RBC trumpets recruiting wins, wealth exec to step down

As RBC announced that its U.S. wealth president would step down next year, executives separately revealed that the U.S. unit had added 90 “experienced” advisors in the firm’s latest fiscal year.

Discussing Royal Bank of Canada’s fourth-quarter earnings Wednesday, CEO David McKay said roughly 80% of the 90 new hires each had $2 million Canadian dollars or more in annual revenue production.

“We will continue hiring over the medium term,” McKay said, referencing commitments RBC had made at an Investor Day event the firm held in March this year. McKay and other executives had then announced plans to hire more than 600 advisors in the U.S. over the next five years, according to a slide presentation from the event.

U.S. wealth president stepping down

Meanwhile, RBC announced in a memo circulated to employees Wednesday that U.S. wealth president Tom Sagissor will be stepping down in January and taking on the title of vice chair. His current role in leading the firm’s private client group will be taken over by two other executives: Pat Vaughan, east divisional director, and Wally Chapman, central divisional director.

Sagissor has been at RBC for nearly 30 years. He started his career at Dain Rauscher in 1994, a firm RBC bought in 2001.

In the memo annoucing the reorganizaton, RBC U.S. wealth CEO Michael Armstrong praised Sagissor for shaping “our shared vision and the culture that sets us apart from our peers.”

“This transition is a natural evolution of our leadership structure and positions us well for the future,” Armstrong wrote.

Advisor headcount and big recruiting deals

RBC reported on Wednesday that its firm-wide advisor headcount had risen by 113 to a total of 6,229 in its latest fiscal year, which ran from Nov. 1, 2024, to Oct. 31. RBC reported earlier this year that it had roughly 2,200 advisors in its U.S. wealth management unit, but did not provide an up-to-date figure Wednesday.

Many of the firm’s recruiting wins over the past year have been notable, including some large teams pulled from UBS. They include:

Bringing RBC’s bank to its wealth clients

McKay said Wednesday that another leg of RBC’s plans for its U.S. wealth management business will rest on banking offerings. 

“By the end of fiscal 2026, we will be launching enhanced credit card and mortgage capabilities as we continue to grow security based and tailored lending,” McKay said.

Many firms with large banking divisions try to make the most of that connection by offering loans, mortgages and other bank products to wealth management clients. At their Investor Day, RBC executives announced a goal of doubling by 2029 the number of U.S. ultrahigh net worth client households that also do banking with the firm, though the executives did not specify how many do now.

Revenue, assets and profits

McKay’s remarks about RBC’s recruiting successes and plans for the future came on top of another strong year and quarter for the firm’s U.S. wealth management business. The unit generated $1.85 billion in revenue in the fourth quarter (up 8% year over year) and $7 billion for the year (up 7%). RBC attributed the fourth-quarter increase largely to “higher fee-based client assets reflecting market appreciation and net new assets.”

The U.S. wealth unit brought in nearly $5.8 billion in new assets in the fourth quarter (reported as CA$8.1 billion). That helped push the U.S. division’s tally for assets under administration up to $758.6 billion by the end of the fiscal year, a figure up 14% year over year.

For all of its wealth units, including those in Canada and Europe, RBC reported its revenue also rose by 14% year over year to CA$5.9 billion. That was on nearly CA$2.3 trillion in assets under administration (up 15% year over year) and CA$1.6 trillion in assets under management (up 17%).

The wealth units reported their net income rose by 33% year over year to CA$1.3 billion in the fourth quarter. That growth came despite their expenses being up 8% year over year, owing partly to “higher variable compensation” and “staffing costs.”