What's driving adviser productivity at Raymond James?
Quality, not quantity. That's what matters to the executives running Raymond James' Financial Institutions Division.
With only 735 advisers, it lags rival LPL Financial, which employs more than three times as many advisers, and Cetera Investment Services, which employs 861.
Yet its relatively modest-sized army of advisers is more productive than any of its competitors, according to data in the latest edition of Kehrer Bielan's TPM report. In 2015, the average bank and credit union adviser in the Raymond James network produced $387,755, surpassing LPL's adviser production by more than $118,000 and that of Cetera's by more than $56,000.
The firm also pummeled all but one competitor on another important measure of productivity. The average Raymond James adviser had $59 million in assets under management, beating both LPL and Cetera advisers, which had under $40 million each. The average across all TPMs was $38 million. (Invest Financial was the outlier with advisers managing an average of $83 million.)
Training and coaching
The secret behind the firm's enviably productive adviser force? Part of it is tied to training, say Raymond James executives.
"We have a series of workshops and different exercises that we take them through to help make them more efficient and grow more rapidly," says Tim Killgoar, director of Strategy and Consulting for the Financial Institutions Division of Raymond James.
Apart from running large conferences, the firm offers advisers both one-on-one and group coaching and makes available to them a "comprehensive set of practice management and intelligent tools," adds Jamie Kosharek, director of Sales and Administration for the Financial Institutions Division.
The practice of segmenting clients is also a big contributor to adviser productivity, they say. "As we work with our specific financial institutions, we will have done a deep-dive into client segmentation within their book of business," notes Kosharek, adding that such an exercise helps identify opportunities with "A, B, C and D clients."
The firm, for example, has worked with several financial institutions in developing mass-affluent strategies, which have proven to be very successful in identifying and bringing over new assets, Kosharek says. The mass-affluent strategies involved pairing bankers with advisers and having them work together to win business from clients who didn't have an investment relationship with their banks.
The high level of productivity also has to do with working closely with the executive teams and program managers of partner banks and credit unions. "It's really working hand-in-hand with the executives to help them achieve their goals," Killgoar says.
Recruit top talent
Of course, it helps that Raymond James has made it a point to recruit top talent right from the start, hiring primarily from the wirehouses. Of the 80 net new advisers it recruited last year, 65% came from a wirehouse or a regional firm, according to Kosharek.
Advisers from the wirehouses are valued for the training they received at their prior institutions, not to mention the clients and the sizable books of business they bring over. Wirehouse advisers are also more attuned to recurring revenue and advisory business, which help drive productivity.
"We're more focused on the quality of the financial adviser, not the quantity," says Kosharek, explaining that the firm is looking to attract "wirehouse-type advisers" who are looking for a better cultural fit.
Last but not least, the firm's technology has contributed significantly to adviser productivity, say Killgoar and Kosharek. The firm rolled out "some good new pieces of technology," which helped advisers increase their efficiency with their customers and boost revenue, they claim.
In particular, the firm launched a suite of client reporting and external account aggregation tools, which Kosharek said added to the firm's growth and success in 2015.
Killgoar declined to say whether the firm has plans to implement an automated investment services platform as part of its technology initiatives. However, he indicated that the firm was committed to "providing capabilities to advisers to support them in serving their clients."
Won't be left behind
"We're not going to be left behind in terms of supporting advisers or delivering turnkey services," he says. "We continue to invest in adviser-facing technology but I think over time the capability is going to be there to potentially extend that to the end client as needed."
While the firm isn't putting a stake in the ground, it is clearly considering it. "Technology is such a huge factor in this industry. We'd be foolish not to be thinking about it and studying it," Killgoar says.
The firm was equally reticent about the Labor Department's fiduciary rule, saying only that it is examining the rule and working on implementation plans. It declined to comment on how the rule might impact adviser productivity and the business in general.
"The elephant in the room is the DoL. It's certainly going to be something that we'll all be facing across the industry," says Kosharek.
Killgoar anticipated strong regulatory headwinds into the foreseeable future as a result of the new rule. "We view the DoL as the biggest regulatory change probably since the 70s," he says. "It's getting a lot of focus, a lot of investment. We're going to do the right thing by clients and advisers."