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Emboldened by bigger brand and capital, Raymond James goes hunting for the wealthy

At last week's company conference in Washington, CEO Paul Reilly outlined an aggressive growth strategy to push his firm into the West and Northeast, especially into some of the country's wealthiest (and most competitive) states, including California, Washington and New York.

Courtesy of Raymond James Financial

At last week's company conference in Washington, CEO Paul Reilly outlined an aggressive growth strategy to push his firm into the West and Northeast, especially into some of the country's wealthiest (and most competitive) states, including California, Washington and New York.

Is Raymond James Financial about to make the next big leap?

While the regional investment and brokerage firm operates quietly and efficiently from its headquarters complex in St. Petersburg, CEO Paul Reilly is sending a louder, bolder message at industry meetings.

It's not as if Reilly's at the podium shouting the "I love the smell of napalm in the morning" line from the movie Apocalypse Now as Wagner's Ride of the Valkyries thunders over the speakers.

But in the button-down investment world, Reilly comes pretty close.

At last week's company conference in Washington, Reilly outlined an aggressive growth strategy to push his firm into the West and Northeast, especially into some of the country's wealthiest (and most competitive) states, including California, Washington and New York.

Raymond James once lacked the brand name and capital to compete in the Northeast, Reilly said. Not anymore. "We have a ton of capital. There's no reason not to leverage it."

Reilly's comments were reported by the financial publications Investment News and Financial Planning.

We've already seen signs of this buildup of muscle and ambition. Last week, this column gave Raymond James an "A" grade for overall performance and growth — the only "A" given out to 24 area public companies. Based on its $7 billion market value, Raymond James is breaking away from the pack of other large publicly traded corporations here like TECO and Jabil, all clustered below $4 billion. In head count, Raymond James already is approaching the size of UBS Wealth Management Americas.

Two events in particular helped propel Raymond James.

First, the successful merger by Raymond James of brokerage Morgan Keegan became its largest acquisition ever. The second is the emergence of Reilly, handpicked in 2009 to succeed longtime Raymond James CEO Tom James.

Reilly now has the track record to start pushing Raymond James' expansion.

Yet his era as CEO has not been without controversy.

In 2009-10, a class-action lawsuit accused Raymond James of misleading clients into believing that auction-rate securities were as safe as cash. Most of that suit was dismissed, but the firm in 2011 agreed to pay $300 million to settle related charges.

Recently, Reilly endorsed hiking brokerage fees due out this year. Investment News reports the touchy topic was raised last week in a closed-door meeting with Raymond James advisers. When a consulting firm helped the firm rethink its fees, it was discovered that larger accounts support smaller, less profitable clients with $100,000 or less.

Instead of raising account minimums, Raymond James decided to do away with the fee waivers on small accounts.

That will rile investors with modest accounts, though Reilly said that the increases still kept the firm's fees below industry averages.

That should help when Raymond James pushes deeper into big bucks states.

Robert Trigaux can be reached at rtrigaux@tampabay.com.

Emboldened by bigger brand and capital, Raymond James goes hunting for the wealthy 05/26/14 [Last modified: Monday, May 26, 2014 9:45pm]
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