January 22, 2015 / 7:07 PM / 3 years ago

Raymond James' recruiting bump will boost next quarter -executive

NEW YORK, Jan 22 (Reuters) - Independent broker-dealer Raymond James Financial Inc's recruiting drive has paid off, landing 71 net new advisers, as it sets the stage for a bounce in the second quarter, according to Raymond James Chief Executive Officer Paul Reilly.

"Recruiting remains robust ... so we should have a tailwind in that area," Reilly said on Thursday during the firm's quarterly earnings call.

He added that many of the teams being recruited have higher productivity than those Raymond James saw in the past, although it might take time before these assets paid off.

For example, over a six-week-stretch last quarter, three broker teams were recruited that had each produced $5 million in fees and revenues during their last year at previous firms.

Reilly said that, when a broker joins Raymond James, he expects at least 70 percent of that broker's assets under management to come over within a year, with most of the remainder following shortly thereafter.

Independent broker-dealers offer advisers varying levels of ownership over their business.

On Wednesday, the St. Petersburg, Florida-based company reported net income of $126.3 million, or 87 cents per share, for the quarter ended Dec. 31. That was down from $136.4 million, or 94 cents per diluted share, for the fiscal fourth quarter ended Sept. 30.

Commissions and fees from the firm's Private Client Group, which includes the broker-dealer and independent advisor business, slipped nearly 3 percent from the previous quarter, despite a 4 percent rise in the assets of fee-based accounts.

The firm said the loss was caused by a one-time $10.5 million mutual fund commission adjustment, and that assets under management and fees would grow as new advisers came on.

Analysts were reassured by the recruiting numbers.

"(We) suspect the underlying trajectory of (Private Client Group) commissions and fees is much stronger than the reported level in the quarter," said JMP Securities senior research analyst Devin Ryan.

He added that this should bode well for the next quarter's earnings. (Reporting By Elizabeth Dilts. Editing by Andre Grenon)

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