Raymond James' challenge: Get bigger without being branded a Wall Street giant

As St. Petersburg-based financial adviser Raymond James grows, it strives to be seen as a sensible firm, not a Wall Street giant. [DAVID W DOONAN   |   Special to Times]
As St. Petersburg-based financial adviser Raymond James grows, it strives to be seen as a sensible firm, not a Wall Street giant. [DAVID W DOONAN | Special to Times]
Published Dec. 15, 2015

Raymond James Financial has long built its reputation as an alternative to the giant Wall Street banks, suggesting its St. Petersburg headquarters far from Manhattan and its client-focused culture insulated it from the historic aura of "greedy" New York investment firms that even now are a target of the presidential campaigns.

But now, Raymond James finds its rapid growth by acquisitions and aggressive recruiting of financial advisers is not only swelling its financial success — witness the record revenue numbers company CEO Paul Reilly touted to analysts Thursday morning — but also starting to make Raymond James, in some ways, approach the size of some of the investment banking giants.

The momentum began under Reilly, who helped orchestrate Raymond James' successful acquisition several years ago of the regional Morgan Keegan investment banking firm from owner Regions Bank. Since then, Raymond James has aggressively sought to grow more by recruiting financial advisers with a strong base of client assets. This fiscal year alone, the firm added 331 financial advisers from other investment houses to bring Raymond James' tally to 6,596 by the end of September.

"Adviser account growth is a driver of your business," Reilly told analysts. "Strong recruiting allows us to grow."

And indeed, Raymond James is growing, even though the most recent quarter's pullback in the stock markets slowed all investment firms' momentum a bit. Raymond James is now being compared by a number of financial advisers with the likes of UBS, and Reilly said the bulk of its recruited advisers are coming from the big national firms, known in the industry as "wirehouses." In the spring of 2014, a financial publication, Investment News, ran this headline: "Raymond James approaching wirehouse territory" in size — if not temperament.

Anyone who watches much TV has probably seen the recent marketing push by Raymond James to reinforce its distant roots from Wall Street city slickers. Its advertising agency, Minneapolis-based Martin Williams, explains on its website how it is trying to position its client.

"For over 50 years, Raymond James has been the sensible sedan in a red Ferrari world of investment firms. Their steadfast nature and deliberate approach to financial planning continue to put them — and their clients — in a position of financial strength," the ad agency states. "So when we re-launched the brand, we took the opportunity to celebrate their pragmatic manner with a refreshingly wry sense of humor."

The ads, some may recall, build on Raymond James' "Life well planned" slogan. They feature the hatmaker who stuck to his proven styles and was not swayed by the latest flashy (and soon rejected) looks, or the "fastidious librarian" who prepared well for retirement and, living well past 100, managed to enjoy life to the fullest. They are clever ads and seem well focused in emphasizing the message that "sensible sedans" like Raymond James can deliver better long-term value than red sports cars.

Will it work for Raymond James? All investment firms look successful when stock markets prosper and clients are happy. Reilly seems in touch with the need to balance growth with attention to customers, but inevitably, the rapid import of new advisers — most from the big investment brokerages — will make it a tougher challenge for Raymond James to maintain its culture.

So far, so good.

Contact Robert Trigaux at Follow @venturetampabay.