Raymond James reports recruiting costs for first time

Raymond James reported Wednesday that it spent just over $390 million in 2025 on recruiting and retaining advisors — the first time it has published such a figure.

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Paul Shoukry, CEO of the St. Petersburg, Florida-based broker-dealer, said the firm used that money to bring in advisors producing about $460 million annually at their previous firms. He likes the math.

“That’s equivalent to a pretty decent-sized acquisition in our space, especially when you look at what is remaining out there,” Shoukry told analysts in an earnings call. “And we’d much rather recruit one by one, where we know the advisors are a good cultural fit, and 100% of what we pay in transition assistance is going to retention versus the seller.”

Shoukry said the results of such expenditures could be seen in the results for its latest quarter, which it calls its first quarter. Raymond James’ wealth management division, officially named the Private Client Group, set records for net revenue and assets under administration and a near-record for net new assets.

Raymond James recruiting from Commonwealth, other firms

That was achieved against a backdrop of increased expenditures to recruit advisors from industry rivals and prevent in-house advisors from going elsewhere. In its first quarter alone, spending on recruitment and retention was up 22% year over year to $107 million.

“These costs have increased as a direct result of our strong recruiting successes and reflect a component of the execution of our highest capital deployment priority of investing in organic growth,” Chief Financial Officer Butch Oorlog told analysts on a call Wednesday.

Raymond James has done particularly well in the past year pulling advisors from Commonwealth Financial Network amid its purchase by the much-larger LPL Financial. Industry recruiters have said Raymond James owes a substantial part of this success to its decision to increase the amounts on offer to advisors in its recruiting deals.

Many firms have looked at LPL’s acquisition of Commonwealth, a deal that closed in August, as an opportunity to go on a recruiting spree. But Shoukry declined to say Wednesday that Raymond James’ successes have come at any particular firm’s expense or were the result of any particular acquisition deal. 

“We have a lot of friendly competitors, and they’re doing good jobs keeping the advisors through those transactions,” he said. “So what I would speak to is just the broad-based strength. It’s not one firm that we’re seeing success from. There’s a lot of different firms. Advisors are coming from wires, regionals, other independents.”

Raymond James has ceased providing quarterly updates on its advisor headcount but reported in October that the tally had reached a record at 8,943. Its spending on advisor compensation rose by 15% year over year in its first quarter to just over $1.6 billion.

Raymond James seeks to provide a harbor in the private-equity storm

Shoukry also returned to one of his favorite topics: skepticism about large private equity-backed wealth managers and how much they’re willing to pay to acquire smaller firms and recruit advisors. Shoukry said he thinks this year is “going to be really important” for aggregator-type firms drawing on private capital to finance purchases of registered investment advisors.

Many of these PE-backed acquirers, Shoukry suggested, have not been able to recoup the returns on their investment they originally hoped for. 

“And a lot more will come out, I think, in the next year or two,” he said. “And that will dictate whether or not they can still afford to pay what they have been paying, which has actually been increasing over the last couple of years.”

Like executives at many firms that don’t rely on private equity, Shoukry portrayed Raymond James as a haven for advisors seeking stability. Critics of PE firms often paint them as “company flippers” focused on reducing costs at the companies they take over and selling them for a profit as quickly as possible.

“We’re looking for advisors who are really looking for a platform and a home for them, their teams and their clients where they’re not going to have to have another disruption in three to five years,” Shoukry said.

“They’re looking at our balance sheet to see how much tangible equity we have, how much leverage we have, how much cash flow we have in capital, because they want a platform and a home that can remain independent,” he added. “And we’re absolutely committed to remaining independent because, again, they don’t want to have to make a change again in three to five years.”

Record revenue and AUA, near-record net new assets

Shoukry’s remarks came on a day that saw Raymond James report record highs for revenue and assets under administration in its Private Client Group as well as the second-highest figure it has logged for net new assets. The Private Client Group’s net revenue rose by 9% year over year in the firm’s first quarter to $2.77 billion.

That came on $1.71 trillion in client assets under administration, a figure up 15% year over year. Buoying that total was $30.8 billion in net new assets. That figure more than doubled the total for the same period a year ago and was the second highest ever recorded by Raymond James, Shoukry said.

Net new assets are often viewed as a key gauge of wealth managers’ success, since they take into account only money brought in from new or existing clients rather than market returns. Shourky told analysts that such “organic growth” remains Raymond James’ No. 1 priority “in terms of capital deployment.”

“So we’ll continue to invest in that organic growth,” he said. “We are confident that generates the best long-term returns for our shareholders, and then growing the top line gives more opportunities for everyone and allows us to reinvest in the platform overall.”

Of the Private Client Group’s $1.71 trillion in assets under administration, $1.04 trillion were in fee-generating accounts, a figure up 19% year over year. Assets in fee-based accounts are particularly prized for their ability to yield steady streams of income.

The Private Client Group’s asset-management and related administrative fees rose by 15% year over year in the firm’s first quarter to $1.69 billion. Raymond James said the increase was “mainly due to market appreciation and net inflows into [Private Client Group] fee-based accounts.”

Shoukry said Raymond James has “consistently been a leading destination for financial advisors” and predicted the firm will prove equally adept at retaining advisors even amid rich recruiting offers now peddled by PE-backed acquirers.

“Yes, there are more competitive pressures now with private equity backed roll-ups and that sort of thing,” Shoukry said. “But really retention of our existing advisors, the advisor satisfaction is the highest it’s been since, I think, 2014 and really having a platform where advisors feel like there’s a culture that really respects the independents and … the book ownership they have of their clients.”