-term growth objectives, adding 71 financial advisors ... while also achieving new quarterly records for client assets under administration, financial assets under management, and net loans."
Earnings-per-share rose to $0.89 per share from $0.83 per share for the year-ago period.
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