Raymond James CEO discusses Q2 earnings, path to record client assets

[Music] Raymond James reporting record client assets and assets under management overall in the second quarter here to talk about the report and what's driving the increase is CEO of Raymond James Paul Riley Paul it's great to see you as always um you guys did grow assets to that record the growth however in net new assets did slow to some extent can you talk to me about some of the Dynamics that were at play in the quarter yeah so there a lot happening in the quarter if you look at you know the last three years in a row now we've had record revenue and profits and assets for the first six months including this quarter we have record Revenue profits and assets so we've had great growth and this quarter is a little bit slower seasonally a little bit slower there's always in and outs but the truth is where we stand right now we're on a pace for record recruiting uh of advisers uh we have record size of advisors we you know few years ago we didn't see5 and10 million kind of advisor teams we're seeing 20 30 and $40 million teams now talking about joining us so you know so it's a quarter and a long run series of very very good quarters we've always been really right at the top of net new assets we're more in the pack this quarter so but I you know longer term middle term I think we're in really really good shape so stock was adjusting probably to that net new asset number and let it we're happy to be judged on what we produce in the next few quarters well Paul let me ask you given your position in the retail brokerage industry what kind of Trends are you seeing we've seen an incredible shift in uh Trader investor Behavior over the pandemic since then uh just what kind of Trends are you seeing Jared we've seen you know all sorts of Trends in that period since the pandemic and you know the probably the biggest movement was when cash was free people had a lot of cash uninvested and today they're getting a good return on that cash whether they're into money markets fixed income rates or into uh deposit programs that pay high yields so that's good news for investors that's available we've also seen you know pretty good for a while it was fixed income Investments but with the growth in the market uh total position the portfolios and equities is actually up so it's been a good time you know for investors that have been in the markets they've done pretty well and of course there's always a fear of what happens next uh but investors have looked at you know probably bigger penetration into alts products we're pretty conservative on what we allow on the alts platform but certainly a pickup on that side trying to hedge you know potential downturns uh in the equity markets but pretty well they're staying invested with their advisors and I remember just a year or two ago where a lot of uh investors of Private Client uh clients wanted to get out of the market and stayed it and it's paid off well for them to get really the benefit of this rally and so Paul you know even more recently as we've seen some more cracks in the market when could argue or at least a short downturn in the market how would you describe investor sentiment particularly in that private client group which is you know higher net worth individuals and you can see the reaction J even ours we had one number that was off you know the Market's sensitive right now and you're seeing that really kind of in all stocks even on hits on quarters just a little bit of something going on you see adjustments so investors a little more skittish um you know we still have 70% confident in the economy down I saw the latest survey over half were con you know constructive on the markets so that shows the split nature and personality but the good news for us we're steady at 95% of people think their advisers are doing a great job for us so uh but investors I think like institutional investors as you see small movements or or data points really have big reactions in the market I think people are a little skittish because it's been a long up Market since you know really 2010 as we've you know had pretty long recovery here and I think people have been nervous Paul um since we spoke last the news was announced that uh you have named a successor the CFO of the bank Paul shree um who's going to take over sometime next year and I'm sure we're going to talk again before that happens but in the meantime I am curious sort of what you want I mean you've been CEO there since 2009 so I'm curious what your you feel you want your legacy to be at Raymond James what do you think is sort of the biggest imprint that you've made on the organization well I tell people I only take credit for two things is our a big increase in technology which is paid off really in making I think the best platform for wealth advisers anywhere and the second is I haven't messed up the culture yet we've had you know 63 years of this tremendous culture really started by Bob James and institutionalized by Tom James and through my whole stay culture's been number one it's a very family feel firm even for a big firm everybody's a firstname basis advisers aren't afraid to reach out directly to me or anyone else here and that was also critical as we picked my successor we had four great candidates all very capable and we went through a multi-year process and the question wasn't if those people couldn't be CEOs who who was best for the firm at this time and with the mounting regulatory pressures and capital pressures uh regulation in general um we felt that Paul was best equipped um the good news is all four have worked together for 15 years they were all in the process and they've all committed to stay together for the next 15 years so I look at the transition of Tom James a point pointing me uh and I felt my mission was to take it from the founder to the next successor and I'm very confident not just in Paul but the whole team that will be with him to continue the trajectory I'm sure he'll do some things different but the culture is sacran I know it'll continue to have this great advisor Centric client Centric firm that we've always been and he's been a big part of things we've done whether it's our success on the sweeps during you know last March when there were runs on Banks and we created deposits uh through our Capital programming even though analysts say we have too much Capital we still um have really top of top Roes in the market and we have three a ratings a level ratings in the rating agencies and for a firm our size and that and our industry is unusual unique I would say and Paul's been a part of that as the whole team so to me it's just it's been a gradual passing over and technically next year he'll be the CEO and the good news is I'll be able to blame him when there's problems instead of him blaming me so well I'll tell you what quick quick note on culture here culture eats strategy for breakfast so says Peter Ducker famous quote there I'm a Believer as well so thank you for joining us here today congratulations congratulations on your quarter Raymond James CEO Paul Riley thank you Jared and Joe

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Length: 7min 27sec (447 seconds)

Published: Fri Apr 26 2024