Regional BDs have been on a recruiting roll, and Raymond James may be the leader of this fast-growing pack.
Raymond James' brokerage ranks swelled during the recent quarter, rising to a record 7,719 independent and employee advisors, a net increase of 434 from the year-ago period and 115 from March 2018.
The firm's ongoing recruiting success may allay some industry insiders' worries that the departure of Morgan Stanley and UBS from the Broker Protocol would grind advisor moves to an industrywide halt. The protocol, an industrywide agreement that permits advisors switching firms to take basic client contact information with them, has been in effect since 2004.
Tash Elwyn, CEO of Raymond James & Associates, recently called on the industry to create a new version of the protocol in a bid to protect what he sees as advisor's right to affiliate with the firm of their choice.
In the meantime, Raymond James has continued to pursue an aggressive hiring strategy.
"On protocol, we've seen a slowdown from those firms [that left] but our overall recruiting is still strong. As long as advisors do it properly, the transitions are happening," CEO Paul Reilly told analysts during an earnings call Thursday morning.
Of course, Raymond James is not the only regional BD benefiting from a movement of wirehouse advisors to other channels. RBC has hired 73 advisors year-to-date, according to a spokeswoman. And Janney is also on a recruiting tear, bringing in more than 30 advisors overseeing about $4 billion in assets so far this year, the company said. Advisors leaving the wirehouse channel often they say are attracted to these other firms for their better corporate cultures and less bureaucracy.
"Overall, we are just in a good market environment," Reilly said. "Many of the other regional firms are doing well, too. We're at the right time, in the right market."
Many of the regionals have also benefited from advisor attrition at Wells Fargo, which recently reported that its advisor ranks shrank by 173 to land at 14,226 advisors for the second quarter. That figure was down 301 from the year-ago period, according to the bank.
According to hiring announcements data analyzed by On Wall Street, of the 133 wirehouse advisors who jumped to smaller regional firms in the first six months of the year, about 60% came from Wells Fargo alone.
Reilly said that last month was a particularly strong month for Raymond James's recruiting efforts.
"June has traditionally been our largest quarter and that makes sense. After bonuses are paid, people tend to plan their moves to other firms," he said.
However, Raymond James may have to wait before reaping the full benefits of its efforts.
"It can take time to transfer accounts," Reilly said. "But our experience is that after the first year, [the new advisors] tend to grow past where they were. Some of that is new business, some is accounts transferring."
For the recent quarter, the firm's wealth management unit reported pretax income rose 3% year-over-year to $132.3 million. Client assets under administration grew 14% to $719.5 billion. The unit's fee-based assets grew at a faster clip, jumping 24% to $343.1 billion.
Of the firm's two advisor channels, the independent group remains the larger at 4,593 to the employee group's 3,126 brokers.