Raymond James Financial Q1 2026 Raymond James Financial Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q1 2026 Raymond James Financial Inc Earnings Call
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So first quarter 2026 earnings call. This call is being recorded and will be available for replay for 30 days on the Companys Investor Relations website I'm Christy was senior Vice President of Investor Relations. Thank you for joining us.
Following the prepared remarks, the operator will open the line for questions.
Calling your attention to slide 2. Please note that certain statements May during this call May constitute forward-looking statements.
Kristie Waugh: Good evening, and welcome to Raymond James Financial's Fiscal First Quarter 2026 earnings call. This call is being recorded and will be available for replay for 30 days on the company's investor relations website. I'm Kristie Waugh, Senior Vice President of Investor Relations. Thank you for joining us. With me on the call today are Chief Executive Officer, Paul Shoukry, and Chief Financial Officer, Butch Oorlog. The presentation being reviewed today is available on our investor relations website. Following the prepared remarks, the operator will open the line for questions. Calling your attention to slide 2. Please note that certain statements made during this call may constitute forward-looking statements.
Kristie Waugh: Good evening, and welcome to Raymond James Financial's Fiscal First Quarter 2026 earnings call. This call is being recorded and will be available for replay for 30 days on the company's investor relations website. I'm Kristie Waugh, Senior Vice President of Investor Relations. Thank you for joining us. With me on the call today are Chief Executive Officer, Paul Shoukry, and Chief Financial Officer, Butch Oorlog. The presentation being reviewed today is available on our investor relations website. Following the prepared remarks, the operator will open the line for questions. Calling your attention to slide 2. Please note that certain statements made during this call may constitute forward-looking statements.
With me on the call today are Chief Executive Officer, Paul Sugary, and Chief Financial Officer, Butch or along the presentation being reviewed today is available on our Investor Relations website.
Speaker #1: I'm Kristy Waugh, Senior Vice President of Investor Relations. Thank you for joining us. With me on the call today are Chief Executive Officer Paul Shoukry and Chief Financial Officer Butch Orlog.
Paul M. Shoukry: Yeah. I mean, the comp ratio target that we laid out in the last St. Louis Investor Day was 65% or better. And really, this quarter is impacted by revenue mix. So Private Client Group business with the independent channel, which has a higher payout. Some firms break that out of compensation. We include it in compensation. It drives a higher mix of compensation relative to the Capital Markets business, which for us, largely due to timing, the Investment Banking pipeline, we still feel very good about. But this quarter, it was a weaker quarter. And so due to the revenue mix, also with lower interest short-term rates, when you look at the mixes of revenue, it ended up being slightly above 65%.
Paul M. Shoukry: Yeah. I mean, the comp ratio target that we laid out in the last St. Louis Investor Day was 65% or better. And really, this quarter is impacted by revenue mix. So Private Client Group business with the independent channel, which has a higher payout. Some firms break that out of compensation. We include it in compensation. It drives a higher mix of compensation relative to the Capital Markets business, which for us, largely due to timing, the Investment Banking pipeline, we still feel very good about. But this quarter, it was a weaker quarter. And so due to the revenue mix, also with lower interest short-term rates, when you look at the mixes of revenue, it ended up being slightly above 65%.
Following the prepared remarks, the operator will open the line for questions.
These statements include but are not limited to information concerning future, strategic objectives, business prospects Financial results, industry or market conditions anticipated timing and benefits of our Acquisitions and our level of success in integrating acquired businesses.
Calling your attention to slide two please note that certain statements made during this call may constitute forward looking statements.
Anticipated results of litigation and Regulatory developments and general economic conditions.
Speaker #1: The
These statements include but are not limited to information concerning future strategic objectives business prospects financial results industry or market conditions anticipated timing and benefits of our acquisitions and our level of success in integrating acquired businesses.
in addition, words such as believes expects, anticipates, and tens, plans, estimates
projects, forecasts and future or conditional verbs such as May will, could should and would
Kristie Waugh: These statements include, but are not limited to, information concerning future strategic objectives, business prospects, financial results, industry or market conditions, anticipated timing and benefits of our acquisitions, and our level of success in integrating acquired businesses, anticipated results of litigation and regulatory developments, and general economic conditions. In addition, words such as believes, expects, anticipates, intends, plans, estimates, projects, forecasts, and future or conditional verbs such as may, will, could, should, and would, as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements. Please note that there can be no assurance that actual results will not differ materially from those expressed in these statements. We urge you to consider the risks described in our most recent Form 10-K and subsequent Forms 10-Q and Forms 8-K, which are available on our website.
These statements include, but are not limited to, information concerning future strategic objectives, business prospects, financial results, industry or market conditions, anticipated timing and benefits of our acquisitions, and our level of success in integrating acquired businesses, anticipated results of litigation and regulatory developments, and general economic conditions. In addition, words such as believes, expects, anticipates, intends, plans, estimates, projects, forecasts, and future or conditional verbs such as may, will, could, should, and would, as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements. Please note that there can be no assurance that actual results will not differ materially from those expressed in these statements. We urge you to consider the risks described in our most recent Form 10-K and subsequent Forms 10-Q and Forms 8-K, which are available on our website.
Anticipated results of litigation and regulatory developments and general economic conditions.
As well as any other statement that necessarily depends on future events are intended to identify forward-looking statements.
In addition words such as believes expects anticipates intends plans estimates projects forecasts and future or conditional verbs such as may will could should and would.
Paul M. Shoukry: But really, at 65.4% for the quarter with lower rates and a very tough quarter for capital markets, again, due to timing, we're really pleased with that result.
But really, at 65.4% for the quarter with lower rates and a very tough quarter for capital markets, again, due to timing, we're really pleased with that result.
As well as any other statement that necessarily depends on future events are intended to identify forward looking statements. Please note that there can be no assurance that actual results will not differ materially from those expressed in these statements. We urge you to consider the risks described in our most recent Form 10-K, and subsequent forms 10-Q and forms 8-K.
Please note that there can be no assurance. That actual results will not differ materially from those expressed in these statements. We urge you to consider the risks described in our most recent form 10K in subsequent forms 10, q and forms 8K, which are available on our website. Now, I'm happy to turn the call over to CEO. Paul shukri Paul.
Michael Cho: Great. Thanks, Paul.
Michael Cho: Great. Thanks, Paul.
Thank you, Chrissy. Good evening and thank you for joining us.
Butch Oorlog: The next question will come from Ben Budish from Barclays.
Operator: The next question will come from Ben Budish from Barclays.
Ben Budish: Hi. Good evening, and thank you for taking my question. Maybe just following up on Michael's first question there on NNAs. Really solid quarter. But it does seem like from what we're hearing from competitors, from a lot of the kind of media, the media coverage, that the competitive intensity is picking up quite a bit, whether it's manifesting in more incentives, more aggressive retaining of existing advisors. Just curious, is that something you're seeing? How are you thinking about responding? Is it the sort of environment where this quarter was there anything unusual, or do you think that kind of growth is sustainable over the next, at least, coming quarters? Just be great to get your thoughts there.
Benjamin Budish: Hi. Good evening, and thank you for taking my question. Maybe just following up on Michael's first question there on NNAs. Really solid quarter. But it does seem like from what we're hearing from competitors, from a lot of the kind of media, the media coverage, that the competitive intensity is picking up quite a bit, whether it's manifesting in more incentives, more aggressive retaining of existing advisors. Just curious, is that something you're seeing? How are you thinking about responding? Is it the sort of environment where this quarter was there anything unusual, or do you think that kind of growth is sustainable over the next, at least, coming quarters? Just be great to get your thoughts there.
Before we begin, we recognize a difficult weather. Conditions are impacting many of you in communities across the us. Our thoughts are with everyone affected. And we appreciate the dedication of our teams as they continue to support clients during this time.
Hey, which are available on our website.
Now I'm happy to turn the call over to CEO, Paul Sugary Paul.
Speaker #1: that actual results will not differ materially from those expressed in these statements. We urge you to consider the risk described in our most recent forms 10-Q and forms 8-K, form 10-K and subsequent which are available on our website.
Our focus on being the absolute best firm for financial professionals and their clients has contributed to strong results. This quarter.
Thank you Christy good evening and thank you for joining us before we begin we recognize a difficult weather conditions are impacting many of you in communities across the U S. Our thoughts are with everyone affected and we appreciate the dedication of our teams as they continue to support clients. During this time.
Speaker #1: Now I'm happy to turn the call
Kristie Waugh: Now, I'm happy to turn the call over to CEO, Paul Shoukry. Paul?
Now, I'm happy to turn the call over to CEO, Paul Shoukry. Paul?
Paul Shoukry: ... Thank you, Kristie. Good evening, and thank you for joining us. Before we begin, we recognize that difficult weather conditions are impacting many of you in communities across the US. Our thoughts are with everyone affected, and we appreciate the dedication of our teams as they continue to support clients during this time. Our focus on being the absolute best firm for financial professionals and their clients has contributed to strong results this quarter. The strength and consistency of our client-first culture, alongside a robust technology and products platform, coupled with our strong balance sheet, continues to appeal to financial advisors. This is reflected in our solid recruiting momentum and net new asset annualized growth of 8% this quarter.
Paul Shoukry: ... Thank you, Kristie. Good evening, and thank you for joining us. Before we begin, we recognize that difficult weather conditions are impacting many of you in communities across the US. Our thoughts are with everyone affected, and we appreciate the dedication of our teams as they continue to support clients during this time. Our focus on being the absolute best firm for financial professionals and their clients has contributed to strong results this quarter. The strength and consistency of our client-first culture, alongside a robust technology and products platform, coupled with our strong balance sheet, continues to appeal to financial advisors. This is reflected in our solid recruiting momentum and net new asset annualized growth of 8% this quarter.
Our focus on being the absolute best firm for financial professionals and their clients has contributed to strong results this quarter.
The strength and consistency of our client first culture, alongside a robust technology and products platform coupled with our strong balance sheet continues to appeal to financial advisors. This is reflected in our solid recruiting momentum and net new asset annualized growth of 8% this quarter.
Paul M. Shoukry: Thanks, Ben, and welcome to being one of our covering analysts, I think, just starting this morning. So yeah, I mean, the environment's always competitive. I mean, I think in the last five years, the biggest change has been the entry of these private equity roll-ups. And we've talked a lot, as you know, in the past around that dynamic. I think this is going to be a really important year for those type of firms. A lot of them have sought liquidity events and haven't been able to achieve them at the multiples that I think they were targeting. And a lot more will come out, I think, in the next year or two. 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.
Paul M. Shoukry: Thanks, Ben, and welcome to being one of our covering analysts, I think, just starting this morning. So yeah, I mean, the environment's always competitive. I mean, I think in the last five years, the biggest change has been the entry of these private equity roll-ups. And we've talked a lot, as you know, in the past around that dynamic. I think this is going to be a really important year for those type of firms. A lot of them have sought liquidity events and haven't been able to achieve them at the multiples that I think they were targeting. And a lot more will come out, I think, in the next year or two. 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.
The strength and consistency of our client first culture, alongside our robust technology and products platform, coupled with our strong balance sheet continues to appeal to financial advisors. This is reflected in our solid recruiting momentum and net new asset annualized growth of 8% this quarter we can.
Speaker #2: and we appreciate the dedication of our teams as they continue to support clients during this time. Our focus on being the absolute best firm for financial professionals and
We continue to deploy Capital with a focus on the long term as demonstrated by a robust organic growth. Continued to investments in our technology and platform are consistent deployment through dividends. Our recently, announced Acquisitions as well as share repurchases.
Speaker #2: strong results this quarter. their clients has contributed to The strength and consistency of our client-first culture alongside a robust technology and products platform coupled with our strong balance sheet continues to appeal to financial advisors.
<unk> to deploy capital with a focus on the long term as demonstrated by our robust organic growth continued investments in our technology and platform are consistent deployment through dividends, our recently announced acquisitions as well as share repurchases.
Our sustained growth over time is a testament to the deep personal relationships, our advisors bankers and Associates have with their clients which is a foundation to providing tailored and trusted Financial advice.
Speaker #2: This is reflected in our solid recruiting momentum and net new asset annualized growth of 8% this quarter. We continue to deploy capital with a focus on the long term.
In our recently released annual report, we are referring to this value proposition as the power of personal.
Turning to our financial results for the quarter.
Paul M. Shoukry: But I call that short-term noise, short-term impact. We obviously had to deal with that from a competitive perspective. But the advisors we're recruiting are not looking for a 3 to 5-year destination. They're looking for a much longer 3 to 5-year destination with another liquidity event that's going to cause another source of disruption for them and their clients. We are kind of a long-term stable play for advisors and their clients. 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 3 to 5 years. 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.
But I call that short-term noise, short-term impact. We obviously had to deal with that from a competitive perspective. But the advisors we're recruiting are not looking for a 3 to 5-year destination. They're looking for a much longer 3 to 5-year destination with another liquidity event that's going to cause another source of disruption for them and their clients. We are kind of a long-term stable play for advisors and their clients. 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 3 to 5 years. 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.
Paul Shoukry: We continue to deploy capital with a focus on the long term, as demonstrated by our robust organic growth, continued investments in our technology and platform, our consistent deployment through dividends, our recently announced acquisitions, as well as share repurchases. Great. In the fiscal first quarter, we recruited financial advisors to our domestic independent contractor and employee channels, with trailing twelve-month production totaling $96 million and approximately $13 billion of client assets at their previous firms. A strong result for a quarter that typically experiences a seasonal slowdown. Over the past twelve months, we recruited financial advisors with trailing twelve-month production totaling nearly $460 million and over $63 billion of client assets, including assets recruited into our RIA and custody service division. We recruited total client assets over the past twelve months of more than $69 billion across all of our platforms.
We continue to deploy capital with a focus on the long term, as demonstrated by our robust organic growth, continued investments in our technology and platform, our consistent deployment through dividends, our recently announced acquisitions, as well as share repurchases. Great. In the fiscal first quarter, we recruited financial advisors to our domestic independent contractor and employee channels, with trailing twelve-month production totaling $96 million and approximately $13 billion of client assets at their previous firms. A strong result for a quarter that typically experiences a seasonal slowdown. Over the past twelve months, we recruited financial advisors with trailing twelve-month production totaling nearly $460 million and over $63 billion of client assets, including assets recruited into our RIA and custody service division. We recruited total client assets over the past twelve months of more than $69 billion across all of our platforms.
Our sustained growth over time is a testament to the deep personal relationships, our advisers bankers and associates have with their clients, which is a foundation to providing tailored and trusted financial advice.
Speaker #2: As demonstrated by a robust organic growth, continued investments in our technology and platform, our consistent deployment through dividends, a recently announced acquisitions, as well as share repurchases.
Our ongoing commitment to generating long-term sustainable growth was achieved this quarter as we once again realized record. Quarterly revenues.
In our recently released annual report we are referring to this value proposition is the power of personal.
Quarterly net revenues of 3.7 billion dollars grew 6% over the prior year quarter and were up just above the strong group, preceding quarter.
Turning to our financial results for the quarter.
Our ongoing commitment to generating long term sustainable growth was achieved this quarter as we once again realized record quarterly revenues.
Pre-tax income of 728 million decline, 3% compared to the year ago quarter, but nearly equaled, the preceding quarter level.
Quarterly net revenues of $3.7 billion grew 6% over the prior year quarter and were up just above the strong group preceding quarter.
In the fiscal first quarter, we recruited financial advisors to our domestic independent contractor and employee channels, with trailing 12-month production totaling $96 million and approximately $13 billion of client assets at their previous firms. A strong result for a quarter that typically experiences a seasonal slowdown.
Cross our businesses, underpinned by our uniquely personal approach with, and in support of our advisors and financial professionals, we continue to achieve substantial success retaining and recruiting Financial professionals, who provide high-quality advice to their clients.
Pre tax income of $728 million declined 3% compared to the year ago quarter, but nearly equaled the preceding quarter level.
Paul M. Shoukry: 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. So while the competition has increased in the industry, for us, our differentiation, we feel like we have, in some ways, less competition than ever because we're focused on the long term. We're focused on the power of personal, the personal relationships. And we're able to invest $1 billion in technology. A lot of our competitors who also are focused on personal relationships and have similar cultures, their technology investment, for example, is a fraction of ours. And that's hard to remain competitive when you can't invest in AI and the tools that you need to help advisors develop more efficiency in their businesses with their clients.
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. So while the competition has increased in the industry, for us, our differentiation, we feel like we have, in some ways, less competition than ever because we're focused on the long term. We're focused on the power of personal, the personal relationships. And we're able to invest $1 billion in technology. A lot of our competitors who also are focused on personal relationships and have similar cultures, their technology investment, for example, is a fraction of ours. And that's hard to remain competitive when you can't invest in AI and the tools that you need to help advisors develop more efficiency in their businesses with their clients.
Cross our businesses underpinned by our uniquely personal approach with and in support of our advisors and financial professionals. We continued to achieve substantial success, retaining and recruiting financial professionals, who provide high quality advice to their clients.
In the private client group, we ended the quarter with a record. 1.71 trillion dollars of client assets under Administration representing year-over-year growth of 15%.
Over the past 12 months, we recruited financial advisors for trailing 12-month production totaling nearly $460 million in over $63 billion of client assets, including assets recruited into our RIA and custody service division. We recruited total client assets over the past 12 months of more than $69 billion across all of our platforms.
Paul Shoukry: Our optimism about future growth is fueled by our robust advisor recruiting pipeline and strong levels of commitments to join in the coming quarters. We offer a unique combination of an advisor and client-focused culture, coupled with leading technology and solutions. This value proposition, coupled with our strong balance sheet and commitment to independence, is proving to be a differentiator for advisors evaluating alternatives. In order to continue retaining and attracting the best advisors, we continue making investments in our platform and offerings. For example, our private wealth advisor program and expanded alternative investments platform support advisors who focus on high net worth clients. We continue to make investments and implement solutions to automate and streamline processes that provide advisors with incremental time to invest in their client relationships. Highlighting this is our newly launched proprietary digital AI operations agent named Rai, which builds on our service-focused, long-term AI strategy.
Our optimism about future growth is fueled by our robust advisor recruiting pipeline and strong levels of commitments to join in the coming quarters. We offer a unique combination of an advisor and client-focused culture, coupled with leading technology and solutions. This value proposition, coupled with our strong balance sheet and commitment to independence, is proving to be a differentiator for advisors evaluating alternatives. In order to continue retaining and attracting the best advisors, we continue making investments in our platform and offerings. For example, our private wealth advisor program and expanded alternative investments platform support advisors who focus on high net worth clients. We continue to make investments and implement solutions to automate and streamline processes that provide advisors with incremental time to invest in their client relationships. Highlighting this is our newly launched proprietary digital AI operations agent named Rai, which builds on our service-focused, long-term AI strategy.
We continue to experience strong success in recruiting do a no small part to our unique service first culture, comprehensive capabilities, and strong balance sheet.
In the private client group, we ended the quarter with a record 1.71 trillion of client assets under administration, representing year over year growth of 15%.
Our optimism about future growth is fueled by our robust advisor, recruiting Pipeline, and strong levels of commitments to join in the coming quarters.
Quarterly domestic. Net. New assets worth nearly 31 billion. Representing an 8% annualized growth rate.
We continue to experience strong success in recruiting due in no small part to our unique service first culture comprehensive capabilities and strong balance sheet quarter.
We offer a unique combination of an adviser and client focused culture, coupled with leading technology and solutions, this value proposition coupled with our strong balance sheet and commitment to Independence, is proving to be a differentiator for advisors evaluating alternatives.
Quarterly domestic net new assets were nearly $31 billion representing.
In the fiscal first quarter, we recruited financial advisors to our domestic independent contractor and employee Channels. With trailing 12-month production totaling, 96 million in approximately 13 billion dollars of client assets. At their previous firms. A strong result for a quarter that typically experiences a seasonal Slowdown.
Representing an 8% annualized growth rate.
In order to continue retaining and attracting the best advisors, we continue making investments in our platform and offerings.
Ben Budish: Got it. All very helpful. Maybe for my follow-up, just curious if you could unpack a little bit more the near-term outlook on the capital market side. Sounds like you're still confident on the pipeline. Obviously, the revenues can swing quite a bit from quarter to quarter. So anything you can share from a modeling perspective, how we should think about the very near term? We're about a third of the way through Q1. Anything you can share would be helpful. Thank you very much.
Benjamin Budish: Got it. All very helpful. Maybe for my follow-up, just curious if you could unpack a little bit more the near-term outlook on the capital market side. Sounds like you're still confident on the pipeline. Obviously, the revenues can swing quite a bit from quarter to quarter. So anything you can share from a modeling perspective, how we should think about the very near term? We're about a third of the way through Q1. Anything you can share would be helpful. Thank you very much.
In the fiscal first quarter, we recruited financial adviser to our domestic independent contractor and employee channels with trailing 12 month production totaling $96 million and approximately $13 billion of client assets at their previous firms a strong result for a quarter that typically experiences a seasonal slowdown.
For example, our Private Wealth Advisor program and expanded alternative investments platform supports advisors to focus on high-net-worth clients.
We continue to make investments in Implement solutions to automate and streamline processes that provide advisors with incremental time to invest in their client relationships.
Over the past 12 months, we've recruited financial advisors with trailing 12 month production totaling nearly $460 million and over $63 billion of client assets, including assets recruited into our RIAA and custody service Division, we recruited total client assets over the past 12 months or more than six.
Paul M. Shoukry: The pipeline remains very strong. There's a lot of pent-up demand in terms of buyers and sellers, buyers with capital, dry powder to deploy, and sellers. Again, the majority of our M&A activity is driven by financial sponsors, either on the buy and/or on the sell side. There's a lot of holdings and funds that are well beyond their original holding period. So there's a lot of pent-up demand. We're signing a lot of engagement letters. So we feel good about the demand. But you can never predict timing. We don't try to guess on when they will close or if they will close. The market conditions have to be conducive. There have to be buyers and sellers that meet on price and terms.
Paul M. Shoukry: The pipeline remains very strong. There's a lot of pent-up demand in terms of buyers and sellers, buyers with capital, dry powder to deploy, and sellers. Again, the majority of our M&A activity is driven by financial sponsors, either on the buy and/or on the sell side. There's a lot of holdings and funds that are well beyond their original holding period. So there's a lot of pent-up demand. We're signing a lot of engagement letters. So we feel good about the demand. But you can never predict timing. We don't try to guess on when they will close or if they will close. The market conditions have to be conducive. There have to be buyers and sellers that meet on price and terms.
Our optimism about future growth is fueled by our robust advisor, recruiting Pipeline, and strong levels of commitments to join in the coming quarters.
Paul Shoukry: The firm's suite of AI-based tools and technologies is focused on empowering financial advisors and professionals across the firm by applying artificial intelligence to enhance service models in secure, scalable applications. Capital Markets results declined this quarter, primarily driven by lower M&A and advisory revenues, and also lower debt underwriting and affordable housing investment revenues on a sequential basis. Given the very strong M&A results in both the year-ago and sequential periods, this quarter faced tough comparables. Even so, we enter the second quarter with a robust pipeline that continues to reflect the potential resulting from the strategic investments we have made in this segment over the past few years. We are confident we are well-positioned with motivated buyers and sellers, along with deep expertise across the industries we cover.
The firm's suite of AI-based tools and technologies is focused on empowering financial advisors and professionals across the firm by applying artificial intelligence to enhance service models in secure, scalable applications. Capital Markets results declined this quarter, primarily driven by lower M&A and advisory revenues, and also lower debt underwriting and affordable housing investment revenues on a sequential basis. Given the very strong M&A results in both the year-ago and sequential periods, this quarter faced tough comparables. Even so, we enter the second quarter with a robust pipeline that continues to reflect the potential resulting from the strategic investments we have made in this segment over the past few years. We are confident we are well-positioned with motivated buyers and sellers, along with deep expertise across the industries we cover.
Highlighting. This is our newly launched proprietary digital AI operations agent named Ray, which Builds on our service focused long-term AI strategy.
<unk> $9 billion across all of our platforms.
The Firm Suite of AI-based tools and technologies is focused on empowering financial advisors and professionals across the firm by applying artificial intelligence to enhance service models and secure, scalable applications.
Our optimism about future growth is fueled by our robust advisor recruiting pipeline and strong levels of commitments to join in the coming quarters.
We offer a unique combination of an advisor and client focused culture, coupled with leading technology and solutions, this value proposition coupled with our strong balance sheet and commitment to Independence, is proving to be a differentiator for advisors evaluating alternatives.
In order to continue retaining and attracting the best advisors, we continue making investments in our platform and offerings.
We offer a unique combination of an adviser and client focused culture, coupled with leading technology and solutions. This value proposition coupled with our strong balance sheet and commitment to independents is proving to be a differentiator for advisors evaluating alternatives.
Capital markets results declined this quarter, primarily driven by lower M&A and advisory revenues, as well as lower debt underwriting and affordable housing investment revenues on a sequential basis.
Given the very strong M&A results in both the year-ago and sequential periods, this quarter faced tough comparables.
For example, our private wealth advisor, program and expanded alternative Investments platform supports advisors to focus on high. Net worth clients.
In order to continue retaining and attracting the best advisors, we continue making investments in our platform and offerings.
We continue to make investments in Implement solutions to automate and streamline processes that provide advisors with incremental time to invest in their client relationships.
Even so we enter the second quarter with a robust pipeline, that continues to reflect the potential resulting from the Strategic Investments. We have made in this segment over the past few years.
Ben Budish: Okay. Thanks so much for taking my questions.
Benjamin Budish: Okay. Thanks so much for taking my questions.
Paul M. Shoukry: Thank you.
Paul M. Shoukry: Thank you.
Butch Oorlog: Next up is Craig Siegenthaler from Bank of America.
Operator: Next up is Craig Siegenthaler from Bank of America.
For example, our private wealth advisor program and expanded alternative investments platform supports advisers, who focus on high net worth clients.
Paul Shoukry: We remain committed to opportunistically enhancing the platform by broadening and deepening its capabilities, whether through strategic hiring or acquisitions, as evidenced by the announced acquisition of the boutique investment bank, GreensLedge, during the quarter, which we anticipate closing later in the year. In the asset management segment, net inflows into managed fee-based programs in the private client group were strong during the quarter, annualizing at nearly 10%, and reflect the complementary impact of being able to offer high-quality investment alternatives to our financial advisors, as well as growth resulting from our successful recruiting efforts. In the bank segment, loans ended the quarter at a record $53.4 billion, primarily reflecting outstanding 28% annual growth in securities-based lending balances and 10% growth in this quarter alone.
We remain committed to opportunistically enhancing the platform by broadening and deepening its capabilities, whether through strategic hiring or acquisitions, as evidenced by the announced acquisition of the boutique investment bank, GreensLedge, during the quarter, which we anticipate closing later in the year. In the asset management segment, net inflows into managed fee-based programs in the private client group were strong during the quarter, annualizing at nearly 10%, and reflect the complementary impact of being able to offer high-quality investment alternatives to our financial advisors, as well as growth resulting from our successful recruiting efforts. In the bank segment, loans ended the quarter at a record $53.4 billion, primarily reflecting outstanding 28% annual growth in securities-based lending balances and 10% growth in this quarter alone.
Confident, we are well positioned with motivated buyers and sellers along with deep expertise across the industries, we cover.
Highlighting. This is our newly launched proprietary digital AI operations agent named Ray, which Builds on our service focused long-term AI strategy.
Michael Cho: Hey. Good evening, Paul. Hey, so first, just say big congrats on the 8%. But there actually has been a wide range in recent quarters. We saw 2% a couple of quarters ago, 8% this past quarter. So I was wondering if you can comment on the sustainability of the 8% and, in your view, is maybe the midpoint something like 5% to 6%, a better go-forward run rate to model?
Craig Siegenthaler: Hey. Good evening, Paul. Hey, so first, just say big congrats on the 8%. But there actually has been a wide range in recent quarters. We saw 2% a couple of quarters ago, 8% this past quarter. So I was wondering if you can comment on the sustainability of the 8% and, in your view, is maybe the midpoint something like 5% to 6%, a better go-forward run rate to model?
We continue to make investments and implement solutions to automate and streamline processes that provide advisers with incremental time to invest in their client relationships.
The Firm Suite of ai-based tools and Technologies is focused on empowering financial advisors and professionals across the firm by applying artificial intelligence to enhance service models and secure scalable applications.
We remain committed to opportunistically, enhancing the platform by broadening and deepening. Its capabilities. Whether through strategic hiring or Acquisitions as evidenced by the announced acquisition of the boutique Investment Bank greens ledge during the quarter, which we anticipate closing later in the year.
Highlighting this is our newly launched proprietary digital AI operations agent named Ray, which builds on our service focused long term AI strategy.
Capital markets, results decline this quarter primarily driven by lower m&a, and advisory revenues, and also lower debt underwriting and affordable. Housing investment revenues on a sequential basis.
<unk> suite of AI based tools and technologies is focus on empowering financial advisors and professionals across the firm by applying artificial intelligence to enhance service models and secure scalable applications.
Paul M. Shoukry: Yeah. I mean, 8% did benefit from not only the really strong retention results, recruiting results, but also there's calendar year-end dynamics, which help all firms in the industry with dividends, interest payments, and those sorts of things. But with that being said, we're confident that based on our pipelines now and our retention that I spoke about earlier, that we can continue to be a leading grower in wealth management, which we have been on a pretty consistent basis, and doing it in a way that we feel sustainable. We're really focused on quality over quantity. And so we've been really growing assets by bringing on higher-quality teams that are focused on higher-net-worth clients. And so that enables us to keep a high-touch service model and really reinforce the value proposition of power personal.
Paul M. Shoukry: Yeah. I mean, 8% did benefit from not only the really strong retention results, recruiting results, but also there's calendar year-end dynamics, which help all firms in the industry with dividends, interest payments, and those sorts of things. But with that being said, we're confident that based on our pipelines now and our retention that I spoke about earlier, that we can continue to be a leading grower in wealth management, which we have been on a pretty consistent basis, and doing it in a way that we feel sustainable. We're really focused on quality over quantity. And so we've been really growing assets by bringing on higher-quality teams that are focused on higher-net-worth clients. And so that enables us to keep a high-touch service model and really reinforce the value proposition of power personal.
Given the very strong m&a results in the both year ago and sequential periods. This quarter faced tough comparables.
In the asset management. Segment net inflows into manage feed-based programs in the private client group or strong during the quarter annualizing, at nearly 10% and reflect the complimentary impact of being able to offer high-quality investment alternatives to our financial advisors as well as growth resulting from our successful recruiting efforts.
Capital markets results declined this quarter, primarily driven by lower M&A and advisory revenues and also lower debt underwriting an affordable housing investment revenues on a sequential basis.
Even so we enter the second quarter with a robust pipeline, that continues to reflect the potential resulting from the Strategic Investments. We have made in this segment over the past few years.
In the Bank segment, loans ended the quarter at a record $53.4 billion, primarily reflecting outstanding 28% annual growth in Securities Based Lending balances.
Paul Shoukry: Yet another synergistic impact from our growing private client business, as we are able to deploy our strong balance sheet in support of clients. Importantly, the credit quality of the loan portfolio remains strong. Turning to capital deployment, we continue to deploy capital with a focus on the long term, as evidenced by our robust organic growth, continued investments in our technology and platform, and recently announced acquisitions. In January, we announced the acquisition of Clark Capital Management, a leading asset management firm specializing in wealth-focused solutions to financial advisors and their clients, with expertise across the growing segment of model portfolios and SMA and UMA wrappers. With over $46 billion in combined discretionary assets under management and non-discretionary assets, Clark Capital is recognized as a high-growth firm in the industry and has a track record of strong inflows.
Paul Shoukry: Yet another synergistic impact from our growing private client business, as we are able to deploy our strong balance sheet in support of clients. Importantly, the credit quality of the loan portfolio remains strong. Turning to capital deployment, we continue to deploy capital with a focus on the long term, as evidenced by our robust organic growth, continued investments in our technology and platform, and recently announced acquisitions. In January, we announced the acquisition of Clark Capital Management, a leading asset management firm specializing in wealth-focused solutions to financial advisors and their clients, with expertise across the growing segment of model portfolios and SMA and UMA wrappers. With over $46 billion in combined discretionary assets under management and non-discretionary assets, Clark Capital is recognized as a high-growth firm in the industry and has a track record of strong inflows.
And 10% growth in this quarter alone.
Given the very strong M&A results in the both a year ago and sequential periods this quarter faced tough comparables.
We are confident, we are well, positioned with motivated buyers and sellers along with deep expertise across the industries, we cover.
Even so we enter the second quarter with a robust pipeline that continues to reflect the potential resulting from the strategic investments. We have made in this segment over the past few years we.
Yet another synergistic impact from our growing Private Client business. As we are able to deploy. Our strong balance sheet in support of clients.
We remain committed to opportunistically, enhancing the platform by broadening and deepening. Its capabilities. Whether through strategic hiring or Acquisitions as evidenced by the announced acquisition of the boutique Investment Bank greens ledge during the quarter, which we anticipate closing later in the year.
We are confident we are well positioned with motivated buyers and sellers along with deep expertise across the industries recover.
Importantly, the credit quality of the loan portfolio remains strong. Turning to capital deployment, we continue to deploy capital with a focus on the long term, as evidenced by robust organic growth, continued investments in our technology and platform, and recently announced acquisitions.
We remain committed to opportunistically enhancing the platform by broadening and deepening its capabilities, whether through strategic hiring or acquisitions as evidenced by the announced acquisition of the boutique investment Bank Greens ledge during the quarter, which we anticipate closing later in the year.
Michael Cho: Thanks for that, Paul. And then given the stronger recruiting that we've seen and we're seeing in the results today, but also elevated competition, could we see the PCG comp ratio creep up in 2026? Or does the 5 to 10-year smoothing really protect the operating margin if recruiting and NNAs remain robust?
Craig Siegenthaler: Thanks for that, Paul. And then given the stronger recruiting that we've seen and we're seeing in the results today, but also elevated competition, could we see the PCG comp ratio creep up in 2026? Or does the 5 to 10-year smoothing really protect the operating margin if recruiting and NNAs remain robust?
In January, we announced the acquisition of Clark Capital Management, a leading asset management firm specializing in well-focused solutions to financial advisors and their clients.
In the asset management. Segment net inflows into manage fee-based, programs in the private client group or strong during the quarter annualizing, at nearly 10% and reflect the complimentary impact of being able to offer high-quality investment alternatives to our financial advisors as well as growth resulting from our successful recruiting efforts.
With expertise in the growing segment of model portfolios, and SMA and UMA wrappers.
In the bank segment loans ended the quarter at a record. 53.4 billion.
And the asset management segment net inflows into managed fee based programs in the private client group was strong during the quarter annualized at nearly 10% and reflect the complementary impact of being able to offer high quality investment alternatives to our financial advisors as well as growth, resulting from our successful recruiting efforts.
Primarily reflecting outstanding, 28% annual growth and security space lending, balances.
Paul M. Shoukry: Yeah. I mean, there's a lot of investment that goes into recruiting. The reason we broke out the retention and transition assistance-related expense for the first time this quarter is because in the last 12 months, we recruited advisors who had $460 million at their prior firm. That's the equivalent to a pretty decent-sized acquisition in our space, especially when you look at what is remaining out there. 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. And if we did do an acquisition, that type of expense would typically be non-GAAP. So we wanted to at least break it out for you to see because that is a part of the expense. But so is we pay recruiters.
Paul M. Shoukry: Yeah. I mean, there's a lot of investment that goes into recruiting. The reason we broke out the retention and transition assistance-related expense for the first time this quarter is because in the last 12 months, we recruited advisors who had $460 million at their prior firm. That's the equivalent to a pretty decent-sized acquisition in our space, especially when you look at what is remaining out there. 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. And if we did do an acquisition, that type of expense would typically be non-GAAP. So we wanted to at least break it out for you to see because that is a part of the expense. But so is we pay recruiters.
And 10% growth in this quarter alone.
Paul Shoukry: We are excited to welcome Clark Capital into the Raymond James family, where it will maintain its independence and brand going forward. We believe their services and capabilities further strengthen Raymond James Investment Management's existing investment and wealth planning offerings.... This announced acquisitions, along with that of GreensLedge, demonstrates our steadfast pursuit of acquisitions that are a strong cultural fit, a good strategic fit, and valuations that generate attractive returns for our shareholders. As we continue to pursue both organic and inorganic growth opportunities, we also maintain our share repurchase program to effectively manage capital levels. This quarter, we repurchased $400 million of common stock at an average share price of $162. We ended the quarter with a Tier 1 leverage ratio of 12.7%. Now, I'll turn the call over to Butch Oorlog to review our financial results in detail. Butch?
We are excited to welcome Clark Capital into the Raymond James family, where it will maintain its independence and brand going forward. We believe their services and capabilities further strengthen Raymond James Investment Management's existing investment and wealth planning offerings.... This announced acquisitions, along with that of GreensLedge, demonstrates our steadfast pursuit of acquisitions that are a strong cultural fit, a good strategic fit, and valuations that generate attractive returns for our shareholders. As we continue to pursue both organic and inorganic growth opportunities, we also maintain our share repurchase program to effectively manage capital levels. This quarter, we repurchased $400 million of common stock at an average share price of $162. We ended the quarter with a Tier 1 leverage ratio of 12.7%. Now, I'll turn the call over to Butch Oorlog to review our financial results in detail. Butch?
Yet another synergistic impact from our growing Private Client business. As we are able to deploy. Our strong balance sheet in support of clients.
In the bank segment loans ended the quarter at a record $53 $4 billion, primarily reflecting outstanding 28% annual growth in securities based lending balances.
With over $46 billion in combined discretionary assets under management and non-discretionary assets, Clark Capital is recognized as a high-growth firm in the industry and has a track record of strong inflows. We are excited to welcome Clark Capital into the Raymond James family, where it will maintain its independence in brand going forward.
We believe their services and capabilities further, strengthen Raymond, James investment, Management's, existing investment, and wealth planning offerings.
And 10% growth in this quarter alone.
Yet another synergistic impact from our growing private client business as we are able to deploy our strong balance sheet and support of clients.
Importantly, the credit quality of the loan portfolio remains strong turning the capital to the employment. We continue to deploy Capital with a focus on the long term, as evidenced by our robust organic growth continued investments in our technology and platform and recently announced acquisitions.
This announced acquisition, along with that of Greens Ledge, demonstrates our steadfast pursuit of acquisitions that are a strong cultural fit, a good strategic fit, and valuations that generate attractive returns for our shareholders.
Importantly, the credit quality of the loan portfolio remained strong turning to capital deployment, we continue to deploy capital with a focus on the long term as evidenced by our robust organic growth continued investments in our technology and platform and recently announced acquisitions.
In January, we announced the acquisition of Clark Capital Management a leading asset management firm. Specializing in wealth, focused solutions to financial advisors in their clients.
With expertise across the growing segment of model portfolios, and SMA and Uma rappers.
As we continue to pursue both organic and inorganic growth opportunities, we also maintain our share repurchase program to effectively manage Capital levels.
Paul M. Shoukry: And we have to pay for account transfer fees and other things that support that growth. But again, organic growth is a number one capital priority in terms of capital deployment. So we'll continue to invest in that organic growth. 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.
And we have to pay for account transfer fees and other things that support that growth. But again, organic growth is a number one capital priority in terms of capital deployment. So we'll continue to invest in that organic growth. 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.
This quarter we repurchase 400 million of common stock at an average share price of 162.
In January we announced the acquisition of Clark Capital management, a leading asset management firms specializing in wealth focused solutions to financial advisers and their clients with expertise across the growing segment of model portfolios and SMA and <unk> wrappers.
We ended the quarter with a tier 1. Leverage ratio of 12.7%.
Now, I'll turn the call over to Jonathan Oorlog to review our financial results in detail.
Butch.
Butch Oorlog: Thank you, Paul. I'll begin on slide six. The firm reported record net revenues of $3.7 billion for the fiscal first quarter. Net income available to common shareholders was $562 million, with earnings per diluted share of $2.79. Excluding expenses related to acquisitions, adjusted net income available to common shareholders equaled $577 million, resulting in adjusted earnings per diluted share of $2.86. Our pretax margin for the quarter was 19.5%, and adjusted pretax margin was 20%. We generated annualized return on common equity of 18% and annualized adjusted return on tangible common equity of 21.4%. Solid results for the quarter, particularly given our conservative capital base. Turning to slide seven.
Butch Oorlog: Thank you, Paul. I'll begin on slide six. The firm reported record net revenues of $3.7 billion for the fiscal first quarter. Net income available to common shareholders was $562 million, with earnings per diluted share of $2.79. Excluding expenses related to acquisitions, adjusted net income available to common shareholders equaled $577 million, resulting in adjusted earnings per diluted share of $2.86. Our pretax margin for the quarter was 19.5%, and adjusted pretax margin was 20%. We generated annualized return on common equity of 18% and annualized adjusted return on tangible common equity of 21.4%. Solid results for the quarter, particularly given our conservative capital base. Turning to slide seven.
Thank you, Paul.
With over 46 billion dollars in Combined, discretionary assets under management and non-discretionary assets Clark capital is recognized as a high growth firm in the industry and has a track record of strong inflows. We are excited to welcome Clark Capital into the Raymond James family, where it will maintain its independence in brand going forward.
I'll begin on. Slide 6.
With over $46 billion in combined discretionary assets under management and non discretionary assets Clark capital is recognized as a high growth firm in the industry and has a track record of strong inflows. We are excited to welcome Clark capital into the Raymond James family, where it will maintain its independence and.
Michael Cho: Thanks, Paul.
Craig Siegenthaler: Thanks, Paul.
The Firm reported record that revenues a 3.7 billion dollars for the fiscal first quarter.
We believe their services and capabilities further, strengthen Raymond, James investment, Management's, existing investment, and wealth planning offerings.
Butch Oorlog: Brennan Hawken from BMO Capital Markets has the next question.
Operator: Brennan Hawken from BMO Capital Markets has the next question.
Michael Cho: Hey. Good evening, Paul and Butch. Thanks for taking my questions. I'm curious. I totally hear you on how robust the capital markets pipelines are, the need for the sponsors to engage. And absolutely hear you there. So it sounds like you guys are setting up for solid revenue growth as we come into the coming year. Is that fair? Or do you think that it's going to take a little bit longer to come to market? The sort of revenue translation there has been a bit long in the tooth, so to speak. And then when you eventually do get some revenue, how should we be thinking about operating leverage on revenue growth? Is there a rubric or an algorithm we can just think about at a high level when we're confirming we're tuning up our forecast correctly?
Brennan Hawken: Hey. Good evening, Paul and Butch. Thanks for taking my questions. I'm curious. I totally hear you on how robust the capital markets pipelines are, the need for the sponsors to engage. And absolutely hear you there. So it sounds like you guys are setting up for solid revenue growth as we come into the coming year. Is that fair? Or do you think that it's going to take a little bit longer to come to market? The sort of revenue translation there has been a bit long in the tooth, so to speak. And then when you eventually do get some revenue, how should we be thinking about operating leverage on revenue growth? Is there a rubric or an algorithm we can just think about at a high level when we're confirming we're tuning up our forecast correctly?
Net income available to common shareholders was $562 million, with earnings per diluted share of $2.79.
This announced Acquisitions along with that of greens. Ledge demonstrates our steadfast pursuit of Acquisitions that are strong cultural fit a good strategic fit in valuations that generate attractive returns for our shareholders.
Brand going forward.
We believe their services and capabilities further strengthen Raymond James investment management's existing investment and wealth planning offerings.
Excluding expenses related to Acquisitions adjusted net income. Available to Common shareholders equalled. 577 million resulting in adjusted earnings per diluted, share of $2.86.
As we continue to pursue both organic and inorganic growth opportunities, we also maintain our share repurchase program to effectively manage Capital levels.
This announced acquisitions along without a green sledge demonstrates our steadfast pursuit of acquisitions that are strong cultural fit a good strategic fit and valuations that generate attractive returns for our shareholders.
Our pre-tax margin for the quarter was 19.5% and adjusted pre-tax. Margin was 20%.
This quarter, we repurchased 400 million of common stock at an average share price of 162.
We ended the quarter with a tier 1. Leverage ratio of 12.7%.
We generated annualized return on common Equity of 18% and annualized. Adjusted return on tangible, common Equity of 21.4%.
As we continue to pursue both organic and inorganic growth opportunities. We also maintain our share repurchase program to effectively manage capital levels.
Call over to butcher log to review our financial results in detail.
but,
Thank you, Paul.
Solid results for the quarter, particularly given our conservative Capital base.
I'll begin on. Slide 6.
Butch Oorlog: Private Client Group generated pretax income of $439 million on record quarterly net revenues of $2.77 billion. Results were driven by higher PCG assets under administration compared to the previous year, resulting from the impacts of market appreciation, retention, and the consistent addition of net new assets. Pretax income declined 5% year-over-year, primarily due to the impact on this segment of interest rate reductions, which reduced our non-compensable revenues. Interest rates have declined 125 basis points since early November 2024. Our capital markets segment generated quarterly net revenues of $380 million and a pretax income of $9 million. Segment net revenues declined year-over-year and sequentially due to the factors Paul already mentioned.
Private Client Group generated pretax income of $439 million on record quarterly net revenues of $2.77 billion. Results were driven by higher PCG assets under administration compared to the previous year, resulting from the impacts of market appreciation, retention, and the consistent addition of net new assets. Pretax income declined 5% year-over-year, primarily due to the impact on this segment of interest rate reductions, which reduced our non-compensable revenues. Interest rates have declined 125 basis points since early November 2024. Our capital markets segment generated quarterly net revenues of $380 million and a pretax income of $9 million. Segment net revenues declined year-over-year and sequentially due to the factors Paul already mentioned.
Turning to slide 7.
This quarter, we repurchased $400 million of common stock at an average share price of $162.
The Firm reported record net revenues, a 3.7 billion dollars for the fiscal first quarter.
We ended the quarter with a tier one leverage ratio of 12, 7%.
Private Client group, generated pre-tax income of 439 million on record, quarterly net, revenues of 2.77 billion.
Paul M. Shoukry: Yeah. I mean, we had a really strong quarter in Investment Banking just last quarter. So if you look at Capital Markets last quarter, it was over $500 million in revenues. And we certainly don't think that's a ceiling. But you saw how that impacted the operating leverage relative to this quarter. I think the pretax margin last quarter was around 17.5% in that segment. So there's a lot of operating leverage with higher levels of revenue in Capital Markets. We are optimistic about the pipeline. And we would be disappointed for the rest of the year if the revenue in the Capital Markets segment doesn't improve meaningfully above the $380 million level that it's achieved this quarter.
Paul M. Shoukry: Yeah. I mean, we had a really strong quarter in Investment Banking just last quarter. So if you look at Capital Markets last quarter, it was over $500 million in revenues. And we certainly don't think that's a ceiling. But you saw how that impacted the operating leverage relative to this quarter. I think the pretax margin last quarter was around 17.5% in that segment. So there's a lot of operating leverage with higher levels of revenue in Capital Markets. We are optimistic about the pipeline. And we would be disappointed for the rest of the year if the revenue in the Capital Markets segment doesn't improve meaningfully above the $380 million level that it's achieved this quarter.
net income available to Common shareholders, was 562 million with earnings per diluted share of 2.79
Now I'll turn the call over to Butch or log to review our financial results in detail, but.
Thank you Paul I'll begin on slide six the firm reported record net revenues of $3 $7 billion for the fiscal first quarter.
Results were driven by higher PCG assets under Administration compared to the previous year, resulting from the impacts of Market appreciation, retention. And the consistent addition of net new assets,
Excluding expenses related to Acquisitions adjusted net income. Available to Common shareholders equalled. 577 million resulting in adjusted earnings per diluted, share of $2.86.
Net income available to common shareholders was $562 million with earnings per diluted share of $2 79.
Our pre-tax margin for the quarter was 19.5% and adjusted pre-tax. Margin was 20%.
Pre-tax income declined 5% year-over-year, primarily due to the impact on this segment of interest rate reductions, which reduced our non-compensable revenues.
Excluding expenses related to acquisitions adjusted net income available to common shareholders equaled $577 million, resulting in adjusted earnings per diluted share of $2.86.
Interest rates have declined 125 basis points since early November 2024.
We generated annualized return on common Equity of 18% and annualized. Adjusted return on tangible, common Equity of 21.4%.
Solid results for the quarter, particularly given our conservative Capital base.
Ated quarterly, net revenues of $380 million and a pre-tax income of $9 million.
Our pre tax margin for the quarter was 19, 5% and adjusted pre tax margin was 20%.
Michael Cho: Okay. Got it. Thank you. Then a lot of questions around the outlook for recruiting and whatnot. There's certainly robust net new asset growth this quarter. So following up on Craig's question around because it has been volatile and smooths around. And also, in the marketplace, there's a couple of deals out there that have been very much in focus, which could cause some maybe movement to be a bit more elevated. Did you see that? Did that impact you guys? Were you guys able to capitalize on some of that movement? And how long do you expect such disruption could create opportunity for you?
Brennan Hawken: Okay. Got it. Thank you. Then a lot of questions around the outlook for recruiting and whatnot. There's certainly robust net new asset growth this quarter. So following up on Craig's question around because it has been volatile and smooths around. And also, in the marketplace, there's a couple of deals out there that have been very much in focus, which could cause some maybe movement to be a bit more elevated. Did you see that? Did that impact you guys? Were you guys able to capitalize on some of that movement? And how long do you expect such disruption could create opportunity for you?
Turning to slide 7.
Segments' net revenues declined year-over-year and sequentially, due to the factors Paul already mentioned.
Butch Oorlog: The asset management segment generated record pretax income of $143 million on record net revenues of $326 million. Results were largely attributable to higher financial assets under management compared to the prior year quarter, due to the market appreciation over the 12-month period and strong net inflows into PCG fee-based accounts. The bank segment generated net revenues of $487 million and record pretax income of $173 million. On a sequential basis, the bank segment net interest income grew 6%, primarily driven by strong loan growth, fueled by securities-based loans and lower funding costs, driven by the decline in short-term rates and a favorable mix shift in deposits. Turning to consolidated revenues on Slide 8.
The asset management segment generated record pretax income of $143 million on record net revenues of $326 million. Results were largely attributable to higher financial assets under management compared to the prior year quarter, due to the market appreciation over the 12-month period and strong net inflows into PCG fee-based accounts. The bank segment generated net revenues of $487 million and record pretax income of $173 million. On a sequential basis, the bank segment net interest income grew 6%, primarily driven by strong loan growth, fueled by securities-based loans and lower funding costs, driven by the decline in short-term rates and a favorable mix shift in deposits. Turning to consolidated revenues on Slide 8.
We generated annualized return on common equity of 18% and annualized adjusted return on tangible common equity of 21, 4%.
Private Client group, generated pre-tax income of 439 million on record, quarterly net, revenues of 2.77 billion.
the asset management segment generated record pre-tax, income of 143 million on record net, revenues of 326 million
Solid results for the quarter, particularly given our conservative capital base.
Turning to slide seven.
Results were driven by higher PCG assets under Administration compared to the previous year, resulting from the impacts of Market appreciation, retention. And the consistent addition of net new assets,
Private client group generated pretax income of $439 million on record quarterly net revenues of $2.77 billion.
Results were largely attributable to higher Financial assets under management, compared to the prior year quarter, due to the market appreciation, over the 12-month period and Strong, net inflows into PCG fee based accounts.
pre-tax income, declined, 5% year-over-year, primarily due to the impact on this segment of interest rate reductions, which reduced our non-compensable revenues,
Results were driven by higher PSEG assets under administration compared to the previous year, resulting from the impacts of market appreciation retention and a consistent addition of net new assets pre.
The bank segment generated net revenues of $487 million and record pre-tax income of $173 million.
interest rates have declined 125 basis points since early November 2024
On a sequential basis. The bank segment, net interest income grew 6%.
Paul M. Shoukry: Yeah. I mean, I hate to speak on any specific M&A or transactions. We have a lot of friendly competitors. And they're doing good jobs keeping the advisors through those transactions. 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, and other independents. And again, that value proposition, we have the largest addressable market across our affiliation options, from employee to independent contractor to the RIA custody. And we have critical mass and decades of experience in all of them. It's not a new venture for us. It's not something that we're testing out or trying out or seeing how it would work.
Paul M. Shoukry: Yeah. I mean, I hate to speak on any specific M&A or transactions. We have a lot of friendly competitors. And they're doing good jobs keeping the advisors through those transactions. 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, and other independents. And again, that value proposition, we have the largest addressable market across our affiliation options, from employee to independent contractor to the RIA custody. And we have critical mass and decades of experience in all of them. It's not a new venture for us. It's not something that we're testing out or trying out or seeing how it would work.
Pre tax income declined 5% year over year, primarily due to the impact on this segment of interest rate reductions, which reduced our non compensable revenues.
Our Capital market segments generated quarterly, net revenues of 380 million and a pre-tax income of 9 million.
Segments, net revenues declined, year-over-year and sequentially due to the factors Paul already mentioned.
Primarily driven by strong loan growth fueled by securities-based loans and lower funding costs driven by the decline in short-term rates, and a favorable mix shift in deposits.
Interest rates have declined 125 basis points since early November 2024.
Butch Oorlog: Asset management and related administrative fees of nearly $2 billion grew 15% over the prior year and 6% over the preceding quarter. Record PCG fee-based assets equaled $1.04 trillion at quarter end, up 19% year over year and 3% over the preceding quarter. As we look ahead, we expect fiscal second quarter 2026 asset management and related administrative fees to be higher by approximately 1% over the first quarter level, driven by the impact of 2 fewer billing days in our second quarter, which partially offsets the impact of the 3% increase in PCG assets in fee-based accounts at quarter end. Moving to Slide 9.
Asset management and related administrative fees of nearly $2 billion grew 15% over the prior year and 6% over the preceding quarter. Record PCG fee-based assets equaled $1.04 trillion at quarter end, up 19% year over year and 3% over the preceding quarter. As we look ahead, we expect fiscal second quarter 2026 asset management and related administrative fees to be higher by approximately 1% over the first quarter level, driven by the impact of 2 fewer billing days in our second quarter, which partially offsets the impact of the 3% increase in PCG assets in fee-based accounts at quarter end. Moving to Slide 9.
Turning to Consolidated revenues on slide 8.
Our capital markets segment generated quarterly net revenues of $380 million and a pre tax income of $9 million.
the asset management segment generated record pre-tax, income of 143 million on record net, revenues of 326 million
Asset management and related administrative fees of nearly $2 billion grew 15% over the prior year and 6% over the preceding quarter.
Segment net revenues declined year over year and sequentially due to the factors Paul already mentioned.
Results were largely attributable to higher Financial assets under management, compared to the prior year quarter, due to the market appreciation, over the 12-month period and Strong net inflows into PCG, fee-based accounts.
The asset management segment generated record pretax income of $143 million on record net revenues of $326 million.
Paul M. Shoukry: And so that value proposition, the cultural fit, the platform that I talked about, the multiple affiliation options, it's appealing to advisors from a lot of different firms.
And so that value proposition, the cultural fit, the platform that I talked about, the multiple affiliation options, it's appealing to advisors from a lot of different firms.
Record PCG fee-based assets equaled $1.04 trillion at quarter end, up 19% year-over-year and 3% over the preceding quarter.
The bank segment generated net revenues of 487 million and record pre-tax income of 173 million.
Results were largely attributable to higher financial assets under management compared to the prior year quarter due to the market appreciation over the 12 month period and strong net inflows into P. C. G fee based accounts.
Michael Cho: Okay. Thanks for taking my question.
Brennan Hawken: Okay. Thanks for taking my question.
On a sequential basis. The bank segment, net interest income grew 6%.
As we look ahead. We expect fiscal second. Quarter 2026 asset management and related administrative fees to be higher by approximately 1% over the first quarter level.
Butch Oorlog: Up next, you'll hear from Bill Katz from TD Cowen.
Operator: Up next, you'll hear from Bill Katz from TD Cowen.
Ben Budish: Okay. Thank you very much for taking the question. Just coming back to the M&A, I hear you on organic growth. And it seems like the pipeline there is quite good. I just wonder if you could unpack maybe the Clark transaction a little bit, how to think about the accretion to that, and then how should we be thinking about where you might be interested in terms of incremental inorganic opportunities given such a strong balance sheet, and maybe trying to understand the path back to a 10% T1 leverage ratio. Thank you.
William Katz: Okay. Thank you very much for taking the question. Just coming back to the M&A, I hear you on organic growth. And it seems like the pipeline there is quite good. I just wonder if you could unpack maybe the Clark transaction a little bit, how to think about the accretion to that, and then how should we be thinking about where you might be interested in terms of incremental inorganic opportunities given such a strong balance sheet, and maybe trying to understand the path back to a 10% T1 leverage ratio. Thank you.
The bank segment generated net revenues of $487 million and record pretax income of $173 million.
Primarily driven by strong loan growth fueled by Securities based loans and lower funding costs driven by the decline, in short-term rates, and a favorable mix shift in deposits.
Driven by the impact of two fewer billing days in our second quarter, which partially offsets the impact of the 3% increase in PCG assets and fee-based accounts at quarter end.
Turning to Consolidated revenues on slide 8.
Moving to slide 9.
Butch Oorlog: Clients' domestic cash sweep and Enhanced Savings Program balances ended the quarter at $58.1 billion, up 3% over the preceding quarter and representing 3.7% of domestic PCG client assets. Based on January activity to date, domestic cash sweep and Enhanced Savings Program balances have declined as a result of the collection of record quarterly fee billings of $1.8 billion, and with further declines due to client reinvestment activity. Turning to Slide 10. Combined net interest income and RJBDP fees from third-party banks grew 2% over the prior quarter to $667 million. Net interest margin in the bank segment increased 10 basis points to 2.81% for the quarter, driven by the factors I previously mentioned.
Clients' domestic cash sweep and Enhanced Savings Program balances ended the quarter at $58.1 billion, up 3% over the preceding quarter and representing 3.7% of domestic PCG client assets. Based on January activity to date, domestic cash sweep and Enhanced Savings Program balances have declined as a result of the collection of record quarterly fee billings of $1.8 billion, and with further declines due to client reinvestment activity. Turning to Slide 10. Combined net interest income and RJBDP fees from third-party banks grew 2% over the prior quarter to $667 million. Net interest margin in the bank segment increased 10 basis points to 2.81% for the quarter, driven by the factors I previously mentioned.
On a sequential basis the bank segment net interest income grew 6%.
Primarily driven by strong loan growth fueled by securities based loans and lower funding costs driven by the decline in short term rates and a favorable mix shift in deposits.
Asset management and related administrative fees of nearly 2 billion dollars. Grew 15% over the prior year and 6% over the preceding quarter.
Clients domestic cash sweep and enhance Savings Program balances into the quarter at 58.1 billion dollars up. 3%, over the preceding quarter and representing 3.7% of domestic PCG client assets.
Paul M. Shoukry: Thanks, Bill. Yeah. Clark Capital is really a perfect representation of our M&A priorities. And that's first and foremost a firm that has a good cultural fit. The Clark family who started the firm and the entire team there are client-focused, long-term focused, and exactly approach the business in a very similar way that we approach it with our values and our culture. And then it's a strategic fit in terms of they're focused on treating advisors like clients. We're going to maintain the independence that Clark has, both in terms of brand and the way they interface with their clients, not our clients, but their clients. And so the cultural fit, the strategic fit, and then the financials have to make sense for both us and for the sellers. And so that was the case here as well. And so we are very excited.
Paul M. Shoukry: Thanks, Bill. Yeah. Clark Capital is really a perfect representation of our M&A priorities. And that's first and foremost a firm that has a good cultural fit. The Clark family who started the firm and the entire team there are client-focused, long-term focused, and exactly approach the business in a very similar way that we approach it with our values and our culture. And then it's a strategic fit in terms of they're focused on treating advisors like clients. We're going to maintain the independence that Clark has, both in terms of brand and the way they interface with their clients, not our clients, but their clients. And so the cultural fit, the strategic fit, and then the financials have to make sense for both us and for the sellers. And so that was the case here as well. And so we are very excited.
Turning to consolidated revenues on slide eight.
Record PCG fee, based assets equalled. 1.04 trillion dollars at quarter. End up 19% year-over-year and 3% over the preceding quarter.
Asset management and related administrative fees of nearly $2 billion grew 15% over the prior year and 6% over the preceding quarter.
Based on January activity to date, domestic cash sweep and Enhanced Savings Program balances have declined as a result of the collection of record quarterly fee billings of $1.8 billion.
and with further declines due to client, reinvestment activity,
Record P. C. G fee based assets equaled 1.04 trillion dollars at quarter end up 19% year over year and 3% over the preceding quarter.
As we look ahead. We expect fiscal second. Quarter 2026 asset management and related administrative fees to be higher by approximately 1% over the first quarter level.
turning to slide 10.
combined net interest income and RJ bdp fees from third-party Banks, crew 2% over the prior, quarter to 667 million
As we look ahead, we expect fiscal second quarter, 2026 asset management and related administrative fees to be higher by approximately 1% over the first quarter level.
Driven by the impact of 2 fewer billing days in our second quarter, which partially offsets the impact of the 3%. Increase in PCG assets and fee-based Accounts at quarter end.
Moving to slide 9.
Net interest margin in the bank segment increased 10 basis points to 2.81% for the quarter driven by the factors. I previously mentioned
Butch Oorlog: The average yield on RJBDP balances with third-party banks decreased 15 basis points to 2.76%, primarily due to the impact of the Fed interest rate cuts since mid-September 2025. Based on current interest rates, including the full impact of the October and December rate cuts, and assuming unchanged quarter-end balances net of the $1.8 billion fiscal second quarter fee billing collection, we would expect the aggregate of NII and RJBDP third-party fees in the second quarter to be down approximately 3% from the first quarter level. The decline is largely due to 2 fewer interest earning days in the second fiscal quarter, as lower yields resulting from the full quarter impact of the recent Fed rate cuts are partially offset by the higher interest earning asset balances as of the beginning of the quarter.
The average yield on RJBDP balances with third-party banks decreased 15 basis points to 2.76%, primarily due to the impact of the Fed interest rate cuts since mid-September 2025. Based on current interest rates, including the full impact of the October and December rate cuts, and assuming unchanged quarter-end balances net of the $1.8 billion fiscal second quarter fee billing collection, we would expect the aggregate of NII and RJBDP third-party fees in the second quarter to be down approximately 3% from the first quarter level. The decline is largely due to 2 fewer interest earning days in the second fiscal quarter, as lower yields resulting from the full quarter impact of the recent Fed rate cuts are partially offset by the higher interest earning asset balances as of the beginning of the quarter.
Driven by the impact of two fewer billing days in our second quarter, which partially offsets the impact of the 3% increase in <unk> assets and fee based accounts at quarter end.
The average yield on RJ BDP balances with third-party banks decreased 15 basis points to 2.76%.
Clients domestic cash sweep and enhance savings program balance is ended the quarter at 58.1 billion dollars up. 3% over the preceding quarter and representing 3.7% of domestic PCG client assets.
Paul M. Shoukry: They're high growth, high organic growth, differentiated product, but really, really deep personal relationships with their clients, which is what was so appealing about Clark Capital. And those are the type of deals we're going to look at across all of our businesses, is firms that have good cultural fit, strategic fit, and makes financial sense for us and for the sellers. And so we're very active. We have an active corporate development apparatus. We have a lot of capital. And we're confident with our ability to integrate. And so we're going to continue to look for deals that make sense. But we're not going to force deals just to do deals. They have to make sense for our shareholders over the long term.
They're high growth, high organic growth, differentiated product, but really, really deep personal relationships with their clients, which is what was so appealing about Clark Capital. And those are the type of deals we're going to look at across all of our businesses, is firms that have good cultural fit, strategic fit, and makes financial sense for us and for the sellers. And so we're very active. We have an active corporate development apparatus. We have a lot of capital. And we're confident with our ability to integrate. And so we're going to continue to look for deals that make sense. But we're not going to force deals just to do deals. They have to make sense for our shareholders over the long term.
primarily due to the impact of the Fed interest rate cuts since mid-September 2025,
Moving to slide nine.
Clients' domestic cash sweep and enhanced savings program balances ended the quarter at $58 $1 billion up 3% over the preceding quarter and representing three 7% of domestic <unk> client assets.
Based on January activity to date domestic cash sweep and enhance Savings Program. Balances have declined as a result of the collection of record quarterly fee Billings of 1.8 billion.
and with further declines due to client, reinvestment activity,
turning to slide 10.
Based on January activity to date domestic cash sweep and enhanced savings program balances have declined as a result of the collection of record quarterly fee billings of $1 $8 billion and with further declines due to client reinvestment activity.
based on current interest rates, including the full impact of the October and December rate, cuts and assuming unchanged quarter and balances net of the 1.8 billion fiscal second quarter fee. Billing collection, we would expect the aggregate of knee and rjb DP third-party fees in the second quarter to be down approximately 3% from the first quarter level.
% over the prior quarter to 667 million.
Net interest margin in the bank segment increased 10 basis points to 2.81% for the quarter driven by the factors. I previously mentioned
Ben Budish: Okay. Thank you. And just as a follow-up, maybe it's a two-part. So I apologize for squeezing it in. Can you talk a little bit about the path to support the interest-earning asset growth from here and how you sort of see the interplay of the sort of liquidity on a third party versus maybe cash coming in and funding those new assets? And then if you could just review what you said in terms of the January numbers, the way it was phrased, I wasn't quite clear if you were down 1.8 for the quarter or down something less from that, inclusive of billings and activity. If you could just clarify, that'd be helpful. Thank you.
William Katz: Okay. Thank you. And just as a follow-up, maybe it's a two-part. So I apologize for squeezing it in. Can you talk a little bit about the path to support the interest-earning asset growth from here and how you sort of see the interplay of the sort of liquidity on a third party versus maybe cash coming in and funding those new assets? And then if you could just review what you said in terms of the January numbers, the way it was phrased, I wasn't quite clear if you were down 1.8 for the quarter or down something less from that, inclusive of billings and activity. If you could just clarify, that'd be helpful. Thank you.
Turning to slide 10.
Bind net interest income and RJ BD P fees from third party banks grew 2% over the prior quarter to $667 million.
Butch Oorlog: Keep in mind, there are many variables which could influence actual results, including any interest rate actions during the upcoming quarter and factors affecting our balance sheet, including changes in our loan and deposit balances. Turning to consolidated expenses on Slide 11. Compensation expense was $2.45 billion, and the total compensation ratio for the quarter was 65.6%. Excluding acquisition-related compensation expenses, the adjusted compensation ratio was 65.4%. Commencing this quarter, we presented recruiting and retention-related compensation expense in the PCG segment for each reporting period to aid the understanding of the impact of such costs on our business. 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.
Keep in mind, there are many variables which could influence actual results, including any interest rate actions during the upcoming quarter and factors affecting our balance sheet, including changes in our loan and deposit balances. Turning to consolidated expenses on Slide 11. Compensation expense was $2.45 billion, and the total compensation ratio for the quarter was 65.6%. Excluding acquisition-related compensation expenses, the adjusted compensation ratio was 65.4%. Commencing this quarter, we presented recruiting and retention-related compensation expense in the PCG segment for each reporting period to aid the understanding of the impact of such costs on our business. 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.
The decline is largely due to, one, fewer interest-earning days in the second fiscal quarter and, two, lower yields. The full-quarter impact of the recent Fed rate cuts is partially offset by the higher interest-earning asset balances as of the beginning of the quarter.
The average yield on RJ. Bdp balances with third-party Banks. Decreased 15 basis points to 2.76%.
Net interest margin in the bank segment increased 10 basis points to 281% for the quarter.
primarily due to the impact of the FED interest rate Cuts since mid September 2025,
Keep in mind, there are many variables which could influence actual results, including any interest rate actions during the upcoming quarter and factors affecting our balance sheet, including changes in our loan and deposit balances.
Driven by the factors I previously mentioned.
Turning to Consolidated expenses on slide 11.
The average yield on our JBT P balances with third party banks decreased 15 basis points to 2.76%.
Paul M. Shoukry: Yeah. So hey, Bill. In terms of where we stand currently in January, our total combined program sweep and ESP balances are down $2.6 billion, which includes the $1.8 billion fee billing, which have already come out of the accounts as we indicated. And what we're seeing for that difference is strong client reinvestment of their balances for the rest of it. The breakdown between sweep program and ESP balances of that $2.6 billion is we've seen $2.1 billion of that in the sweep program and about $500 million of that in the ESP program since the quarter in balance. So yeah, we're continuing to see, like others that have reported, a shift of the mix, bigger percentage declines in the enhanced savings program balances as rates come down. Clients are those high-yield savings rates are less appealing, especially relative to the market.
Paul M. Shoukry: Yeah. So hey, Bill. In terms of where we stand currently in January, our total combined program sweep and ESP balances are down $2.6 billion, which includes the $1.8 billion fee billing, which have already come out of the accounts as we indicated. And what we're seeing for that difference is strong client reinvestment of their balances for the rest of it. The breakdown between sweep program and ESP balances of that $2.6 billion is we've seen $2.1 billion of that in the sweep program and about $500 million of that in the ESP program since the quarter in balance. So yeah, we're continuing to see, like others that have reported, a shift of the mix, bigger percentage declines in the enhanced savings program balances as rates come down. Clients are those high-yield savings rates are less appealing, especially relative to the market.
Compensation expense was $2.45 billion, and the total compensation ratio for the quarter was 65.6%.
Primarily due to the impact of the fed interest rate cuts since mid September 2025.
based on current interest rates, including the full impact of the October and December rate cuts and assuming unchanged. Quarter, end balances net of the 1.8 billion fiscal second quarter fee. Billing collection, we would expect the aggregate of knee and rjb DP third-party fees in the second quarter to be down approximately 3% from the first quarter level.
Based on current interest rates, including the full impact of the October and December rate cuts and assuming unchanged quarter end balances net of the 1.8 billion dollar fiscal second quarter fee billing collection, we would expect the aggregate of NII and RJ BD P third party fees.
Ratio was 65.4%.
Commencing this quarter, we presented recruiting and retention-related compensation expense in the PCG segments for each reporting period to aid the understanding of the impact of such cost on our business.
The decline is largely due to 2, fewer interests, earning days, in the second fiscal quarter as lower yields. Resulting from the full quarter impact of the recent Fed rate cuts are partially offset by the higher interest earning asset balances, as of the beginning of the quarter.
In the second quarter to be down approximately 3% from the first quarter level.
The decline is largely due to two fewer interest earning days in the second fiscal quarter as lower yields resulting from the full quarter impact of the recent fed rate cuts are partially offset by the higher interest, earning asset balances as of the beginning of the quarter.
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.
Butch Oorlog: Non-compensation expenses of $557 million increased 8% over the year-ago quarter, but decreased 7% sequentially. For the fiscal year, we expect non-compensation expenses, excluding the bank loan loss, provision for credit losses, unexpected legal and regulatory items, and non-GAAP adjustments presented in our non-GAAP financial measures to be approximately $2.3 billion, representing about 8% growth over the same adjusted non-compensation metric for the prior year. Importantly, we will continue to invest to support growth across our businesses while maintaining discipline over controllable expenses. The majority of the projected increase reflects our continued investment in leading technology, supporting our financial advisors, as well as our expectations for overall growth in our businesses.
Non-compensation expenses of $557 million increased 8% over the year-ago quarter, but decreased 7% sequentially. For the fiscal year, we expect non-compensation expenses, excluding the bank loan loss, provision for credit losses, unexpected legal and regulatory items, and non-GAAP adjustments presented in our non-GAAP financial measures to be approximately $2.3 billion, representing about 8% growth over the same adjusted non-compensation metric for the prior year. Importantly, we will continue to invest to support growth across our businesses while maintaining discipline over controllable expenses. The majority of the projected increase reflects our continued investment in leading technology, supporting our financial advisors, as well as our expectations for overall growth in our businesses.
Keep in mind, there are many variables which could influence actual results, including any interest rate actions during the upcoming quarter and factors affecting our balance sheet, including changes in our loan and deposit balances.
Turning to Consolidated expenses on slide 11.
Non-compensation expenses of $557 million increased 8% over the year-ago quarter, but decreased 7% sequentially.
Keep in mind, there are many variables, which could influence actual results, including any interest rate actions during the upcoming quarter and factors affecting our balance sheet, including changes in our loan and deposit balances.
Compensation expense was 2.45 billion dollars and the total compensation ratio for the quarter was 65.6%.
For the fiscal year, we expect non-compensation expenses, excluding the bank loan loss provision for credit losses.
Exclusion related. Compensation expenses, the adjusted compensation ratio was 65.4%
Turning to consolidated expenses on slide 11.
Paul M. Shoukry: So we're seeing more investment in the market versus higher-yielding alternatives, at least over the last couple of quarters as rates started really coming down, which lowers the weighted average mix or the weighted average cost of deposit between sweeps and enhanced savings programs. To answer your question about ongoing long-term growth, I mean, you saw securities-based loans grow close to $2 billion this quarter alone. And so the growth is attractive. That's the flip side of the lower rates. Floating-rate loans become more attractive. And you saw that this past quarter as well. And we'll fund it with the diversified funding sources that we have, both the sweep cash. We have third-party cash that we could redeploy. But also, we have diversified deposit-gathering apparatus, particularly at TriState Capital Bank. And so we'll look at all of those levers to fund future growth going forward.
So we're seeing more investment in the market versus higher-yielding alternatives, at least over the last couple of quarters as rates started really coming down, which lowers the weighted average mix or the weighted average cost of deposit between sweeps and enhanced savings programs. To answer your question about ongoing long-term growth, I mean, you saw securities-based loans grow close to $2 billion this quarter alone. And so the growth is attractive. That's the flip side of the lower rates. Floating-rate loans become more attractive. And you saw that this past quarter as well. And we'll fund it with the diversified funding sources that we have, both the sweep cash. We have third-party cash that we could redeploy. But also, we have diversified deposit-gathering apparatus, particularly at TriState Capital Bank. And so we'll look at all of those levers to fund future growth going forward.
Compensation expense was $2.45 billion and the total compensation ratio for the quarter was 65, 6%.
Unexpected, legal, and regulatory items and non-GAAP adjustments presented in our non-GAAP financial measures to be approximately $2.3 billion, representing about 8% growth over the same adjusted non-compensation metric for the prior year.
Commencing this quarter, we presented recruiting and retention related compensation, expense in the PCG segments for each reporting period to Aid, the understanding of the impact of such costs on our business.
Excluding acquisition related compensation expenses, the adjusted compensation ratio was 65, 4%.
Importantly, we will continue to invest to support growth across our businesses, while maintaining discipline over controllable expenses.
Commencing this quarter, we presented recruiting and retention related compensation expense in the <unk> segment for each reporting period to aid the understanding of the impact of such costs on our business.
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.
Butch Oorlog: This projection, therefore, includes, for example, incremental recruiting-related and transition support costs, which are driven by continued successful recruiting, higher sub-advisory fees which grow as fee-based client assets increase, and FDIC insurance premiums, which grow as the bank segment balance sheet increases. Slide 12 presents the pretax margin trends for the past five quarters. The achievement of our 20% adjusted pretax margin target this quarter, despite the headwinds we experienced of lower interest-related and investment banking revenues, highlights the stability and strength of our diversified businesses to consistently generate strong margins. On Slide 13, at quarter end, our total assets were $88.8 billion, a 1% sequential increase, resulting primarily from loan growth, partially offset by lower corporate cash balances, which declined primarily due to corporate share actions as well as seasonal funding obligations.
This projection, therefore, includes, for example, incremental recruiting-related and transition support costs, which are driven by continued successful recruiting, higher sub-advisory fees which grow as fee-based client assets increase, and FDIC insurance premiums, which grow as the bank segment balance sheet increases. Slide 12 presents the pretax margin trends for the past five quarters. The achievement of our 20% adjusted pretax margin target this quarter, despite the headwinds we experienced of lower interest-related and investment banking revenues, highlights the stability and strength of our diversified businesses to consistently generate strong margins. On Slide 13, at quarter end, our total assets were $88.8 billion, a 1% sequential increase, resulting primarily from loan growth, partially offset by lower corporate cash balances, which declined primarily due to corporate share actions as well as seasonal funding obligations.
The majority of the projected increase reflects our continued investment in leading technology, supporting our financial advisors, as well as our expectations for overall growth in our businesses.
Non-compensation, expenses of 557 million increased 8% over the year ago quarter, but decreased 7% sequentially.
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.
For the fiscal year, we expect non-compensation expenses, excluding the bank loan loss provision for credit losses.
Non compensation expenses of $557 million increased 8% over the year ago quarter, but decreased 7% sequentially.
This projection therefore includes, for example, incremental recruiting-related and transition support costs, which are driven by continued successful recruiting; higher sub-advisory fees, which grow as fee-based client assets increase; and FDIC insurance premiums, which grow as the bank segment's balance sheet increases.
Ben Budish: Okay. Thank you. Thank you for clarifying.
William Katz: Okay. Thank you. Thank you for clarifying.
Slide 12 presents the pre-tax margin trends for the past five quarters.
Butch Oorlog: The next question is from Steven Chubak from Wolfe Research.
Operator: The next question is from Steven Chubak from Wolfe Research.
For the fiscal year, we expect non compensation expenses, excluding the bank loan loss provision for credit losses unexpected legal and regulatory items and non-GAAP adjustments presented in our non-GAAP financial measures to be approximately $2 $3 billion.
Unexpected, legal, and Regulatory items and non-gaap adjustments presented in our non-gaap financial measures to be approximately 2.3 billion dollars, representing about 8% growth over the same adjusted non-compensation metric for the prior year.
Steven Chubak: Hi. Good evening. Thanks for taking my question.
Steven Chubak: Hi. Good evening. Thanks for taking my question.
The achievement of our 20% adjusted pre-tax margin target this quarter, despite the headwinds we experienced from lower interest-related and Investment Banking revenues.
Ben Budish: Hey, Steven.
Benjamin Budish: Hey, Steven.
Steven Chubak: So hey, Paul. So I wanted to drill down into the M&A results and the outlook, recognizing that the pipeline strength you cited. Also acknowledge one quarter does not a trend make. But if I compare for the calendar year, full year 2025 versus 2024 advisory results, the gap between you and peers was quite substantial. I think you guys were down 20%. Peers, big and small, were both up about 20%. And I was hoping you could just speak to any idiosyncratic factors that might have weighed disproportionately on your results, whether it's a function of client or sector mix. And just bigger picture, in the past, you had talked about this $1 billion target in M&A fees based on your current scale. Do you still view that as a credible target? And what actions are you taking to help narrow that gap?
Steven Chubak: So hey, Paul. So I wanted to drill down into the M&A results and the outlook, recognizing that the pipeline strength you cited. Also acknowledge one quarter does not a trend make. But if I compare for the calendar year, full year 2025 versus 2024 advisory results, the gap between you and peers was quite substantial. I think you guys were down 20%. Peers, big and small, were both up about 20%. And I was hoping you could just speak to any idiosyncratic factors that might have weighed disproportionately on your results, whether it's a function of client or sector mix. And just bigger picture, in the past, you had talked about this $1 billion target in M&A fees based on your current scale. Do you still view that as a credible target? And what actions are you taking to help narrow that gap?
Importantly, we will continue to invest to support growth across our businesses, while maintaining discipline over controllable expenses.
Highlights. The stability and strength of our Diversified businesses to consistently generate strong margins.
Renting about 8% growth over the same adjusted non compensation metric for the prior year.
The majority of the projected increase reflects our continued investment in leading technology, supporting our financial advisors, as well, as our expectations. For overall growth in our businesses.
Importantly, we will continue to invest to support growth across our businesses, while maintaining discipline over our controllable expenses.
On slide 13, at quarter end, our total assets were $88.8 billion, a 1% sequential increase resulting primarily from loan growth, partially offset by lower corporate cash balances, which declined primarily due to corporate share actions as well as seasonal funding obligations.
Butch Oorlog: Record bank loans of $53.4 billion grew 13% over the year ago quarter and 4% sequentially, with that loan growth largely in support of our clients. Securities-based loans and residential mortgages represent 60% of our total loan book, reflecting approximately 40% and 20% of the total, respectively. We continue to have strong levels of liquidity and capital. RJF corporate cash at the parent ended the quarter at approximately $3.3 billion, providing excess liquidity of $2.1 billion, well above our $1.2 billion target. Our capital levels provide significant flexibility to continue being opportunistic in our pursuit of strategic acquisitions and to invest in organic growth.
Record bank loans of $53.4 billion grew 13% over the year ago quarter and 4% sequentially, with that loan growth largely in support of our clients. Securities-based loans and residential mortgages represent 60% of our total loan book, reflecting approximately 40% and 20% of the total, respectively. We continue to have strong levels of liquidity and capital. RJF corporate cash at the parent ended the quarter at approximately $3.3 billion, providing excess liquidity of $2.1 billion, well above our $1.2 billion target. Our capital levels provide significant flexibility to continue being opportunistic in our pursuit of strategic acquisitions and to invest in organic growth.
The majority of the projected increase reflects our continued investment in leading technology supporting our financial advisors as well as our expectations for overall growth in our businesses.
this projection therefore includes, for example incremental recruiting related and transition support costs which are driven by continued successful, recruiting higher sub advisory fees which grow as fee-based client assets, increase, and FDIC insurance premiums which grow as the bank's segment balance sheet increases
Record bank loans of $53.4 billion, up 13% over the year ago quarter and 4% sequentially, with that loan growth largely in support of our clients.
This projection. Therefore includes for example, incremental recruiting related and transition support cost, which are driven by continued successful recruiting higher sub advisory fees, which grow as fee based client assets increase in FDIC insurance premiums, which grow as the bank segment balance.
Slide 12 presents the pre-tax margin trends for the past, 5 quarters.
The achievement of our 20%, adjusted pre-tax margin Target this quarter, despite the headwinds we experience a lower interest related and Investment Banking revenues.
Paul M. Shoukry: Yeah. I mean, we're adding a lot of MDs and have been adding a lot of MDs and high-quality MDs in investment banking across various sectors over the last several years. So in terms of comparison, it really is hard to compare apples to apples. You mentioned the bigger firms. Last year was a better year for public company M&A, bolt-to-bracket M&A. And that's, as you know, not a space that we really compete or play in. So when you compare mid-market growth-oriented firms to the public company firms, for the year overall last year, the public company M&A, the bolt-to-bracket M&A definitely led the way in the recovery. And that's not atypical if you look at history, where both on the way up and on the way down, it seems like public company M&A sort of leads the way.
Paul M. Shoukry: Yeah. I mean, we're adding a lot of MDs and have been adding a lot of MDs and high-quality MDs in investment banking across various sectors over the last several years. So in terms of comparison, it really is hard to compare apples to apples. You mentioned the bigger firms. Last year was a better year for public company M&A, bolt-to-bracket M&A. And that's, as you know, not a space that we really compete or play in. So when you compare mid-market growth-oriented firms to the public company firms, for the year overall last year, the public company M&A, the bolt-to-bracket M&A definitely led the way in the recovery. And that's not atypical if you look at history, where both on the way up and on the way down, it seems like public company M&A sort of leads the way.
Securities-based loans and residential mortgages represent 60% of our total loan book, reflecting approximately 40% and 20% of the total, respectively.
We continue to have strong levels of liquidity and capital.
Highlights. The stability and strength of our Diversified businesses to consistently generate strong margins.
Sheet increases.
Slide 12 presents the pretax margin trends for the past five quarters.
The achievement of our 20% adjusted pre tax margin target this quarter. Despite the headwinds we experienced a lower interest related and investment banking revenues highlights the stability and strength of our diversified businesses to consistently generate strong margins.
Our JF corporate cash at the parent ended the quarter at approximately $3.3 billion, providing excess liquidity of $2.1 billion, well above our $1.2 billion target.
On slide 13 at quarter end. Our total assets were 88.8 billion. A 1% sequential increase resulting, primarily from loan growth partially offset by lower corporate cash. Balances which declined, primarily due to corporate share actions as well as seasonal funding obligations.
Butch Oorlog: With a Tier 1 Leverage Ratio of 12.7% and a total capital ratio of 24.3%, we remain well above regulatory requirements, with approximately $2.4 billion of excess capital capacity to deploy before reaching our targeted Tier 1 capital ratio of 10%. The effective tax rate for the quarter was 22.7%, reflecting a seasonal tax benefit arising from share-based compensation that settled during the quarter. Looking ahead, we continue to estimate our effective tax rate for fiscal 2026 to be approximately 24% to 25%. Slide 14 provides a summary of our capital actions over the past five quarters. Through the combination of common dividends paid and share repurchases, we returned $511 million of capital to shareholders during the quarter....
With a Tier 1 Leverage Ratio of 12.7% and a total capital ratio of 24.3%, we remain well above regulatory requirements, with approximately $2.4 billion of excess capital capacity to deploy before reaching our targeted Tier 1 capital ratio of 10%. The effective tax rate for the quarter was 22.7%, reflecting a seasonal tax benefit arising from share-based compensation that settled during the quarter. Looking ahead, we continue to estimate our effective tax rate for fiscal 2026 to be approximately 24% to 25%. Slide 14 provides a summary of our capital actions over the past five quarters. Through the combination of common dividends paid and share repurchases, we returned $511 million of capital to shareholders during the quarter....
Our Capital levels, provide significant flexibility to continue being opportunistic in our pursuit of strategic Acquisitions and to invest in organic growth.
On slide 13 at quarter end, our total assets were $88 $8 billion, a 1% sequential increase resulting primarily from loan growth, partially offset by lower corporate cash balances, which declined primarily due to corporate share actions as well as seasonal.
Record bank loans of 53.4 billion dollars. Grew 13% over the year ago quarter and 4% sequentially with that loan. Growth largely in support of our clients.
Paul M. Shoukry: Then every firm, even on the regional side or the growth-oriented side, has different strengths in sectors. The depository sectors, some firms have long-standing deep businesses in depositories, for example, which has really seen a pickup in the new administration approving deals. You kind of have to go sector by sector. But we feel very confident with our expertise, with the sectors that we are very good in, in our pipelines. So I hate to compare things quarter to quarter. There's some quarters we do a lot better. We tell you, "Don't over-index that because it's timing." I would tell you, in this type of quarter where we're doing worse, then I would say, "Don't over-index that either." Investment Banking is not a recurring revenue business, as you know, as the Private Client Group business is.
Then every firm, even on the regional side or the growth-oriented side, has different strengths in sectors. The depository sectors, some firms have long-standing deep businesses in depositories, for example, which has really seen a pickup in the new administration approving deals. You kind of have to go sector by sector. But we feel very confident with our expertise, with the sectors that we are very good in, in our pipelines. So I hate to compare things quarter to quarter. There's some quarters we do a lot better. We tell you, "Don't over-index that because it's timing." I would tell you, in this type of quarter where we're doing worse, then I would say, "Don't over-index that either." Investment Banking is not a recurring revenue business, as you know, as the Private Client Group business is.
With a tier 1, leverage ratio of 12.7% and a total Capital ratio of 24.3%, we remain. Well, above regulatory requirements with approximately 2.4 billion dollars of excess Capital capacity to deploy before reaching our targeted. Tier 1 Capital ratio of 10%
Funding obligations.
Record bank loans of $53 $4 billion grew 13% over the year ago quarter, and 4% sequentially with that loan growth largely in support of our clients.
Space loans and a Residential Mortgages represent 60% of our total loan book reflecting approximately 40% and 20% of the total respectively.
We continue to have strong levels of liquidity and capital.
The effective tax rate for the quarter was 22.7%, reflecting a seasonal tax benefit arising from share-based compensation that settled during the quarter.
Securities based loans and residential mortgages represent 60% of our total loan book, reflecting approximately 40% and 20% of the total respectively.
rjf corporate cash at the parent end of the quarter at approximately 3.3 billion dollars, providing excess liquidity of 2.1 billion, well above our 1.2 billion Target
Looking ahead, we continue to estimate our effective tax rate for fiscal 2026 to be approximately 24 to 25%.
Slide 14 provides a summary of our capital actions over the past five quarters.
We continue to have strong levels of liquidity and capital.
Our Capital levels, provide significant flexibility to continue being opportunistic in our pursuit of strategic Acquisitions and to invest in organic growth.
R. J F corporate cash at the parent ended the quarter at approximately $3 $3 billion, providing excess liquidity of $2 $1 billion well above our 1.2 billion dollar target.
Through the combination of common dividends paid and share repurchases, we returned, 511 million of capital to shareholders during the quarter.
Butch Oorlog: In January, the firm opportunistically redeemed all of its outstanding shares of its Series B preferred stock for an aggregate redemption value of $81 million, which reduces Tier 1 capital in the fiscal Q2. Taking this capital action into consideration, we expect to target approximately $400 million of common share repurchases again in the fiscal Q2. Over the past 12 months, we have repurchased $1.45 billion of common shares, and including dividends paid, we have returned nearly $1.87 billion of capital to common shareholders, reflecting a combined return of 89% of our earnings. We maintain our long-term commitment to operating our businesses at capital levels consistent with established targets. I'll now turn the call back to Paul for his final remarks.
In January, the firm opportunistically redeemed all of its outstanding shares of its Series B preferred stock for an aggregate redemption value of $81 million, which reduces Tier 1 capital in the fiscal Q2. Taking this capital action into consideration, we expect to target approximately $400 million of common share repurchases again in the fiscal Q2. Over the past 12 months, we have repurchased $1.45 billion of common shares, and including dividends paid, we have returned nearly $1.87 billion of capital to common shareholders, reflecting a combined return of 89% of our earnings. We maintain our long-term commitment to operating our businesses at capital levels consistent with established targets. I'll now turn the call back to Paul for his final remarks.
Paul M. Shoukry: So you really do have to look at long-term trends. And if you look at our long-term trend and growth of investment banking over the last 5 to 7 years, which we'll highlight again on our analyst investor day, it's been very strong and attractive relative to our peers.
So you really do have to look at long-term trends. And if you look at our long-term trend and growth of investment banking over the last 5 to 7 years, which we'll highlight again on our analyst investor day, it's been very strong and attractive relative to our peers.
Our capital levels provides significant flexibility to continue being opportunistic in our pursuit of strategic acquisitions and to invest in organic growth.
Aggregate redemption value of $81 million, which reduces Tier 1 capital in the fiscal second quarter.
With a tier 1, leverage ratio of 12.7% and a total Capital ratio of 24.3%, we remain. Well, above regulatory requirements with approximately 2.4 billion dollars of excess Capital capacity to deploy before reaching our targeted. Tier 1 Capital ratio of 10%
With a tier one leverage ratio of 12, 7%.
Steven Chubak: So thanks for that. And Paul, I'd like you to squeeze into, let's call them, more ticky-tack modeling questions. Non-comps have grown double-digit the last three years. The 8% guide is encouraging, reflects some moderation in growth. Just given the commitment to investing, do you feel like you can continue to hold the line and bend the cost curve on non-comps? And I'll just mention the other one now. The N&A growth was impressive. The AUM growth admittedly lagged our expectations given strong organic flows and market appreciation. And I was hoping you could speak to why that better N&A flow rate didn't necessarily translate into as strong AUM conversion, which I know can happen from time to time.
So thanks for that. And Paul, I'd like you to squeeze into, let's call them, more ticky-tack modeling questions. Non-comps have grown double-digit the last three years. The 8% guide is encouraging, reflects some moderation in growth. Just given the commitment to investing, do you feel like you can continue to hold the line and bend the cost curve on non-comps? And I'll just mention the other one now. The N&A growth was impressive. The AUM growth admittedly lagged our expectations given strong organic flows and market appreciation. And I was hoping you could speak to why that better N&A flow rate didn't necessarily translate into as strong AUM conversion, which I know can happen from time to time.
And a total capital ratio of 24, 3%, we remain well above regulatory requirements with approximately $2 $4 billion of excess capital capacity to deploy before reaching our targeted tier one capital ratio of 10%.
Taking this capital action into consideration, we expect to target approximately $400 million of common share repurchases again in the fiscal second quarter.
The effective tax rate for the quarter was 22.7%, reflecting a seasonal, tax benefit arising, from share-based compensation that settled during the quarter.
Look in your head, we continue to estimate our effective tax rate for fiscal 2026 to be approximately 24 to 25%.
The effective tax rate for the quarter was 22, 7%, reflecting a seasonal tax benefit arising from share based compensation that settled during the quarter.
Slide 14 provides a summary of our Capital actions over the past 5 quarters.
Over the past 12 months, we have repurchased $1.45 billion of common shares, and including dividends paid, we have returned nearly $1.87 billion of capital to common shareholders, reflecting a combined return of 89% of our earnings.
Through the combination of common dividends paid and share repurchases, we returned, 511 million of capital to shareholders during the quarter.
Looking ahead, we continue to estimate our effective tax rate for fiscal 2026 to be approximately 24% to 25%.
We maintain our long-term commitment to operating in our businesses at capital levels consistent with established targets.
Paul Shoukry: Thank you, Butch. In summary, we are off to a strong start in fiscal 2026, and I believe we are very well positioned entering Q2 with record client assets and strong competitive positioning across all of our businesses. Financial advisor recruiting activity remains strong, and the investment banking pipeline is robust. Near term, there are headwinds, with lower interest rates and seasonal impacts typical in Q2, with fewer billing days in the quarter and payroll taxes resetting at the beginning of the calendar year. However, that doesn't distract us from our focus on generating long-term sustainable growth. While in some ways there's more competition in our space, we are confident that our established approach and focus on the power of personal is setting us apart in our industry more than ever.
Paul Shoukry: Thank you, Butch. In summary, we are off to a strong start in fiscal 2026, and I believe we are very well positioned entering Q2 with record client assets and strong competitive positioning across all of our businesses. Financial advisor recruiting activity remains strong, and the investment banking pipeline is robust. Near term, there are headwinds, with lower interest rates and seasonal impacts typical in Q2, with fewer billing days in the quarter and payroll taxes resetting at the beginning of the calendar year. However, that doesn't distract us from our focus on generating long-term sustainable growth. While in some ways there's more competition in our space, we are confident that our established approach and focus on the power of personal is setting us apart in our industry more than ever.
I'll now turn the call back to Paul for his final remarks.
Slide 14 provides a summary of our capital actions over the past five quarters.
Paul M. Shoukry: Yeah. Let me take the last part of the question first. And then I'll have Butch touch on your first part of the question on the cost curve. But it is a good question around AUA because I was comparing our overall AUA and flows to some of the others that reported. And I think really where you see that relationship makes sense is if you look at our fee-based assets. And the fee-based assets were up 19%, which if you compare it to the other firms that reported and their net new assets, you would see the relationship that you're expecting. So I would kind of look at that as a proxy for fee-based assets versus overall firm-wide AUA. And I'll have Butch talk about the non-comp trajectory. Yeah.
Yeah. Let me take the last part of the question first. And then I'll have Butch touch on your first part of the question on the cost curve. But it is a good question around AUA because I was comparing our overall AUA and flows to some of the others that reported. And I think really where you see that relationship makes sense is if you look at our fee-based assets. And the fee-based assets were up 19%, which if you compare it to the other firms that reported and their net new assets, you would see the relationship that you're expecting. So I would kind of look at that as a proxy for fee-based assets versus overall firm-wide AUA. And I'll have Butch talk about the non-comp trajectory. Yeah.
Through the combination of common dividends paid and share repurchases, we returned $511 million of capital to shareholders during the quarter.
In January the firm opportunistically redeemed, all of its outstanding shares of its series, B, preferred stock for an aggregate Redemption value of 81 million which reduces Tier 1, capital in the fiscal, second quarter.
Thank you. But in summary, we are off to a strong start in fiscal 2026, and I believe we are very well positioned entering the second quarter, with record client assets and strong competitive positioning across all of our businesses.
In January the firm Opportunistically redeemed all of its outstanding shares of its series B preferred stock for an aggregate redemption value of $81 million, which reduces tier one capital in the fiscal second quarter.
Taking this Capital action into consideration. We expect to Target approximately 400 million dollars of common share repurchases again in the fiscal second quarter.
Financial advisor recruiting activity, remains strong in the investment banking pipeline is robust.
Near-term, there are headwinds with lower interest rates and seasonal impacts typical in the second fiscal quarter, with fewer billing days in the quarter and payroll taxes resetting at the beginning of the calendar year.
Taking this capital action into consideration, we expect to target approximately $400 million of common share repurchases again in the fiscal second quarter.
Over the past 12 months, we have repurchased 1.45 billion dollars of common shares and including dividends paid. We have returned nearly 1.87 billion dollars of capital to Common shareholders, reflecting a combined return of 89% of our earnings.
However, that doesn't distract us from our focus on generating long-term sustainable growth.
While, in some ways, there's more competition in our space.
Paul M. Shoukry: So with respect to the non-comp expenses, technology and our continued investment in our leading technology in support of financial advisors just continues to be an area of emphasis. So as we continue to manage those non-comp expense levels, we're going to continue to invest in that technology. It's part of our unique culture and our unique value proposition at Raymond James. And so we have to balance continued growth in that expense against continuing to achieve that key objective. So the majority of that increase year-over-year is for technology. And as a growth company, we still have other expense elements that vary directly with our successful growth, both in terms of M&A. We've mentioned the recruiting expenses and the incremental expenses that come with successful M&A.
So with respect to the non-comp expenses, technology and our continued investment in our leading technology in support of financial advisors just continues to be an area of emphasis. So as we continue to manage those non-comp expense levels, we're going to continue to invest in that technology. It's part of our unique culture and our unique value proposition at Raymond James. And so we have to balance continued growth in that expense against continuing to achieve that key objective. So the majority of that increase year-over-year is for technology. And as a growth company, we still have other expense elements that vary directly with our successful growth, both in terms of M&A. We've mentioned the recruiting expenses and the incremental expenses that come with successful M&A.
Over the past 12 months, we have repurchased $1.45 billion of common shares and including dividends paid we have returned nearly $1.87 billion of capital to common shareholders, reflecting a combined return of 89% of our earnings.
We maintain our long-term commitment to operating in our businesses at Capital levels consistent with established targets.
I'll now turn the call back to Paul for his final remarks.
We are confident that our established approach and focus on the power of personal is setting us apart in our industry more than ever.
Paul Shoukry: We are focused on the long term and providing a stable platform for our advisors, bankers, and associates with a foundation of deeply personal relationships. We attract and retain financial advisors with our unique culture, leading service, and robust platform. We value independence to foster an environment where our advisors can provide objective advice to their clients. We are focused on sustainable growth and quality over quantity. We strive to maintain a strong balance sheet with strong levels of capital and liquidity and a conservative amount of leverage. We are confident our long-standing approach will continue to endure in both good times and more challenging times, and help us deliver on our vision of being the absolute best firm for financial professionals and their clients.
We are focused on the long term and providing a stable platform for our advisors, bankers, and associates with a foundation of deeply personal relationships. We attract and retain financial advisors with our unique culture, leading service, and robust platform. We value independence to foster an environment where our advisors can provide objective advice to their clients. We are focused on sustainable growth and quality over quantity. We strive to maintain a strong balance sheet with strong levels of capital and liquidity and a conservative amount of leverage. We are confident our long-standing approach will continue to endure in both good times and more challenging times, and help us deliver on our vision of being the absolute best firm for financial professionals and their clients.
We are focused on the long-term and providing a stable platform for our advisors bankers and Associates with a foundation of deeply personal relationships.
We maintain our long term commitment to operating our businesses at capital levels consistent with established targets.
Thank you, bud in summary. We are off to a strong start in fiscal 2026 and I believe we are very well positioned entering the second quarter with record client assets and strong competitive positioning across all of our businesses.
We attract and retain financial advisors with our unique culture, leading service, and robust platform.
I'll now turn the call back to Paul for his final remarks.
Financial advisor recruiting activity, remains strong in the investment banking pipeline is robust.
Thank you Budd in summary, we are off to a strong start in fiscal 2026, and I believe we are very well positioned entering the second quarter with record client assets and strong competitive positioning across all of our businesses.
We value independence to foster an environment where our advisors can provide objective advice to their clients.
We are focused on sustainable growth and quality over quantity.
Near-term. There are headwinds with lower interest rates and seasonal impacts typical in the second fiscal quarter with fewer billing days in the quarter and payroll taxes. Resetting at the beginning of the calendar year.
We strive to maintain a strong balance sheet with strong levels of capital and liquidity in a conservative amount of Leverage.
Financial adviser recruiting activity remains strong and the investment banking pipeline is robust.
However, that doesn't distract us from our focus on generating long-term sustainable growth.
While, in some ways, there's more competition in our space.
Near term there are headwinds with lower interest rates and seasonal impacts typical in the second fiscal quarter with fewer billing days in the quarter and payroll taxes resetting at the beginning of the calendar year.
Paul M. Shoukry: But also, as we grow our balance sheet, we also have growth expenses that come with the growth in the balance sheet. So as we think about the objective, we remain committed to increasing and improving our operating leverage over time. We believe we have to continue to have the scale to do that. And so we're focused on our operating margin and continuing to pursue opportunities to grow that operating margin over the long term.
But also, as we grow our balance sheet, we also have growth expenses that come with the growth in the balance sheet. So as we think about the objective, we remain committed to increasing and improving our operating leverage over time. We believe we have to continue to have the scale to do that. And so we're focused on our operating margin and continuing to pursue opportunities to grow that operating margin over the long term.
We are confident our long-standing approach will continue to endure in both good times and more challenging times, and help us deliver on our vision of being the absolute best firm for financial professionals and their clients.
Paul Shoukry: So I want to thank our advisors, bankers, and associates for the great service and advice they provide to their clients in delivering on our firm's mission to help clients achieve their financial objectives. That concludes our prepared remarks. Operator, will you please open the line with questions?
So I want to thank our advisors, bankers, and associates for the great service and advice they provide to their clients in delivering on our firm's mission to help clients achieve their financial objectives. That concludes our prepared remarks. Operator, will you please open the line with questions?
We are confident that our established approach and focus on the power of personal is setting us apart in our industry, more than ever.
However that doesn't distract us from our focus on generating long term sustainable growth.
So I want to thank our advisors, bankers, and associates for the great service and advice they provide to their clients, and for delivering on our firm's mission to help clients achieve their financial objectives.
We are focused on the long-term and providing a stable platform for our advisors bankers and Associates with a foundation of deeply personal relationships.
While in some ways Theres more competition in our space. We are confident that our established approach and focus on the power of personal is setting us apart in our industry more than ever.
That concludes our prepared, remarks operator, will you please open the line with questions?
Operator: Thank you. And everyone, if you would like to ask a question today, please press star one on your touchtone telephone. We do ask that you limit yourselves to one question and one follow-up. Once again, that is star one to ask a question. We'll go first to Michael Cho from JP Morgan.
Operator: Thank you. And everyone, if you would like to ask a question today, please press star one on your touchtone telephone. We do ask that you limit yourselves to one question and one follow-up. Once again, that is star one to ask a question. We'll go first to Michael Cho from JP Morgan.
We attract and retain financial advisors with our unique culture, leading service, and robust platform.
Thank you.
Steven Chubak: Okay. It's a great color. And thanks for accommodating the additional question.
Steven Chubak: Okay. It's a great color. And thanks for accommodating the additional question.
We Value Independence to Foster an environment where our advisors can provide objective advice to their clients.
We are focused on the long term and providing a stable platform for our advisers bankers and associates with a foundation of deeply personal relationships.
We are focused on sustainable growth and quality over quantity.
Paul M. Shoukry: Our pleasure.
Paul M. Shoukry: Our pleasure.
Butch Oorlog: We will take the next question today from Alex Blostein from Goldman Sachs.
Operator: We will take the next question today from Alex Blostein from Goldman Sachs.
And everyone, if you would like to ask a question today, please press star 1 on your touchtone telephone. We do ask that you limit yourselves to one question and one follow-up. Once again, that is star 1 to ask a question. We'll go first to Michael Cho from JP Morgan.
Michael Cho: Hi, good evening, Paul and Butch. Thanks for taking my question. Just want to start on net new assets. It's been seeing a pretty nice acceleration over the last several quarters, hit 8% this quarter. I mean, are there areas that, you know, saw any particular strength this quarter? And if you look back, you know, maybe over the last four quarters, I mean, what, what segment or, or tweaks in, in Raymond James' approach do you think has been supporting that acceleration, and, and how would you frame that pipeline, you know, today relative to, to the, you know, past couple quarters?
Michael Cho: Hi, good evening, Paul and Butch. Thanks for taking my question. Just want to start on net new assets. It's been seeing a pretty nice acceleration over the last several quarters, hit 8% this quarter. I mean, are there areas that, you know, saw any particular strength this quarter? And if you look back, you know, maybe over the last four quarters, I mean, what, what segment or, or tweaks in, in Raymond James' approach do you think has been supporting that acceleration, and, and how would you frame that pipeline, you know, today relative to, to the, you know, past couple quarters?
We attract and retain financial advisers with a unique culture, leading service and robust platform.
We strive to maintain a strong balance sheet with strong levels of capital and liquidity in a conservative amount of Leverage.
Michael Ahn: Good evening, guys. This is Michael Ahn for Alex. Maybe back to the non-comp growth that you guys are laying out for '26. So you mentioned this year will include further investments in tech and supportive recruiting efforts as well. Can you maybe elaborate on what specifically is going into that growth this year? I'll stop there.
Michael Ahn: Good evening, guys. This is Michael Ahn for Alex. Maybe back to the non-comp growth that you guys are laying out for 2026. So you mentioned this year will include further investments in tech and supportive recruiting efforts as well. Can you maybe elaborate on what specifically is going into that growth this year? I'll stop there.
We value independents to foster an environment, where our advisers can provide objective advice to their clients.
Hi, good evening, Paul and Butch. Thanks for taking my question. Um, just want to start on net new assets. I've been seeing a pretty nice acceleration over the last
We are confident our long-standing approach will continue to endure in both good times and more challenging times and help us deliver on our vision of being the absolute best firm for financial professionals and their clients.
We're focused on sustainable growth and quality over quantity.
We strive to maintain a strong balance sheet with strong levels of capital and liquidity and a conservative amount of leverage.
Paul M. Shoukry: Yeah. I mean, if you look just at our investment in cybersecurity firms, the growth of AI investments and the development that we're doing with applications across all of our businesses, the infrastructure investment, there's a lot that goes into it. And that's why I was saying earlier, it's just harder and harder for smaller firms to remain independent and competitive without being able to invest $1 billion a year in technology. We recruited advisors from another great firm culturally. And they came over. And six months later, they said, "We didn't realize it until we made the move over. But we were basically on DOS prompt at our prior firm." And they're just not able to necessarily keep up with the technology. And it's nothing inherently wrong with the other firm. It's just you have to have scale and critical mass to make those investments.
Paul M. Shoukry: Yeah. I mean, if you look just at our investment in cybersecurity firms, the growth of AI investments and the development that we're doing with applications across all of our businesses, the infrastructure investment, there's a lot that goes into it. And that's why I was saying earlier, it's just harder and harder for smaller firms to remain independent and competitive without being able to invest $1 billion a year in technology. We recruited advisors from another great firm culturally. And they came over. And six months later, they said, "We didn't realize it until we made the move over. But we were basically on DOS prompt at our prior firm." And they're just not able to necessarily keep up with the technology. And it's nothing inherently wrong with the other firm. It's just you have to have scale and critical mass to make those investments.
So I want to thank our advisors bankers and Associates for the great service and advice. They provide to their clients and delivering on our firm's mission to help clients achieve their financial objectives.
We are confident our long standing approach will continue to endure in both good times and more challenging times and help us deliver on our vision of being the absolute best firm for a financial professionals and their clients.
Several Quarters at 8%, this quarter? I mean, are there areas that you know saw any particular strength this quarter? And if you look back, you know, maybe over the last 4 quarters. I mean what what segments or or tweaks and and Raymond James is approached, do you think has been supporting that acceleration and and how would you friend that pipeline? You know, today relative to to the you know, past couple quarters
Paul Shoukry: Thanks, Michael. Yeah, $31 billion of net new assets in the quarter will be our, would be our second-best quarter ever, just to put that in perspective. So as I've been messaging last few quarters here, the recruiting activity is robust. It's broad-based across our affiliation options, maybe more heavily tilted in the last six months on the independent contractor side of the business. But really what's resonating now is what's really always resonated. We've kind of consistently been a leading destination for financial advisors in the industry. And more importantly, the retention of our existing advisors remains very strong. Yeah, there are more competitive pressures now with private equity-backed roll-ups and that sort of thing.
Paul Shoukry: Thanks, Michael. Yeah, $31 billion of net new assets in the quarter will be our, would be our second-best quarter ever, just to put that in perspective. So as I've been messaging last few quarters here, the recruiting activity is robust. It's broad-based across our affiliation options, maybe more heavily tilted in the last six months on the independent contractor side of the business. But really what's resonating now is what's really always resonated. We've kind of consistently been a leading destination for financial advisors in the industry. And more importantly, the retention of our existing advisors remains very strong. Yeah, there are more competitive pressures now with private equity-backed roll-ups and that sort of thing.
Prepared. Remarks operator, will you please open the line with questions?
So I want to thank our advisers bankers and associates for the great service and advice they provide to their clients and delivering on our firm's mission to help clients achieve their financial objectives.
To 1 question and 1 follow-up once again, that is star 1 to ask a question. We'll go first to Michael Cho from JP Morgan.
That concludes our prepared remarks, operator will you. Please open the line with questions.
And everyone. If he would like to ask a question today. Please press star one on your head count.
Hi, good evening, Paul. And B. Thanks for taking my question. Um just want to start on net new assets. It's uh been seen a pretty nice acceleration over the last
Self to one question and one follow up once again that is star one to ask a question. We will go first to Michael Cho from Jpmorgan.
Paul M. Shoukry: And so as Butch said, we're going to continue focusing on technology. I do think long-term, especially with AI, we will find more efficiencies in the cost structure as we deploy AI and automation. We're not going to dimension that or even put a timetable on that now because it's still early innings. But we're starting to see some great benefits already. I mean, we just launched RAI. We had a press release that came out, RAI, short for kind of Raymond James, a play on that. But it's a natural language sort of Q&A model, if you will, that uses generative AI to answer questions for advisors and their sales assistants and their teams. That way, they don't even have to call in. And that's going to create efficiencies for them. That's going to allow our service people to spend their time on higher-value problems and solutions and opportunities.
And so as Butch said, we're going to continue focusing on technology. I do think long-term, especially with AI, we will find more efficiencies in the cost structure as we deploy AI and automation. We're not going to dimension that or even put a timetable on that now because it's still early innings. But we're starting to see some great benefits already. I mean, we just launched RAI. We had a press release that came out, RAI, short for kind of Raymond James, a play on that. But it's a natural language sort of Q&A model, if you will, that uses generative AI to answer questions for advisors and their sales assistants and their teams. That way, they don't even have to call in. And that's going to create efficiencies for them. That's going to allow our service people to spend their time on higher-value problems and solutions and opportunities.
Hi, good evening thanks.
Thanks for taking my question.
Paul Shoukry: But really, the 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 independence and their book ownership, the book ownership they have of their clients. And coupling that with the platform, the technology, we're investing close to $1.1 billion this year, the AI to support that, to help them save time, to help them make better decisions, to help them be more efficient in their operations with their clients, and then the products. And so having the culture and the products and the platform and the technology is really differentiating us more than ever.
But really, the 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 independence and their book ownership, the book ownership they have of their clients. And coupling that with the platform, the technology, we're investing close to $1.1 billion this year, the AI to support that, to help them save time, to help them make better decisions, to help them be more efficient in their operations with their clients, and then the products. And so having the culture and the products and the platform and the technology is really differentiating us more than ever.
Just wanted to start on net new assets and claim a pretty nice acceleration of it a lot.
Several quarter or at 8%, this quarter. I mean, are there areas that you know, saw any particular strength this quarter? And if you look back, you know, maybe over the last 4 quarters. I mean, what what segments or or tweaks in in Raymond James's approach, do you think it's been supporting that acceleration and how much friend that pipeline, you know, today relative to to the, you know, the past couple quarters?
Several quarters at 8% this quarter and in other areas, but.
Any particular strength this quarter and if you look back maybe over the last four quarters, and what segment or take spin and Raymond James apology.
Supporting that acceleration.
That pipeline today relative to that.
Thanks Michael. Yeah. 31 billion of net. New Assets in the quarter will be our would be our second best quarter ever. Um just to put that in perspective. So as I've been uh messaging uh last few Quarters here, the recruiting activity is robust. Uh it's broad-based across our affiliation options. Uh,
Couple of quarters.
Thanks, Michael Yes, 31 billion net new assets in the quarter will be our so it would be our second best quarter ever just to put that in perspective, so as I have been messaging.
Maybe more heavily tilted in the last 6 months than the independent contractor side of the business. But really, what's resonating now is what's really always resonated? We've kind of consistently been a leading, uh, destination for financial advisors in the industry.
Last few quarters here the recruiting activity.
Paul Shoukry: And the power personal, the value proposition that we released with our annual report, several weeks ago, is increasingly differentiating as well. You know, other firms are talking about IRRs and exit periods in 3 to 5 years, or funnels and all sorts of impersonal things. And what we're doing in that world-
And the power personal, the value proposition that we released with our annual report, several weeks ago, is increasingly differentiating as well. You know, other firms are talking about IRRs and exit periods in 3 to 5 years, or funnels and all sorts of impersonal things. And what we're doing in that world-
Satisfaction—uh, is that the highest it’s been since, I think, 2014? Uh, and really having a platform where advisors feel like there’s a culture that, uh, really respects the independence and their book ownership—the book ownership they have of their clients—and coupling that with the platform, the technology. We’re investing, uh, close to $1.1 billion this year. Uh, the AI, uh, to support that, to help them save time, to help them make better decisions, to help them be more efficient in their operations with their clients, and then the products. Uh, and so, having the culture, and the products, and the platform, and the technology, uh, is really differentiating us more than ever.
It's broad based across our affiliation options.
Paul M. Shoukry: So again, we're not even in the first inning of those opportunities going forward. But it's important that we have the critical mass and the expertise to make the investments to take advantage of those opportunities over the medium term and long term.
So again, we're not even in the first inning of those opportunities going forward. But it's important that we have the critical mass and the expertise to make the investments to take advantage of those opportunities over the medium term and long term.
Maybe more heavily tilted in the last six months in the independent contractor side of the business.
Uh and and more, more importantly the retention of our existing advisors remains very strong. Uh yeah they're more competitive pressures now uh with private Equity backed Roll-Ups and that sort of thing. Um,
Really what's resonating now is what really always resonated with Canada.
<unk> consistently been a leading destination for financial advisers in the industry.
Paul Shoukry: ... of what I call noisy competition, is really doubling and tripling down on what we've always done, which is really focusing on the personal relationships with financial advisors and giving them tools and resources to strengthen the personal relationships that they have with their clients. And that's really resonating with advisors, both our existing advisors and prospective advisors, which is driving our consistent, consistently leading recruiting activity.
... of what I call noisy competition, is really doubling and tripling down on what we've always done, which is really focusing on the personal relationships with financial advisors and giving them tools and resources to strengthen the personal relationships that they have with their clients. And that's really resonating with advisors, both our existing advisors and prospective advisors, which is driving our consistent, consistently leading recruiting activity.
Michael Ahn: That's helpful. Thanks. Maybe one modeling question. When you guys originally increased the kind of cadence of the share repurchases, I think the original range was $400 to 500 million a quarter. It seems the past couple of quarters has been closer to like $350 to 400 range, including the target for the fiscal second. Can you kind of walk through the rationale? Is that because you guys are allocating capital to other things? Is the target going to remain $400 to 500? Or is $400 a better run rate for the rest of the year?
Michael Ahn: That's helpful. Thanks. Maybe one modeling question. When you guys originally increased the kind of cadence of the share repurchases, I think the original range was $400 to 500 million a quarter. It seems the past couple of quarters has been closer to like $350 to 400 range, including the target for the fiscal second. Can you kind of walk through the rationale? Is that because you guys are allocating capital to other things? Is the target going to remain $400 to 500? Or is $400 a better run rate for the rest of the year?
And more importantly, the retention of our existing advisors remains very strong there.
Theyre more competitive pressures now with private equity backed and that sort of things, but really the retention of our existing advisors the advisor satisfaction.
Really the retention of our existing advisors the advisor satisfaction, uh, is the highest it's been since I think 2014, uh, and really having a platform where advisors feel like, there's a culture that, uh, really respects the independence, and their book ownership, the book ownership, they have of their clients, and coupling that with the platform, the technology for investing, uh, close to 1.1 billion dollars this year.
The highest it's been since I think 2014.
And really having a platform where advisers feel like there's a culture that really respected independence in their book ownership hook ownership they have of their clients and coupling that with the platform the technology we've been investing.
And the power, personal the value proposition that we released with our annual report. Uh, several weeks ago. Uh is increasingly differentiating as well. You know other uh firms are talking about irrs and exit periods and 3 to 5 years or funnels and all sorts of impersonal things and what we're doing in that world uh of what I've called, noisy competition is really doubling and tripling down on what we've always done, which is really focusing on the personal relationships with financial advisors and giving them tools and resources to strengthen the personal relationships that they have with their clients. And that's really resonating with advisors, both our existing advisors and prospective advisors, which is driving. Our consistent, uh, consistently leading recruiting
Activity.
Michael Cho: Great. Thanks for all that color, Paul. If I could just quickly follow up on a modeling question, just on expenses. Sorry if I missed it. Just anything, was there anything to call out in terms of comp expense or comp ratio during the quarter? And I know it's typically build seasonally from here. I think, you know, Paul, you mentioned the payroll taxes, but how should we think about kind of modeling in terms of comp ratio, you know, whether, you know, into fiscal second quarter or even the fiscal 2026? Thanks.
Michael Cho: Great. Thanks for all that color, Paul. If I could just quickly follow up on a modeling question, just on expenses. Sorry if I missed it. Just anything, was there anything to call out in terms of comp expense or comp ratio during the quarter? And I know it's typically build seasonally from here. I think, you know, Paul, you mentioned the payroll taxes, but how should we think about kind of modeling in terms of comp ratio, you know, whether, you know, into fiscal second quarter or even the fiscal 2026? Thanks.
The AI, uh, to support that to help them save time to help them. Make better decisions to help them be more efficient in their operations, for their clients, uh, and then the products. Uh, and so, having the culture, and the products, and the platform and the
Paul M. Shoukry: Yeah. So as you noted, we did repurchase $400 million in this most recent quarter, which was within the guidelines, the guidance that we had provided. And we have indicated an expectation that we'll repurchase at the $400 million levels, what we're targeting for this current quarter. And keep in mind that we just had another capital deployment action this quarter where we redeemed $80 million of preferred equity. That has the same effect on Tier 1 capital as a share repurchase. It doesn't have the same EPS effect as a share repurchase. So I would say we're deploying in capital actions this quarter, targeting $480 million of activity. And going forward, we remain committed to that $400 to 500 quarterly level going forward as we continue to monitor our Tier 1 leverage ratio until such time that we've deployed it in our other priorities.
Paul M. Shoukry: Yeah. So as you noted, we did repurchase $400 million in this most recent quarter, which was within the guidelines, the guidance that we had provided. And we have indicated an expectation that we'll repurchase at the $400 million levels, what we're targeting for this current quarter. And keep in mind that we just had another capital deployment action this quarter where we redeemed $80 million of preferred equity. That has the same effect on Tier 1 capital as a share repurchase. It doesn't have the same EPS effect as a share repurchase. So I would say we're deploying in capital actions this quarter, targeting $480 million of activity. And going forward, we remain committed to that $400 to 500 quarterly level going forward as we continue to monitor our Tier 1 leverage ratio until such time that we've deployed it in our other priorities.
Close to $1 $1 billion this year.
AI.
Or is that sort of help them save time to help them make better decisions to help them be more efficient in their operations to their clients.
And then the products and so having the culture and the products and the platform and the technology is.
Great, thanks for all that color, Paul. Um, if I could just quickly follow up on on a modeling question, just just on expenses. So sorry if I missed it just anything. Uh, is there anything to call out in terms of comp expense or comp ratio during the quarter? And I know, I know it's typically build seasonally from here. I think you, you know, Paul you mentioned the payroll taxes but how how should we think about kind of modeling in terms of comp ratio, you know, whether you know into physical second quarter or even fiscal 26? Thanks.
Really differentiating us more than ever.
Paul Shoukry: Yeah, I mean, the comp ratio target that we laid out in the last Analyst Investor Day was 65% or better. And really, this quarter is impacted by revenue mix. So Private Client Group business, with the independent channel, which has a higher payout. Some firms break that out of compensation. We include it in compensation, drives a higher, mix of compensation relative to the Capital Markets business, which for us, largely due to timing, you know, the Investment Banking pipeline, we still feel very good about. But this quarter, it was, a weaker quarter.
Paul Shoukry: Yeah, I mean, the comp ratio target that we laid out in the last Analyst Investor Day was 65% or better. And really, this quarter is impacted by revenue mix. So Private Client Group business, with the independent channel, which has a higher payout. Some firms break that out of compensation. We include it in compensation, drives a higher, mix of compensation relative to the Capital Markets business, which for us, largely due to timing, you know, the Investment Banking pipeline, we still feel very good about. But this quarter, it was, a weaker quarter.
Our purchase of all the value proposition that we released with our annual reported several weeks ago.
Yeah, I mean the comp ratio target that we laid out.
anything else investor day was
Briefly differentiating as well other.
Firms are talking about Irr's exit periods in three to five years our funnels.
In personal things and what we're doing in that world.
What I call a noisy competition, it's really doubling and tripling down on what we've always done which is really focusing on the personal relationships with financial advisors, and giving them tools and resources to strengthen the personal relationships that they have with their clients and thats really resonating with advisors, both our existing advisors fee perspective.
Technology, uh, is really differentiating us more than ever and the power of personal. The value proposition that we released with our annual report of several weeks ago is increasingly differentiating as well. You know, other uh firms are talking about irrs and exit periods and 3 to 5 years or funnels and all sorts of impersonal things and what we're doing in that world. Uh of what I call noisy competition is really doubling and tripling down on what we've always done which is really focusing on the personal relationships with financial advisors and giving them the tools and resources to strengthen the personal relationships that they have with their clients. And that's really resonating with advisors, both our existing advisors and prospective advisors, which is driving our consistent, uh, consistently leading recruiting activities.
Paul Shoukry: And so due to the revenue mix, also with lower interest short-term rates, when you look at the mixes of revenue, it ended up being slightly above 65%, but really at 65.4% for the quarter, with lower rates and a tough, a very tough quarter for capital markets, again, due to timing, we're really pleased with that result.
And so due to the revenue mix, also with lower interest short-term rates, when you look at the mixes of revenue, it ended up being slightly above 65%, but really at 65.4% for the quarter, with lower rates and a tough, a very tough quarter for capital markets, again, due to timing, we're really pleased with that result.
Advisors, which is driving our consistent.
Michael Ahn: Great. Thank you.
Michael Ahn: Great. Thank you.
Butch Oorlog: The next question will come from Jim Mitchell, Seaport Global Securities.
Operator: The next question will come from Jim Mitchell, Seaport Global Securities.
Consistently leading recruiting activities.
Oh, great. Thanks for all that color Paul.
[Analyst] (Seaport Global Securities): Hey. Good afternoon. Just on the deposit mix, you had ESP balances down $1 billion quarter-over-quarter, another $500 million so far. Is that just demand-driven? Or are you actively looking to shrink those deposits? And just trying to think through the trajectory of those balances and the mix going forward.
James Mitchell: Hey. Good afternoon. Just on the deposit mix, you had ESP balances down $1 billion quarter-over-quarter, another $500 million so far. Is that just demand-driven? Or are you actively looking to shrink those deposits? And just trying to think through the trajectory of those balances and the mix going forward.
65% or better. Um, and and really this quarter is impacted by Revenue mix. Uh, so Private Client Group business with the independent Channel, which has a higher payout, some firms break that out of compensation, we included in compensation, uh, drives a higher uh, mix of compensation relative to the capital markets business which for us largely due to timing. You know, the investment banking pipeline. We feel still feel very good about, uh, but this quarter, it was, uh, a week or quarter and so due to the revenue, mix also would lower interest short-term rates. Uh, when you look at those the mixes of Revenue, it ended up being slightly above 65%, but really at 65.4% for the quarter with lower rates in the tough, a very tough quarter for Capital markets again, due to timing. We're really pleased with that uh, result
Oh, great, thanks for all that color, Paul. Um, if I could just quickly call up on on a modeling question that's just on expenses. So sorry if I missed it just anything. Uh, was there anything to call out in terms of comp 6 cents or comp ratio during the quarter? And no, no, it's typically billed seasonally from here. I think you can call you mentioned the payroll taxes. But how how do we think about kind of modeling in terms of comp ratio? You know, whether you know it's a physical second quarter or even the physical 26? Thanks.
If I could just quickly follow up on the on a modeling question.
Michael Cho: Great. Thanks, Paul.
Michael Cho: Great. Thanks, Paul.
Great. Thanks. Paul.
Operator: The next question will come from Ben Budish from Barclays.
Operator: The next question will come from Ben Budish from Barclays.
Alright.
Anything.
The next question will come from Ben Buddhist from Barclays.
Ben Budish: Hi, good evening, and thank you for taking my question. Maybe just following up on Michael's first question there on NNAs. You know, really solid quarter, but it does seem like from what we're hearing from competitors, from a lot of the, you know, kind of media, the media coverage, that the competitive intensity is picking up quite a bit, whether it's manifesting in, you know, more incentives, more aggressive, you know, retaining of existing advisors. Just curious, you know, is that something you're seeing? You know, how are you thinking about responding? Is it the sort, you know, sort of environment where this quarter, was there anything unusual, or do you think that kind of growth is, you know, sustainable, over the next at least coming quarters?
Ben Budish: Hi, good evening, and thank you for taking my question. Maybe just following up on Michael's first question there on NNAs. You know, really solid quarter, but it does seem like from what we're hearing from competitors, from a lot of the, you know, kind of media, the media coverage, that the competitive intensity is picking up quite a bit, whether it's manifesting in, you know, more incentives, more aggressive, you know, retaining of existing advisors. Just curious, you know, is that something you're seeing? You know, how are you thinking about responding? Is it the sort, you know, sort of environment where this quarter, was there anything unusual, or do you think that kind of growth is, you know, sustainable, over the next at least coming quarters?
In terms of comp expense your comp ratio during the quarter and tips.
Typically seasonally from Darren.
Paul you mentioned.
But as we think about kind of modeling in terms of comp ratio, whether its fiscal second quarter.
Yeah, I mean the comprehensive Target that we laid out in the last analyst investor day was 65% or better. Um and and really this quarter is impacted by Revenue mix. So Private Client Group business with the independent Channel, which has a higher payout, some firms break that out of compensation, we included in compensation,
Paul M. Shoukry: No, Jim. It really was demand-driven because it's kind of just had 100% deposit beta. So we haven't been accelerating that to change the demand. And if you look at the outflows, the outflows have been pretty consistent. It's really the inflows that have decelerated as rates have started coming in. And I think more funds are getting invested into the markets. So I think that's consistent with what you've seen with other firms and their higher-yielding savings products. It's just as rates are coming in, as you would expect, the demand for placing cash there is declining.
Paul M. Shoukry: No, Jim. It really was demand-driven because it's kind of just had 100% deposit beta. So we haven't been accelerating that to change the demand. And if you look at the outflows, the outflows have been pretty consistent. It's really the inflows that have decelerated as rates have started coming in. And I think more funds are getting invested into the markets. So I think that's consistent with what you've seen with other firms and their higher-yielding savings products. It's just as rates are coming in, as you would expect, the demand for placing cash there is declining.
All right.
Yes, I mean, the comp ratio target that we laid out.
<unk> Investor day, with 65% or better.
And really this quarter was impacted by revenue mix, So private client group business.
Channel, which has a higher payout sometimes break that out of the compensation we included in compensation.
Ben Budish: Just be great to get your thoughts there.
Just be great to get your thoughts there.
Drives a higher mix of compensation relative to the capital markets business, which for us largely due to timing.
Hi, uh, good evening. And thank you for taking my question. Um, maybe just following up on on Michael's first question there on Na's, um, you know, really solid quarter but it does seem like, from what we're hearing from competitors. From a lot of the, um, you know, kind of media the, the media coverage, uh, that the competitive intensity is picking up quite a bit. Whether it's manifesting in, you know, more incentives. More aggressive, you know, retaining of existing advisors? Um, just curious, you know, is that something you're seeing, you know, how are you thinking about responding, um, is it the sort, you know, sort of environment where this quarter was there? Anything unusual? Or do you think that kind of growth is um you know, sustainable over the next at least coming quarters? Uh just would be great to get your thoughts there.
Paul Shoukry: Thanks, Ben, and welcome to being one of our covering analysts, I think, just starting this morning. So, yeah, I mean, the environment's always competitive. I mean, I think in the last five years, the biggest change has been the entry of these private equity roll-ups. And, you know, we've talked a lot, as you know, in the past, around that dynamic. I think this is gonna be a really important year for those type of firms. A lot of them have sought liquidity events and haven't been able to achieve them at the multiples that I think they were targeting. And so, and a lot more will come out, I think, in the next year or two.
Paul Shoukry: Thanks, Ben, and welcome to being one of our covering analysts, I think, just starting this morning. So, yeah, I mean, the environment's always competitive. I mean, I think in the last five years, the biggest change has been the entry of these private equity roll-ups. And, you know, we've talked a lot, as you know, in the past, around that dynamic. I think this is gonna be a really important year for those type of firms. A lot of them have sought liquidity events and haven't been able to achieve them at the multiples that I think they were targeting. And so, and a lot more will come out, I think, in the next year or two.
Drives a higher mix of compensation relative to the capital markets business which for us largely due to timing. You know, the investment banking pipeline. We still still feel very good about but this quarter it was a week or quarter and so due to the revenue, mix also would lower interest short-term rates. When you look at those the mixes of Revenue, it ended up being slightly above 65% but really at 65.4% for the quarter with lower rates in the tough, a very tough quarter for Capital markets. Again, due to timing and we're really pleased with that result.
Banking pipeline, we still feel very good about.
Thanks Paul.
This quarter it was a weaker quarter.
Due to the revenue mix also with lower interest short term rage, what do you look at those mixes of revenue it ended up being slightly above 65%, but really at 65, 4% for the quarter with lower rates and a very tough quarter for capital markets due to timing, we're really pleased with that result.
From Ben Buddhist from Barkley.
[Analyst] (Seaport Global Securities): Right. Okay. That's fair. And so when we kind of put it all together with kind of the thoughts on mix from here, deposit mix from here, the forward curve, and your pretty significant loan growth that's picking up with lower rates, how do you think about the combination of NII and RJBDP fees as we go forward for the rest of the year?
James Mitchell: Right. Okay. That's fair. And so when we kind of put it all together with kind of the thoughts on mix from here, deposit mix from here, the forward curve, and your pretty significant loan growth that's picking up with lower rates, how do you think about the combination of NII and RJBDP fees as we go forward for the rest of the year?
Yes.
Paul Shoukry: 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. But I call that short-term noise, short-term impact. We obviously have to deal with that from a competitive perspective, but the advisors we're recruiting are not looking for a 3 to 5-year destination. You know, they're looking for a much longer... But, you know, a 3 to 5-year destination with another liquidity event that's gonna cause another source of disruption for them and their clients. We are kind of a long-term, stable play for advisors and their clients.
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. But I call that short-term noise, short-term impact. We obviously have to deal with that from a competitive perspective, but the advisors we're recruiting are not looking for a 3 to 5-year destination. You know, they're looking for a much longer... But, you know, a 3 to 5-year destination with another liquidity event that's gonna cause another source of disruption for them and their clients. We are kind of a long-term, stable play for advisors and their clients.
Thanks, Paul.
The next question will come from Bangladesh from Barclays.
Thanks Ben, and welcome to the, uh, to to being 1 of our covering analysts, I think, uh, just starting this morning. So, uh, yeah, I mean, the, the environment is always competitive. I mean, I think in The Last 5 Years, the biggest change has been the entry of these private Equity Roll-Ups. And I, you know, we've talked a lot as, you know, in the past around that Dynamic, I think this is going to be really important year for those type of firms. A lot of them have sought liquidity events and haven't been able to achieve them at the multiples that I think they were targeting. And so, uh, and a lot more will come out. I think in the next year or 2, uh, and that that will dictate whether or not, they can still afford to pay what they have been paying which is actually been increasing.
Paul M. Shoukry: Yeah. I mean, I would say it really kind of depends on the rate trajectory from here. So the market's pricing in anywhere from 0 to 2 rate cuts. The lower the rates, I mean, we have pretty good deposit beta on the balances that we have, which provides resiliency on both the NIM and the BDP yield. But in terms of the balances in ESP, I still think clients are price-sensitive to what they're earning on their cash balances. Even if rates were to be cut a couple more times, it's just the real difficult question to answer is, to what extent does that sensitivity decrease as rates go down? And we really don't know the answer to that that we would be guessing. But that's what we would have to monitor going forward.
Paul M. Shoukry: Yeah. I mean, I would say it really kind of depends on the rate trajectory from here. So the market's pricing in anywhere from 0 to 2 rate cuts. The lower the rates, I mean, we have pretty good deposit beta on the balances that we have, which provides resiliency on both the NIM and the BDP yield. But in terms of the balances in ESP, I still think clients are price-sensitive to what they're earning on their cash balances. Even if rates were to be cut a couple more times, it's just the real difficult question to answer is, to what extent does that sensitivity decrease as rates go down? And we really don't know the answer to that that we would be guessing. But that's what we would have to monitor going forward.
Yes.
Hi, Good evening and thank you for taking my question.
Maybe just following up on Michael's first question there on M&A is.
Really solid quarter, but it does seem like from what we're hearing from competitors from a lot of the.
Hi, uh, good evening. And thank you for taking my question. Um, maybe just following up on, on Michael's first question there on nnas, um, you know, really solid quarter but it does seem like, from what we're hearing from competitors. From a lot of the, um, you know, kind of media, the, the media coverage, uh, that the competitive intensity is picking up quite a bit. Whether it's manifesting in, you know, more incentives. More aggressive, you know, retaining of existing advisors? Um, just curious, you know, is that something you're seeing, you know, how are you thinking about responding, um, is it the sort, you know, sort of environment where this quarter was there? Anything unusual? Or do you think that kind of growth is um you know, sustainable over the next at least coming quarters uh just be great to get your thoughts there.
Media the media coverage that the competitive intensity is picking up quite a bit whether it's manifesting in more incentives more aggressive retaining of existing advisors.
Thanks Ben, and welcome to the, uh, to, to being 1 of our covering analysts, I think, uh, just starting this morning. So, uh, yeah. I mean, the the environment, though,
I'm just curious is that something youre seeing how are you thinking about responding.
Paul Shoukry: We're, 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 gonna have to have another disruption in three to five years. They want—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, and capital, because they want a platform and a home that can remain independent. 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.
We're, 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 gonna have to have another disruption in three to five years. They want—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, and capital, because they want a platform and a home that can remain independent. 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.
This sort of environment, where this quarter was there anything unusual or do you think that kind of growth is sustainable.
Sustainable over the next coming quarters, So I just would be great to get your thoughts there.
Thanks, Ben and welcome to the <unk>.
Being one of our covering analysts I think just starting this morning. So.
[Analyst] (Seaport Global Securities): Okay. Fair enough. Thanks.
James Mitchell: Okay. Fair enough. Thanks.
Yes.
So it is competitive.
Last five years, the biggest change than the entry of these private equity roll ups.
Butch Oorlog: Our next question comes from Michael Cyprys, Morgan Stanley.
Operator: Our next question comes from Michael Cyprys, Morgan Stanley.
Michael Cyprys: Great. Thanks for taking the question. I just wanted to ask about the alts platform that you've been investing across. I was hoping you could elaborate on how you've been expanding that platform, where that stands today relative to where you'd like that to be. What steps can we expect from Raymond James over the next 12 to 24 months with respect to the alts platform?
Michael Cyprys: Great. Thanks for taking the question. I just wanted to ask about the alts platform that you've been investing across. I was hoping you could elaborate on how you've been expanding that platform, where that stands today relative to where you'd like that to be. What steps can we expect from Raymond James over the next 12 to 24 months with respect to the alts platform?
Talked a lot as you know in the past around that dynamic I think this is going to be really important year for those type of firms a lot of them have sought liquidity events and haven't been able to achieve multiples that I think they were targeting and so.
With competitive, but I think in The Last 5 Years, the biggest change has been the injury of these private Equity rollups. And, you know, we've talked a lot as you know, in the past around that Dynamic, I think this is going to be really important here for those type of firms. A lot of them have sought liquidity events and haven't been able to achieve them at the multiples that I think they were targeting. And so, uh, and a lot more will come out, but I think in the next year or 2, uh, and that that will dictate whether or not, they can still afford to pay, what they have been paying, which is actually been increasing over the last couple of years, but I call that short-term noise short-term, uh, impact. We, obviously,
Paul Shoukry: While the competition has increased in the industry, for us, our differentiation, we feel like we have, in some ways, less competition than ever because we're focused on the long term, we're focused on the power of personal, the personal relationships, and we're able to invest $1 billion in technology. You know, a lot of our competitors who also are focused on personal relationships, and that have similar cultures, their technology investment, for example, is a fraction of ours. And that's hard to remain competitive when you can't invest in AI and the tools that you need to help advisors, you know, develop more efficiency in their businesses with their clients.
While the competition has increased in the industry, for us, our differentiation, we feel like we have, in some ways, less competition than ever because we're focused on the long term, we're focused on the power of personal, the personal relationships, and we're able to invest $1 billion in technology. You know, a lot of our competitors who also are focused on personal relationships, and that have similar cultures, their technology investment, for example, is a fraction of ours. And that's hard to remain competitive when you can't invest in AI and the tools that you need to help advisors, you know, develop more efficiency in their businesses with their clients.
A lot more will come out, but I think in the next year or two.
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, but I call that short term noise short term impact we obviously.
Paul M. Shoukry: Yeah. I mean, with our alts platform, we have a very similar approach that I described with growing the number of advisors that we have. And it's an approach of quality over quantity. We don't want to have every product under the sun. Just because it might make a headline or a news story, then there might be some interest that comes in. You've got to make sure, one, there's critical mass of interest and demand. But most importantly, that the product is well-diligenced from both an operational and an investment perspective and well-supported on an ongoing basis, which requires ongoing servicing. And to do it well, we really want to make sure that there's critical mass in the products that we do offer. So we're being deliberate on it. We invest a lot in education.
Paul M. Shoukry: Yeah. I mean, with our alts platform, we have a very similar approach that I described with growing the number of advisors that we have. And it's an approach of quality over quantity. We don't want to have every product under the sun. Just because it might make a headline or a news story, then there might be some interest that comes in. You've got to make sure, one, there's critical mass of interest and demand. But most importantly, that the product is well-diligenced from both an operational and an investment perspective and well-supported on an ongoing basis, which requires ongoing servicing. And to do it well, we really want to make sure that there's critical mass in the products that we do offer. So we're being deliberate on it. We invest a lot in education.
Deal with that from a competitive perspective, but the advisors. We're recruiting are not looking for a three to five year destination, they're looking for a much longer.
Looking for advisors, or 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, uh, disruption in 3 to 5 years. Uh, they want 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, uh, and capital. Uh, because they want a, a platform and a home that can remain independent and we're absolutely committed to remaining independent, uh because again, they don't want to have to make a change again in 3 to 5 years. So it while the competition is increased, in the industry, uh, for us, our differentiation, we feel like we have in some ways less competition than ever because we're focused on the long term. We're focused on the power of personal the personal relationships and we're able to invest a billion dollars in technology. You know, a lot of our competitors who also are focused on personal relationships and that have similar cultures. Their technology investment, for example is a
Five year destination with another liquidity event, that's going to cause another source of disruption for them and their clients.
Fraction of ours. Uh, and that's hard to remain, um, competitive when you can't invest in AI and the tools that you need to, uh, help advisors develop more efficiency in their businesses, with their clients.
Ben Budish: Got it. All very helpful. Maybe for my follow-up, just curious if you could unpack a little bit more the near-term outlook on the capital market side. It sounds like you're still confident on the pipeline. You know, obviously, the revenues can swing quite a bit from quarter to quarter. So anything you can share from a modeling perspective, how we should think about, you know, the very near term? You know, we're about a third of the way through Q1. You know, anything you can share would be helpful. Thank you very much.
Ben Budish: Got it. All very helpful. Maybe for my follow-up, just curious if you could unpack a little bit more the near-term outlook on the capital market side. It sounds like you're still confident on the pipeline. You know, obviously, the revenues can swing quite a bit from quarter to quarter. So anything you can share from a modeling perspective, how we should think about, you know, the very near term? You know, we're about a third of the way through Q1. You know, anything you can share would be helpful. Thank you very much.
Long term stable play for advisers and their clients.
Looking for advisors are really looking for a platform.
All of them for them and their teams and their clients whether they are not going to have to have another disruption in three to five years. They want 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.
Has to uh deal with that from a competitive perspective. But the advisers we're recruiting are not looking for a 3 to 5 year destination. You know. They're looking for a much longer but you know 3 to 5 year destination with another liquidity event that's going to cause another source of disruption for them and their clients, we are kind of the long-term stable play for advisors and their clients. We're, we're looking for advisors 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, uh, disruption, in 3 to 5 years. Uh, they want they're looking at our balance sheets to see how much tangible Equity. We have how much leverage we have, how much cash flow we have uh, in capital. Uh, because they want a platform and a home that can remain independent and we're absolutely committed to remaining independent uh because again, they don't want to have to make a change again in 3 to 5 years. So it while the competition is increased in the industry,
Got it all very helpful, uh, maybe for my follow-up, just curious. If you could unpack a little bit more of the near-term outlook on the Capital Market side. Uh, sounds like you're still confident on the pipeline, um, you know, obviously, the revenues can swing quite a bit from quarter to quarter so anything you can share from a modeling perspective, how we should think about, you know, the the very near-term. You know, we're about a third of the way through q1, um, you know, anything you can share, would be helpful. Thank you very much.
Paul Shoukry: The pipeline remains very strong. There is a lot of pent-up demand in terms of buyers and sellers. You know, buyers with capital, dry powder to deploy, and sellers. Again, the majority of our M&A activity is driven by financial sponsors, either on the buy and or on the sell side. And there's a lot of holdings and funds that are well beyond their original holding period. And so there's a lot of pent-up demand, there's a lot of, we're signing a lot of engagement letters and, so we feel good about the demand, but you know, you can never predict timing. And so we don't try to guess on when they will close or if they will close.
Paul Shoukry: The pipeline remains very strong. There is a lot of pent-up demand in terms of buyers and sellers. You know, buyers with capital, dry powder to deploy, and sellers. Again, the majority of our M&A activity is driven by financial sponsors, either on the buy and or on the sell side. And there's a lot of holdings and funds that are well beyond their original holding period. And so there's a lot of pent-up demand, there's a lot of, we're signing a lot of engagement letters and, so we feel good about the demand, but you know, you can never predict timing. And so we don't try to guess on when they will close or if they will close.
Capital.
Paul M. Shoukry: We've seen other firms in the industry use alternative investments as sort of a tool to make it harder for advisors to leave from one firm to the other because they kind of create friction when advisors want to move and/or as a profit driver. That's not how we look at any product. First of all, all advisors are free agents. And if they want to leave on good standing, we'll help them move to another firm. And we don't want to try to sell any products to them that makes that harder for them and their clients. And secondly, I think it's problematic long term when you start looking at products as profit drivers versus what's most importantly good for clients long term.
We've seen other firms in the industry use alternative investments as sort of a tool to make it harder for advisors to leave from one firm to the other because they kind of create friction when advisors want to move and/or as a profit driver. That's not how we look at any product. First of all, all advisors are free agents. And if they want to leave on good standing, we'll help them move to another firm. And we don't want to try to sell any products to them that makes that harder for them and their clients. And secondly, I think it's problematic long term when you start looking at products as profit drivers versus what's most importantly good for clients long term.
Because they want.
<unk> platform in a home that can remain independent.
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. So while the competition has increased in the industry for us our differentiation, we feel like we have in some ways less competition than ever because we're focused on our long term focus on the power parcel the personal relationships, we were able to invest.
Uh, for us, our differentiation. We feel like we have in some ways less competition than ever because we're focused on the long term. We're focused on the power of personal the personal relationships, and we're able to invest a billion dollars in technology, you know, a lot of our competitors who also are focused on personal relationships and that have similar cultures. Their technology investment. For example, is a fraction of ours
and that's hard to remain in competitive, when you can't invest in Ai, and the tools that you need to, uh, help advisors de develop more efficiency in their businesses, with their clients,
And technology, a lot of our competitors, who also our focus on personal relationships.
We have similar cultures.
<unk> investment for example is a fraction of ours and Thats hard to remain competitive when you can't invest in AI.
Paul M. Shoukry: And so we invest a lot in education and making sure advisors help their clients understand the liquidity impact of investing in private equity and what is the appropriate amount of allocation of private equity given the individual client's liquidity needs, which is different among every client, which is why it's so important for the advisor to understand their client's risk tolerance or liquidity needs, where they are in their investment process. And so we have a balanced approach when it comes to offering any product, but particularly private equity because it is, on a relative basis, less liquid than the more traditional investments. And it becomes even less liquid when you need the cash, typically, if you look at history. So we just want to have a balanced approach and a long-term approach there.
And so we invest a lot in education and making sure advisors help their clients understand the liquidity impact of investing in private equity and what is the appropriate amount of allocation of private equity given the individual client's liquidity needs, which is different among every client, which is why it's so important for the advisor to understand their client's risk tolerance or liquidity needs, where they are in their investment process. And so we have a balanced approach when it comes to offering any product, but particularly private equity because it is, on a relative basis, less liquid than the more traditional investments. And it becomes even less liquid when you need the cash, typically, if you look at history. So we just want to have a balanced approach and a long-term approach there.
Paul Shoukry: You know, the market conditions have to be conducive, and there have to be buyers and sellers that meet on price and terms.
You know, the market conditions have to be conducive, and there have to be buyers and sellers that meet on price and terms.
And the tools that you need to.
Got it all very helpful, uh, maybe for my follow-up, just curious. If you could unpack a little bit more of the near-term outlook on the Capital Market side. Uh, it sounds like you're still confident on the pipeline, um, you know, obviously, the revenues can swing quite a bit from quarter to quarter so anything you can share from a modeling perspective, how we should think about, you know, the the very near term. You know, we're about a third of the way through q1.
Advisors.
Develop more efficiency in their businesses with their clients.
And the pipeline remains, uh, very strong. The, uh, there are a lot of pent up demand in terms of buyers and sellers, uh, you know, buyers with capital dry powder to deploy, uh, and, uh, and sellers. Again, the majority of our m&a, activities driven by Financial sponsors, either on the Buy and or on the sell side. Uh, and there's a lot of, uh, Holdings and funds that are well beyond their original uh, holding period. And so there's a lot of pent-up demand, there's a lot of we're signing a lot of uh, engagement letters. And uh, so we feel good about the demand but, you know, you can never predict timing and so, uh, we we, we don't try to guess on when they will close or if they will close at, you know, the market conditions have to be conducive and uh, there has to be buyers and sellers that meet on price and terms.
Operator: Okay. Thanks so much for taking my questions.
Ben Budish: Okay. Thanks so much for taking my questions.
You know, anything you can share, would be helpful. Thank you very much.
Okay, thanks so much for taking my questions.
Paul Shoukry: Thank you.
Paul Shoukry: Thank you.
Got it all very helpful. Maybe for my follow up just curious if you could unpack a little bit more of the near term outlook on the capital market side.
Operator: Next up is Craig Siegenthaler from Bank of America.
Operator: Next up is Craig Siegenthaler from Bank of America.
Thank you.
Next up is Craig. Segan, baller from Bank of America.
Craig Siegenthaler: Hey, good evening, Paul.
Craig Siegenthaler: Hey, good evening, Paul.
Looks like you're still confident on the pipeline obviously, the revenues can swing quite a bit from quarter to quarter. So anything you can share from a modeling perspective, how we should think about the very near term we're about a third of the way through Q1.
Hey, good evening, Paul.
Paul Shoukry: Hey, Craig.
Paul Shoukry: Hey, Craig.
Craig Siegenthaler: So first, just a big congrats on the 8%. But there actually has been a wide range in recent quarters. We saw 2% a couple of quarters ago, 8% this past quarter. So I was wondering if you can comment on the sustainability of the 8%, and in your view, is maybe the midpoint, something like 5% to 6%, a better go-forward run rate to model?
Craig Siegenthaler: So first, just a big congrats on the 8%. But there actually has been a wide range in recent quarters. We saw 2% a couple of quarters ago, 8% this past quarter. So I was wondering if you can comment on the sustainability of the 8%, and in your view, is maybe the midpoint, something like 5% to 6%, a better go-forward run rate to model?
Anything you can share would be helpful. Thank you very much.
Strongly. Uh, there are a lot of pent up demand in terms of buyers and sellers, uh, you know, buyers with capital dry powder to deploy, uh, and, uh, and sellers. Again, the majority of our m&a, activities driven by Financial sponsors, either on the Buy and or on the sell side. Uh, and there's a lot of, uh,
The pipeline remains very strong the third a lot of pent up demand in terms of buyers and sellers.
Holdings and funds that are well beyond their original. Um,
Hey. So first just a um, big congrats on the 8%. Um but but they're actually has been a wide range. In recent quarters, we saw 2% a couple quarters ago, 8%, this past quarter. So I was wondering if you can comment on the sustainability of the 8% and in your view is maybe the midpoint something like 5 to 6%. A better go forward. Run rate to model.
Paul Shoukry: Yeah, I mean, 8% did benefit from not only the really strong retention results, recruiting results, but also there's year-end calendar year-end dynamics, which help all firms in the industry with dividends and interest payments and those sorts of things. But with that being said, we're confident that based on our pipelines now and our retention that I spoke about earlier, that we can continue to be a leading grower in Wealth Management, which we have been on a pretty consistent basis, and doing it in a way that we feel sustainable. We're really focused on quality over quantity. And so we've been really growing assets by bringing on higher quality teams that are focused on higher net worth clients, and so that will...
Paul Shoukry: Yeah, I mean, 8% did benefit from not only the really strong retention results, recruiting results, but also there's year-end calendar year-end dynamics, which help all firms in the industry with dividends and interest payments and those sorts of things. But with that being said, we're confident that based on our pipelines now and our retention that I spoke about earlier, that we can continue to be a leading grower in Wealth Management, which we have been on a pretty consistent basis, and doing it in a way that we feel sustainable. We're really focused on quality over quantity. And so we've been really growing assets by bringing on higher quality teams that are focused on higher net worth clients, and so that will...
Buyers with capital dry powder to deploy.
Michael Cyprys: Great. Thanks. And then just a follow-up question on AI. You spoke about automating processes and launching your AI operations agent, Rai. I was hoping you could speak to your aspirations there, how you see this ramping in terms of usage and adoption compared to where that adoption is today for Rai. What sort of ROI do you anticipate? And then just more broadly, where is there scope to launch additional agents and how you're thinking about potential for an agentic workforce at Raymond James?
Michael Cyprys: Great. Thanks. And then just a follow-up question on AI. You spoke about automating processes and launching your AI operations agent, Rai. I was hoping you could speak to your aspirations there, how you see this ramping in terms of usage and adoption compared to where that adoption is today for Rai. What sort of ROI do you anticipate? And then just more broadly, where is there scope to launch additional agents and how you're thinking about potential for an agentic workforce at Raymond James?
And sellers again.
Majority of our M&A activity is driven by financial sponsors either by Andrew on the sell side and Theres a lot of.
Holding period. And so there's a lot of pent-up demand. There's a lot of we're signing a lot of Engagement letters and uh so we feel good about the demand but you know, you can never predict timing and so uh we we we don't try to guess on when they will close or if they will close its, you know, the market conditions have to be conducive and uh there has to be buyers and sellers that meet on price and terms.
All things in funds that are well beyond their original.
Okay. Uh, thanks so much for taking my questions.
Holding period.
Thank you.
So there's a lot of pent up demand there is a lot of we're signing a lot of engagement letters.
Next up.
Is Craig segan. Baller.
From Bank of America.
Paul M. Shoukry: No. It's a great question. I mean, I spend a lot of time with our technology leadership asking the same thing. And really, we don't know yet. It's first inning of opportunities here and deployment. We already have over 10,000 associates that are using AI on a regular basis in one way, shape, or form. So the penetration has been pretty significant. I think over 3 million lines of code are written a month using AI with oversight from the technologists in the group. So we are using AI to a pretty significant extent already. But I still think it's early innings. And the opportunities to expand that as these tools get smarter and more efficient is significant.
Paul M. Shoukry: No. It's a great question. I mean, I spend a lot of time with our technology leadership asking the same thing. And really, we don't know yet. It's first inning of opportunities here and deployment. We already have over 10,000 associates that are using AI on a regular basis in one way, shape, or form. So the penetration has been pretty significant. I think over 3 million lines of code are written a month using AI with oversight from the technologists in the group. So we are using AI to a pretty significant extent already. But I still think it's early innings. And the opportunities to expand that as these tools get smarter and more efficient is significant.
So we feel good about demand, but you can never predict timing.
Hey, good evening, Paul.
No.
We don't try to guess on when they will close or if they will close of the market conditions have to be conducive to be buyers and sellers.
In terms.
Okay. Thanks, so much for taking my question.
Paul Shoukry: And that enables us to keep a high touch service model, and really reinforce the value proposition of Power Personal.
And that enables us to keep a high touch service model, and really reinforce the value proposition of Power Personal.
Thank you.
Next step is Craig Siegenthaler from Bank of America.
Yeah, I mean 8% did benefit from not only the really strong retention results, recruiting results. But also there's year-end calendar year end Dynamics, which helped all firms in the industry with, you know, uh, dividends and uh, interest payments and those sorts of things. Uh, but with that being said, we're confident that based on our pipelines now, and our, uh, our retention that I spoke about earlier that we can continue to be a leading grower in wealth management, which we have been on a cons, pretty consistent basis, and, and doing it in a way that we feel sustainable. We really focused on quality over quantity, uh, and so we've been really growing assets by bringing on higher quality teams, uh, that are focused on uh, higher net worth clients and so that, uh, will and that enables us to keep a high touch service model uh, and really reinforce the
And in your view is maybe the midpoint something like 5 to 6%. A better go forward. Run rate to model.
Value proposition of power personal.
Hey, good evening Paul.
Craig Siegenthaler: Thanks for that, Paul. You know, given the stronger recruiting that we've seen and we're seeing in the results today, but also elevated competition, could we see the PCG comp ratio creep up in 2026, or does the 5 to 10 years smoothing really protect the operating margin, if recruiting and NAs remain robust?
Craig Siegenthaler: Thanks for that, Paul. You know, given the stronger recruiting that we've seen and we're seeing in the results today, but also elevated competition, could we see the PCG comp ratio creep up in 2026, or does the 5 to 10 years smoothing really protect the operating margin, if recruiting and NAs remain robust?
Hey, John This is Jeff speaking.
Hey, congrats on the percent.
But there actually has been a wide range of recent quarters, we saw a 2% a couple of quarters ago, 8%. This past quarter. So I was wondering if you can comment on the sustainability of the percents and in your view as maybe the midpoint something like 5% to 6% a better go forward run rate to model.
Yeah, I mean 8% did benefit from not only the really strong retention results, recruiting results. But also there's year end calendar year end Dynamics, which helped all firms in the industry with, you know, uh, dividends and uh,
Michael Cyprys: Great. Thank you.
Michael Cyprys: Great. Thank you.
Thanks to that Paul. And then um, you know, given the stronger recruiting that, that we've seen and we're seeing in the results today. Um, but also elevated competition. Could we see the PCG comp ratio creep up in 2026, or does the 5 to 10 years, smoothing really protect, the operating margin. Um, if recruiting in na remain, robust
Butch Oorlog: The next question comes from Devin Ryan from Citizens Bank.
Operator: The next question comes from Devin Ryan from Citizens Bank.
Paul Shoukry: Yeah, I mean, there's a lot of investment that goes into recruiting. The reason we broke out the retention and transition assistance-related expense for the first time this quarter is because in the last twelve months, we recruited advisors who had $460 million at their prior firms. That's equivalent to a pretty decent size acquisition in our space, especially when you look at, you know, what's remaining out there. 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. And if we did do an acquisition, that type of expense would typically be non-GAAP.
Paul Shoukry: Yeah, I mean, there's a lot of investment that goes into recruiting. The reason we broke out the retention and transition assistance-related expense for the first time this quarter is because in the last twelve months, we recruited advisors who had $460 million at their prior firms. That's equivalent to a pretty decent size acquisition in our space, especially when you look at, you know, what's remaining out there. 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. And if we did do an acquisition, that type of expense would typically be non-GAAP.
Yes, I mean, 8% did benefit from not only the really strong retention results recruiting results, but also there's year end calendar year end dynamics, which help all firms in the industry.
Devin Ryan: Thanks, everyone. I think we're probably covered everything here. Just one, maybe to dig in on the securities-based loan growth. I mean, it's just been really off the charts. And so I'm just curious, as we think about kind of the next year here. I get the piece around rates are coming down, and that's helpful. But it seems like there's probably a lot of education going on there. And so I'd love to just get a sense of kind of some of the other drivers and then just capacity because that's a really nice area for you guys. And it would seem like kind of the remixing element of that is quite positive. So just want to get a sense of how much more room there is to go in terms of penetration of your customers. Thanks.
Devin Ryan: Thanks, everyone. I think we're probably covered everything here. Just one, maybe to dig in on the securities-based loan growth. I mean, it's just been really off the charts. And so I'm just curious, as we think about kind of the next year here. I get the piece around rates are coming down, and that's helpful. But it seems like there's probably a lot of education going on there. And so I'd love to just get a sense of kind of some of the other drivers and then just capacity because that's a really nice area for you guys. And it would seem like kind of the remixing element of that is quite positive. So just want to get a sense of how much more room there is to go in terms of penetration of your customers. Thanks.
interest payments and those sorts of things. Uh, but with that being said, we're confident that based on our pipelines now, and our, our retention that I spoke about earlier that we can continue to be a leading grower in wealth management, which we have been on a consistent, pretty consistent basis and and doing it in a way that we feel sustainable. We really focus on quality
Dividends.
Interest payments and those sorts of things, but with that being said, we're confident that based on our pipeline is now on a retention that I spoke about earlier that we can continue to be a leading grower in wealth management, which we have been pretty.
Over quantity. And so we've been really growing assets by bringing on higher quality teams, uh, that are focused on uh, higher net worth clients and so that will and that enables us to keep a high touch service model, uh, and really reinforce the value proposition of power personal.
Pretty consistent basis.
And doing it in a way that we feel sustainable we're really focused on quality over quantity and so we've been really growing assets by bringing on higher quality teams there.
Paul Shoukry: So we wanted to at least break it out for you to see, because that is a part of the expense. But so as we pay recruiters and we have to pay for account transfer fees and other things that support that growth. But again, organic growth is the number one capital priority in terms of capital deployment, so we'll continue to invest in that organic growth. We, 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.
So we wanted to at least break it out for you to see, because that is a part of the expense. But so as we pay recruiters and we have to pay for account transfer fees and other things that support that growth. But again, organic growth is the number one capital priority in terms of capital deployment, so we'll continue to invest in that organic growth. We, 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.
They are focused on higher net worth clients and so that will.
Paul M. Shoukry: Yeah. No. As you said, the growth has been phenomenal. Lower rates have certainly helped that growth. But as you point out, education, technology, the tools to tap into the securities-based lending product has been significant as well. And also, recruiting has driven growth. A lot of the advisors we're recruiting are coming with substantial SBL balances to their clients. So it's really an all-of-the-above approach. And we're optimistic long term about SBLs continuing to be used by clients because it's a great product for clients relative to other borrowing solutions out there. It's much more flexible, for example, than a home equity loan. And so there's other substitutes out there that are much more mature that people have much higher awareness of. And as they learn about securities-based loans, there's a lot of clients that are interested in it.
Paul M. Shoukry: Yeah. No. As you said, the growth has been phenomenal. Lower rates have certainly helped that growth. But as you point out, education, technology, the tools to tap into the securities-based lending product has been significant as well. And also, recruiting has driven growth. A lot of the advisors we're recruiting are coming with substantial SBL balances to their clients. So it's really an all-of-the-above approach. And we're optimistic long term about SBLs continuing to be used by clients because it's a great product for clients relative to other borrowing solutions out there. It's much more flexible, for example, than a home equity loan. And so there's other substitutes out there that are much more mature that people have much higher awareness of. And as they learn about securities-based loans, there's a lot of clients that are interested in it.
<unk>.
<unk> us to keep a high touch service model.
We really reinforced the value proposition of power person.
Thanks to that Paul. And then um, you know, given these stronger recruiting that, that we've seen and we're seeing in the results today. Um, but also elevated competition. Could we see the PCG comp ratio creep up in 2026, or does the 5 to 10 year, smoothing really protect the operating margins? Um, if recruiting in Nas's remain robust.
Thanks for that Paul and then.
Given the stronger recruiting that we've seen and we're seeing in our results today.
I'd also elevated competition could we see the <unk> comp ratio creep up in 2026 or does the five to 10 year smoothing really protect the operating margins.
Is remaining out there, and we'd much rather recruit one by one, where we know the advisors are good, a cultural fit, and 100% of what we pay in transition assistance is going to retention, uh, versus the seller. Um, and if we did do an acquisition, we would—that type of expense would typically be non-GAAP. So we wanted to at least break it out for you to see, uh, because that is a part of the expense. But so, as we pay recruiters and we have to pay for account transfer fees and other things that, uh, support that growth. But again, organic growth is a number one capital priority in terms of capital deployment. So we'll continue to invest, uh, in that organic growth. We are confident that generates the best long-term returns for our shareholders. And then growing the top line, uh, gives more opportunities for everyone and allows us to reinvest, uh, in the platform overall.
Craig Siegenthaler: Thanks, Paul.
Craig Siegenthaler: Thanks, Paul.
Yeah, I mean there's a lot of investment that goes into recruiting the reason we broke out the retention uh and transition assistance related expense for the first time this quarter because in the last 12 months we recruited advisors who had 460 million dollars at their prior firm. Uh that's that's the equivalent to a pretty decent sized acquisition in our space.
Recruiting in <unk> remained robust.
Thanks Paul.
Operator: Brennan Hawken from BMO Capital Markets has the next question.
Operator: Brennan Hawken from BMO Capital Markets has the next question.
Yes.
Yes, I mean, theres a lot of investment that goes into recruiting the reason we broke out the retention.
Brandon Hawkins from BMO Capital Markets has the next question.
Brennan Hawken: Hey, good evening, Paul, and Butch. Thanks for taking my questions. Curious, totally hear you on how robust the Capital Markets pipelines are, the need for the sponsors to engage, and absolutely hear you there. So it sounds like you guys are setting up for solid revenue growth as we come in to the coming year. You know, is that fair, or do you think that it's gonna take a little bit longer to come to market? The sort of revenue translation there has been, has been a bit long in the tooth, so to speak. And then when you eventually do get some revenue, you know, how should we be thinking about operating leverage on revenue growth?
Brennan Hawken: Hey, good evening, Paul, and Butch. Thanks for taking my questions. Curious, totally hear you on how robust the Capital Markets pipelines are, the need for the sponsors to engage, and absolutely hear you there. So it sounds like you guys are setting up for solid revenue growth as we come in to the coming year. You know, is that fair, or do you think that it's gonna take a little bit longer to come to market? The sort of revenue translation there has been, has been a bit long in the tooth, so to speak. And then when you eventually do get some revenue, you know, how should we be thinking about operating leverage on revenue growth?
Transition assistance related expense for the first time this quarter because in the last 12 months, we've recruited advisors, you're at $460 million of their prior firm.
That's the equivalent to a pretty decent size acquisition in our space.
Especially when you look at what is remaining out there and we'd much rather recruit one by one but we know the advisors are a good cultural fit and a 100% of what we pay in transition assistance is going to retention versus the seller.
Devin Ryan: All right. Great. All ready for it. Thanks a lot, guys.
Devin Ryan: All right. Great. All ready for it. Thanks a lot, guys.
Hey, good—uh, good evening, Paul, and Butch. Thanks for taking my questions. I'm curious—I totally hear you on how robust the, uh, capital markets pipelines are, and the need for the sponsors to engage, absolutely hear you there. So it sounds like you guys are setting up for solid revenue growth as we come in.
Paul M. Shoukry: Thanks, Devin.
Paul M. Shoukry: Thanks, Devin.
Butch Oorlog: Our final question today comes from Dan Fannon from Jefferies.
Operator: Our final question today comes from Dan Fannon from Jefferies.
[Analyst] (Seaport Global Securities): Great. Thanks. Paul, I was just hoping to get some context around the industry and how you're thinking about advisor movement here in 2026 and how that might differ from, say, last year.
Daniel Fannon: Great. Thanks. Paul, I was just hoping to get some context around the industry and how you're thinking about advisor movement here in 2026 and how that might differ from, say, last year.
And if we did do an acquisition you would.
Type of expense would typically be non-GAAP. So we wanted to at least break it out for you to see because that is a part of the expense. So as we pay recruiters and we have to paper account transfer fees and other things that.
Brennan Hawken: Is there a rubric or an algorithm we can, you know, just think about at a high level when we're confirming we've got, we're tuning up our forecast correctly?
Is there a rubric or an algorithm we can, you know, just think about at a high level when we're confirming we've got, we're tuning up our forecast correctly?
Especially when you look at, you know what, what is remaining out there and we much rather recruit 1 by 1 where we know the advisors are good, cultural fit and 100% of what we pay in transition assistance is going to retention versus the seller. Um, and when if we did do an acquisition we would that's that type of expense would typically be non-gaap. So we wanted to, at least break it out for you to see, uh, because that is a part of the expense. But so as we pay recruiters, and we have to pay for account transfer fees and other things that, uh, support that growth. But again, organic growth is the number 1 Capital priority in terms of capital deployment. So we'll continue to invest, uh, in that organic growth. We, we are confident that generates the best long-term returns for our shareholders. And then growing the Top Line, uh, gives more opportunities for everyone and allows us to reinvest uh, in the platform overall.
Thanks Paul.
Paul M. Shoukry: I think it's going to be based on our pipelines. We're optimistic about at least movement to Raymond James. I can't speak to movement to other firms. But we're pretty optimistic about the advisor movement to Raymond James. We're still viewed as a destination of choice. We're still viewed as a leading grower in the wealth space. So we're optimistic about it. And it's still early in the calendar year. So we'll see what happens. I think it depends on some of these roll-ups, what happens with them, if anything, over the next year. That'll be a potential catalyst as well. So we don't try to time things. Whether we recruit an advisor this year, next year, or five years from now, we're making decisions over the next five to 10 years.
Paul M. Shoukry: I think it's going to be based on our pipelines. We're optimistic about at least movement to Raymond James. I can't speak to movement to other firms. But we're pretty optimistic about the advisor movement to Raymond James. We're still viewed as a destination of choice. We're still viewed as a leading grower in the wealth space. So we're optimistic about it. And it's still early in the calendar year. So we'll see what happens. I think it depends on some of these roll-ups, what happens with them, if anything, over the next year. That'll be a potential catalyst as well. So we don't try to time things. Whether we recruit an advisor this year, next year, or five years from now, we're making decisions over the next five to 10 years.
Support that growth, but again organic growth is our number one capital priority in terms of capital deployment, we will continue to invest.
Brennan Hawkins from BMO Capital markets, has the next question.
To the coming year, um, you know, is that fair, or do you think that it's going to take a little bit longer to come to market? The sort of revenue translation there has been, uh, has been a bit long in the tooth, uh, so to speak. And then when you eventually do get some revenue, you know, how should we be thinking about operating leverage on revenue growth? Is there a rubric or an algorithm we can, you know, just think about at a high level when we're confirming we've got, uh, we're tuning up our, our, uh, forecast correctly.
Paul Shoukry: Yeah. No, we, I mean, we had a really strong quarter in investment banking just last quarter. So if you look at capital markets last quarter, it's over $500 million in revenues, and we certainly don't think that's a ceiling, but you saw how that impacted the operating leverage relative to this quarter. I think the pre-tax margin last quarter was around 17.5% in that segment. So there's a lot of operating leverage with higher levels of revenue and capital markets. We are optimistic about the pipeline, and, you know, we would be disappointed for the rest of the year if the revenue in the capital markets segment doesn't improve meaningfully above the $380 million level that it achieved this quarter.
Paul Shoukry: Yeah. No, we, I mean, we had a really strong quarter in investment banking just last quarter. So if you look at capital markets last quarter, it's over $500 million in revenues, and we certainly don't think that's a ceiling, but you saw how that impacted the operating leverage relative to this quarter. I think the pre-tax margin last quarter was around 17.5% in that segment. So there's a lot of operating leverage with higher levels of revenue and capital markets. We are optimistic about the pipeline, and, you know, we would be disappointed for the rest of the year if the revenue in the capital markets segment doesn't improve meaningfully above the $380 million level that it achieved this quarter.
And that organic growth, we are confident that generates the best long term returns for our shareholders.
Growing the topline.
Some more opportunities for everyone and allows us to reinvest in.
The platform overall.
Hey, good evening, Paul. Uh, and Bush, thanks for taking my questions. Um, curious. Totally hear you on how robust the uh, Capital markets pipeline are uh, the need for the sponsors to engage.
Thanks, Paul.
Yes.
Brendan Hawken from BMO capital markets has the next question.
Yes.
Hey, Peter.
Paul.
Thanks for taking my questions.
Sure.
Totally hear you on how robust the capital markets pipelines are.
Paul M. Shoukry: So we just want to make sure that we reinforce the unique culture that we have, the power of personal, the personal relationships we're building, and the client-first long-term culture and values that we have as an organization, and invest in the platform to make sure that we're competitive along all dimensions: technology, product, and support, and making sure that advisor satisfaction and client satisfaction are very high. We won the J.D. Power Award for the most trusted in our industry. Trust is critical in our space as well. And then we know that if we preserve that special combination of facets that make Raymond James so attractive, then we will continue to recruit advisors and retain our existing advisors with the high level of satisfaction that they have. And frankly, I could care less whether that happens this year or next year or five years from now.
So we just want to make sure that we reinforce the unique culture that we have, the power of personal, the personal relationships we're building, and the client-first long-term culture and values that we have as an organization, and invest in the platform to make sure that we're competitive along all dimensions: technology, product, and support, and making sure that advisor satisfaction and client satisfaction are very high. We won the J.D. Power Award for the most trusted in our industry. Trust is critical in our space as well. And then we know that if we preserve that special combination of facets that make Raymond James so attractive, then we will continue to recruit advisors and retain our existing advisors with the high level of satisfaction that they have. And frankly, I could care less whether that happens this year or next year or five years from now.
Need for sponsors to engage.
Absolutely hear you there so it sounds like you guys are setting up for solid revenue growth as we come in to the coming year.
Yeah no we um I mean we had a really strong uh quarter in Investment Banking just last quarter. Um so but if you look at Capital markets, last quarter is over 500 million in revenues and we certainly don't think that's a sealing. But you saw how that impacted the operating leverage relative to this quarter. I think the pre-tax margin last quarter, uh, was around 17 and a half percent in that segment so there's a lot of operating leverage with higher levels of Revenue and capital markets, we are optimistic about the pipeline and you know, we would be uh disappointed for the rest of the year if the revenue and the Capital Market segment doesn't improve meaningfully above the 380 million dollar level that it achieved this quarter.
Brennan Hawken: Okay. Got it. Thank you. And then a lot of questions around the outlook for recruiting and whatnot, certainly robust net new asset growth this quarter. Sort of following up on Craig's question around, because it has been volatile, it's moved around. And also, in the marketplace, there's a, you know, a couple deals out there that have been very much in focus, which could cause some maybe movement to be a bit more elevated. Did you see that? Did that impact you guys? Were you guys able to capitalize on some of that movement? And how long do you expect such disruption could create opportunity for you?
Brennan Hawken: Okay. Got it. Thank you. And then a lot of questions around the outlook for recruiting and whatnot, certainly robust net new asset growth this quarter. Sort of following up on Craig's question around, because it has been volatile, it's moved around. And also, in the marketplace, there's a, you know, a couple deals out there that have been very much in focus, which could cause some maybe movement to be a bit more elevated. Did you see that? Did that impact you guys? Were you guys able to capitalize on some of that movement? And how long do you expect such disruption could create opportunity for you?
And absolutely hear you there. So sounds like you guys are setting up for solid Revenue growth as we come in to the coming year. Um, you know is that fair or or do you think that it's going to take a little bit longer to come to market? The sort of Revenue translation. There has been has been a bit longer than the tooth so to speak and then when you eventually do get some Revenue you know how should we be thinking about operating leverage on Revenue growth? Is there a a rubber or an algorithm we can
Okay, got it. Thank you. Um, and then
Is that fair or do you think that it's going to take a little bit longer to come to market.
You know, just think about it on a high level. When we're confirming, we've got, we're tuning up. Our, our forecast correctly,
Revenue translation.
Is it a bit longer.
And then when you eventually do get some revenue how should we be thinking about operating leverage on revenue growth.
A lot of questions around, uh, the outlook for recruiting and whatnot—is certainly robust, uh, uh, net new asset growth this quarter. So, following up on Craig's question around that, because it has been volatile, it's moved around.
Is there a bluebird or an algorithm we can just think about it at a high level. One we are confirming.
And also in the marketplace, there's a couple deals out there that have been very much in focus, which could cause some—
We're cleaning up.
Yeah no we um I mean we had a really strong uh quarter of an investment banking just last quarter. Um so if you look at Capital markets, last quarter is over 500 million in revenues and we certainly don't think that's a sealing. But you saw how that impacted the operating leverage relative to this quarter. I think the pre-tax margin last quarter uh, was around 17 and a half percent in that segment. So
Cash directly.
Yes.
I mean, we had a really strong quarter in investment banking just last quarter. So if you look at capital markets last quarter was over $500 million and revenues and we certainly don't think that ceiling, but you saw how that impacted the operating leverage relative to this quarter I think the pre tax margin last quarter.
Maybe movement to be a bit more elevated. Did—did you see that, did that impact? Uh, were you—were you guys able to capitalize on some of that movement and, and how long do you expect, uh, such disruption could create opportunity for you?
Paul M. Shoukry: It's a marathon, not a sprint. And that's why when I hear other firms talk about, "Oh, we think next quarter, we're going to lean into recruiting and put a little bit more money into it," it's like, "Well, that's not sustainable long-term recruiting." It's a long-term process that requires a lot of investment. And if you dial up recruiting quarter by quarter or dial it down quarter by quarter, then you're not going to get the quality advisors that you want. You're going to get the advisors that are moving or not moving for the highest check. And that's not who we're targeting. We have to have a competitive check. But we want the advisors that want to be here over the long term to make more money and be satisfied here over the rest of their careers.
It's a marathon, not a sprint. And that's why when I hear other firms talk about, "Oh, we think next quarter, we're going to lean into recruiting and put a little bit more money into it," it's like, "Well, that's not sustainable long-term recruiting." It's a long-term process that requires a lot of investment. And if you dial up recruiting quarter by quarter or dial it down quarter by quarter, then you're not going to get the quality advisors that you want. You're going to get the advisors that are moving or not moving for the highest check. And that's not who we're targeting. We have to have a competitive check. But we want the advisors that want to be here over the long term to make more money and be satisfied here over the rest of their careers.
Paul Shoukry: ... Yeah, I mean, I hate to speak on any specific M&A or transactions. We have a lot of friendly competitors, and they're doing, you know, good jobs keeping the advisors, you know, through those transactions. So what I would speak to is just the broad-based strength. It's not one firm that we're seeing success from. You know, there's a lot of different firms. Advisors are coming from, you know, wires, regionals, other independents. And again, that value proposition, yeah, we have the largest addressable market across our affiliation options, from employee to independent contractor to the RIA custody, and we have critical mass and decades of experience in all of them. It's not a new venture for us. It's not something that we're testing out or trying out or, seeing how it would work.
Paul Shoukry: ... Yeah, I mean, I hate to speak on any specific M&A or transactions. We have a lot of friendly competitors, and they're doing, you know, good jobs keeping the advisors, you know, through those transactions. So what I would speak to is just the broad-based strength. It's not one firm that we're seeing success from. You know, there's a lot of different firms. Advisors are coming from, you know, wires, regionals, other independents. And again, that value proposition, yeah, we have the largest addressable market across our affiliation options, from employee to independent contractor to the RIA custody, and we have critical mass and decades of experience in all of them. It's not a new venture for us. It's not something that we're testing out or trying out or, seeing how it would work.
There's a lot of operating leverage with higher levels of Revenue and capital markets. We are optimistic about the pipeline and, you know, we would be uh, disappointed for the rest of the year if the revenue and the capital markets segments doesn't improve meaningfully above the 380 million level, that it's achieved this quarter.
It was around 17, 5% in that segment. So theres a lot of operating leverage with higher levels of revenue in capital markets. We are optimistic about the pipeline and we would be.
Okay, got it. Thank you. Um, and then a lot of questions around uh the outlook for recruiting and whatnot, the certainly robust
Disappointed.
Rest of the year, if the revenue in the capital market segment doesn't improve meaningfully above the $380 million level that it achieved this quarter.
Okay got it thank you.
Then.
A lot of questions around.
The outlook for crude and whatnot is certainly robust.
Yeah, I mean, I hate to speak on any specific M&A or transactions. We have a lot of friendly competitors, and they're doing, you know, good jobs keeping the advisors, uh, you know, through those transactions. So what I would speak to is just the broad-based strength. It's not the one firm that we're seeing success from, uh, you know, there's a lot of different firms advisors are coming from—you know, wires, regionals, other independents. And again, that value proposition—again, we have the largest addressable market across our affiliation options, from employee to independent contractor to the RIA custody, and we have critical mass and decades of experience in all of them. It's not a new venture for us.
[Analyst] (Seaport Global Securities): Understood. Thank you.
Daniel Fannon: Understood. Thank you.
Paul Shoukry: And so that value proposition, the cultural fit, the platform that I talked about, the multiple affiliation options, it's appealing to advisors from a lot of different firms.
And so that value proposition, the cultural fit, the platform that I talked about, the multiple affiliation options, it's appealing to advisors from a lot of different firms.
Net new asset growth this quarter.
Following up on Craig's question around as it has been volatile and some of the drought.
Paul M. Shoukry: I think we answered all your questions. Oh, sorry to interrupt. But I think we answered all your questions. I really appreciate your time on behalf of the Raymond James leadership team. We do not take your time or interest in Raymond James for granted. Stay warm over the next several days here. Look forward to seeing and talking to all of you soon.
Paul M. Shoukry: I think we answered all your questions. Oh, sorry to interrupt. But I think we answered all your questions. I really appreciate your time on behalf of the Raymond James leadership team. We do not take your time or interest in Raymond James for granted. Stay warm over the next several days here. Look forward to seeing and talking to all of you soon.
And also in the marketplace, there's, you know, a couple deals out there that have been very much in Focus which could cause some maybe movement to be a bit more elevated. Did you see that did that impact? Uh, you guys, when you guys are able to capitalize on some of that movement and and how long do you expect, uh, such disruption, could create opportunities for you?
And also in the marketplace there is.
It's not something that we're testing out, or trying out, or seeing how it would work. And so that value proposition, the cultural fit, the platform that I talked about, the multiple affiliation options—it's appealing to advisors from a lot of different firms.
Butch Oorlog: Okay, thanks for taking my question.
Brennan Hawken: Okay, thanks for taking my question.
A couple of deals out there that have been very much in focus which could cause some.
Okay, thanks for taking my question.
Operator: Up next, we'll hear from Bill Katz from TD Cowen.
Operator: Up next, we'll hear from Bill Katz from TD Cowen.
Maybe movements to be a bit more elevated.
We'll hear from Bill Katz from TD Cowen.
Bill Katz: Okay, thank you very much, taking the question. Just coming back to the M&A, I hear you on organic growth, and it seems like the pipeline there is quite good. Just wonder if you could unpack maybe the Clark transaction a little bit, how to think about the accretion to that. And then, how should we be thinking about where you might be interested in terms of incremental, inorganic opportunities, given such a strong balance sheet, and maybe trying to understand the path back to a 10% Tier 1 leverage ratio. Thank you.
Bill Katz: Okay, thank you very much, taking the question. Just coming back to the M&A, I hear you on organic growth, and it seems like the pipeline there is quite good. Just wonder if you could unpack maybe the Clark transaction a little bit, how to think about the accretion to that. And then, how should we be thinking about where you might be interested in terms of incremental, inorganic opportunities, given such a strong balance sheet, and maybe trying to understand the path back to a 10% Tier 1 leverage ratio. Thank you.
See that did that impact you guys are you guys able to capitalize on some of that movement and.
Butch Oorlog: Once again, everyone, that does conclude today's conference. We would like to thank you all for your participation. You may now disconnect.
Operator: Once again, everyone, that does conclude today's conference. We would like to thank you all for your participation. You may now disconnect.
And how long do you expect.
Such disruption.
Create opportunities for you.
Yeah, I mean, I hate to speak on any specific m&a, or transactions. We have a lot of friendly competitors and they're doing, you know, good jobs keeping the advisors, uh, you know, through those transactions. So, what I would speak to is just the broad-based strength. It's not the 1 verb that we're seeing success from, uh, you know, there's a lot of different fronts advisors are coming from, you know, wires regionals, other Independents. Uh, and again that value
Yes.
Speak on any specific M&A, our transactions, we have a lot of friendly competitors theyre doing good job keeping the advisors through.
Through those transactions, so what I would speak to just the broad based strength thats not one firm that we're seeing success from there's a lot of different types of advisors.
Organic opportunities, given such a strong balance sheet, and maybe trying to understand the path back to a 10% Tier 1 leverage ratio. Thank you.
Paul Shoukry: Thanks, Bill. Yeah, Clark Capital is really a perfect representation of our M&A priorities, and that's first and foremost a firm that has a good cultural fit. The Clark family, who started the firm and the team, the entire team there, are client-focused, long-term focused, and exactly approach the business in a very similar way that we approach it with our values and our culture. And then it's a strategic fit in terms of their focus on treating advisors like clients. We're gonna maintain the independence that Clark has, both in terms of brand and the way they interface with their clients, not our clients, but their clients. And so the cultural fit, the strategic fit, and then the financials have to make sense for both us and for the sellers.
Paul Shoukry: Thanks, Bill. Yeah, Clark Capital is really a perfect representation of our M&A priorities, and that's first and foremost a firm that has a good cultural fit. The Clark family, who started the firm and the team, the entire team there, are client-focused, long-term focused, and exactly approach the business in a very similar way that we approach it with our values and our culture. And then it's a strategic fit in terms of their focus on treating advisors like clients. We're gonna maintain the independence that Clark has, both in terms of brand and the way they interface with their clients, not our clients, but their clients. And so the cultural fit, the strategic fit, and then the financials have to make sense for both us and for the sellers.
Coming from wires regionals are they're independent.
Again that value proposition and we have the largest addressable market.
Proposition. Yeah, we have the largest addressable market across our affiliation options from employee to independent contractor, to the Ria custody and we have critical mass and Decades of experience in all of them. It's not a new Venture for us. It's not something that we're testing out, or trying out or seeing how it would work. And so that value proposition. The cultural fit the platform that I talked about the multiple affiliation options, it's appealing to advisors from a lot of different firms.
Filiation options from employees independent contractor to the RIAA custody, and we have critical mass and decades of experience at all.
Okay, thanks for checking my questions.
Up next, you'll hear from Bill cats, from TD Cowen.
New venture for Us, it's not something that we're testing out of trying out or being out.
And so that value proposition of the cultural fit the platform that I talked about that multiple affiliation options, it's appealing to advisers from a lot of different firms.
Okay. Thanks for taking my questions.
Okay, thank you very much for taking the question. Um, just, uh, just coming back to the m&a. I hear you on organic growth. It seems like the pipeline. There is quite good. So if you could unpack, maybe the Clark transaction, a little bit, how to think about the accretion to that. And then how should we be thinking about where you might be interested in terms of incremental, uh, inorganic opportunities given
Next we'll hear from Bill Katz.
Paul Shoukry: And so, that was the case here as well. And so we are very excited. They're high growth, high organic growth, differentiated product, but really, really deep personal relationships with their clients, which is what was so appealing about Clark Capital. And those are the type of deals we're going to look at across all of our businesses, is firms that have good cultural fit, strategic fit, and makes financial sense for us and for the sellers. And so we're very active. We have a active corporate development apparatus. We have a lot of capital, and we're confident with our ability to integrate, and so we're going to continue to look for deals that make sense, but we're not going to force deals just to do deals.
And so, that was the case here as well. And so we are very excited. They're high growth, high organic growth, differentiated product, but really, really deep personal relationships with their clients, which is what was so appealing about Clark Capital. And those are the type of deals we're going to look at across all of our businesses, is firms that have good cultural fit, strategic fit, and makes financial sense for us and for the sellers. And so we're very active. We have a active corporate development apparatus. We have a lot of capital, and we're confident with our ability to integrate, and so we're going to continue to look for deals that make sense, but we're not going to force deals just to do deals.
Cowen.
Okay. Thank you very much for taking the question just.
Um, such a, a strong balance sheet, um, and maybe trying to understand the path back to a 10%. Tier 1, leverage ratio. Thank you.
Coming back to the M&A I hear you on organic growth. It seems like the pipeline there is quite good.
Maybe the car transaction, a little bit how to think about the accretion to that and then how should we be thinking about where you might be interested in terms of incremental.
Thanks Bill. Um, yeah. Clark capital is really a perfect, uh, representation of our m&a priorities. And, and that's first and foremost, uh, firm that has a good cultural fit, uh, the the Clark family who started the firm and the team, the entire team there. Our client focused long-term focused. Uh, and exactly, uh, approach the business in a very similar way, that we approach it, uh, with our values and our culture. Uh, and then, as a strategic fed, in terms of uh, their focus on treating the advisors like clients, uh, we're going to, uh, maintain the Independence that Clark has both in terms of brand, and uh, the way they interface with their clients, not our clients but their clients. And so, uh, the cultural fit the Strategic fit and then, uh, the financials have to make sense for both us and for the sellers. And so, uh, that was the case here as well. Uh, and so we are very excited, they're high growth, High organic growth, uh differentiated product, but really, really deep personal relation.
Inorganic opportunities given.
Such a strong balance sheet.
And maybe I'm trying to understand the path back to a 10% tier one leverage ratio. Thank you.
Yes.
Thanks Bill.
Capital is really a perfect.
Representation of our M&A priorities.
Thanks Bill. Um yeah. Clark capital is really a perfect, uh, representation of our m&a priorities. And and that's the first and foremost firm that has a good cultural fit. Uh, the the Clark family who started the firm and the team the entire team there. Our client focused long-term focused, uh, and exactly approach the business in a very similar way that we approach it uh with our values and our culture. And then as a strategic fit in terms of their focus on treating advisors like clients, uh we're going to uh
First and foremost firm that has a good cultural fit.
Paul Shoukry: They have to make sense for our shareholders over the long term.
They have to make sense for our shareholders over the long term.
The card family, who started the firm in the team the entire team there our client focused long term focus.
Relationships with their clients. Uh, which is, uh, what what it was. So appealing about Clark capital and those are the type of deals. We're going to look at across all of our businesses as firms that have good, cultural fit, strategic fit, and makes Financial sense for us and for, uh, the the sellers. Uh, and so we're very active, we have a active corporate development apparatus. We have a lot of capital, uh, and we we're confident with our ability to integrate. And so, we're going to continue to look for deals, that make sense, but we're not going to force deals, just to do deals. Uh, they have to make sense for our shareholders over the long term.
Bill Katz: Okay, thank you. And just as a follow-up, maybe it's a two-part, so I apologize for squeezing it in. Can you talk a little bit about the path to support the interest earning asset growth from here, and how you sort of see the interplay of the sort of liquidity on a third party versus maybe cash coming in the door net new assets? And then, if you could just review what you said in terms of the January numbers. The way it was phrased, I wasn't quite clear if you were down 1.8 for the quarter or down something less from that, inclusive of billings and activity. If you could just clarify, that'd be helpful. Thank you.
Bill Katz: Okay, thank you. And just as a follow-up, maybe it's a two-part, so I apologize for squeezing it in. Can you talk a little bit about the path to support the interest earning asset growth from here, and how you sort of see the interplay of the sort of liquidity on a third party versus maybe cash coming in the door net new assets? And then, if you could just review what you said in terms of the January numbers. The way it was phrased, I wasn't quite clear if you were down 1.8 for the quarter or down something less from that, inclusive of billings and activity. If you could just clarify, that'd be helpful. Thank you.
<unk> approached the business in a very similar way that we approach it with our values and our culture and then it's a strategic fit in terms of their focus on treating advisers like clients.
Maintain it.
Independent forecasts, both in terms of brand and the way they interface with their clients are clients that their clients and so.
Maintain, the independence of cork has both in terms of brand, and the way the interface with their clients, not our clients but their clients. And so, um, the cultural fit, the Strategic fit and then the financials have to make sense for both us and for the sellers. And so, uh, that was the case here as well. Uh and so we are uh very excited. They're high growth, High organic growth, uh differentiated products. But really, really deep personal relationships with their clients
Uh which is, uh what what it was. So appealing about Clark capital and those are the type of deals. We're going to look at across all of.
The cultural fit the strategic fit and then the financials have to make sense for both us and for the sellers and so that.
That was the case here as well.
Okay, thank you. And just as a follow-up, may, maybe it's a 2-part, so I apologize for squeezing it in. Can you talk a little bit about the path to support the, uh, interest earning asset growth from here? And how you sort of see the interplay of the sort of liquidity on a third party versus maybe cash coming in the door that new assets. And then if you could just review, what you said in terms of the January numbers, um, the way it was phrased, I wasn't quite clear. If you were down 1.8 for the quarter or down to something, less than that inclusive of Billings and activity. If you could just clarify, that would be helpful. Thank you.
So we are very excited they're high growth high organic growth.
Butch Oorlog: Yeah. So, hey, Bill, in terms of where we stand currently in January, our total combined program sweep and ESP balances are down $2.6 billion, which includes the $1.8 billion fee billing, which have already come out of the accounts as we indicated. And what we're seeing for that difference is strong client reinvestment of their balances for the rest of it. The breakdown between sweep program and ESP balances of that $2.6 is, we've seen $2.1 billion of that in the sweep program and about $500 million of that in the ESP program since the quarter-end balance.
Butch Oorlog: Yeah. So, hey, Bill, in terms of where we stand currently in January, our total combined program sweep and ESP balances are down $2.6 billion, which includes the $1.8 billion fee billing, which have already come out of the accounts as we indicated. And what we're seeing for that difference is strong client reinvestment of their balances for the rest of it. The breakdown between sweep program and ESP balances of that $2.6 is, we've seen $2.1 billion of that in the sweep program and about $500 million of that in the ESP program since the quarter-end balance.
<unk> product, but it really really deep personal relationships with their clients.
What feelings about hard capital.
These are the type of deals we're going to look at across all of our businesses firms that have good cultural fit strategic fit and makes financial sense for us and for us.
Our businesses, it's firms that have good cultural fit, strategic fits, and makes Financial sense for us and for, uh, the the sellers. Uh, and so we're very active. We have a active corporate development apparatus. We have a lot of capital, uh, and we've we're confident with our ability to integrate. And so, we're going to continue to look for deals, that make sense, but we're not going to force deals, just to do deals. Uh, they have to make sense for our shareholders over the long term.
And so we're very active we have active corporate development apparatus, we have a lot of capital.
We are confident with our ability to integrate and so we're going to continue to look for deals that make sense, but we're not going to force deals just to do deals they have to make sense for our shareholders over the long term.
Okay, thank you. And just as a follow-up, may, maybe it's a 2-part, so I apologize for squeezing it in. Can you talk a little bit about the path to support the, uh, interest earning asset growth from here? And how you sort of see the interplay of the sort of liquidity on a third party versus maybe cash coming in and doing that new assets? And then, if you could just review, what you said, in terms of the January numbers, um, the way it was phrased, I wasn't quite
Okay. Thank you and just as a follow up maybe to parse I apologize for squeezing it in.
Paul Shoukry: So yeah, we're continuing to see, like others that have reported, a shift in the mix, bigger percentage declines in the enhanced savings program balances. As rates come down, you know, clients are... You know, those high yield savings rates are less appealing, especially relative to the market. So we're seeing more investment in the market versus higher yielding alternatives, at least over the last couple of quarters, as rates started really coming down, which lowers the weighted average mix or the weighted average cost of deposit between sweeps and enhanced savings programs. To answer your question about ongoing long-term growth, I mean, you saw securities-based loans grow close to $2 billion this quarter alone. And so the growth is attractive.
Paul Shoukry: So yeah, we're continuing to see, like others that have reported, a shift in the mix, bigger percentage declines in the enhanced savings program balances. As rates come down, you know, clients are... You know, those high yield savings rates are less appealing, especially relative to the market. So we're seeing more investment in the market versus higher yielding alternatives, at least over the last couple of quarters, as rates started really coming down, which lowers the weighted average mix or the weighted average cost of deposit between sweeps and enhanced savings programs. To answer your question about ongoing long-term growth, I mean, you saw securities-based loans grow close to $2 billion this quarter alone. And so the growth is attractive.
Yeah. So hey Bill uh, in terms of the where we stand, uh uh, currently in January our, our our total uh combined, uh, program sweep out. Uh, sweep in ESP, balances are down 2.6 billion, which includes the 1.8 billion, uh, fee billing, which have already come out of the account. So, as we indicated, um, and what we're seeing for that that difference is, is uh, strong client reinvestment, um, uh, uh, of, uh, of their balance is uh, for, for the, for the rest of it. Uh, the breakdown between sweet program and ESP, balances of that 2 of that, that 2.6 is, we've seen 2.1 billion of that in the sweep program and about 500 million of that in the ESP program since uh the quarter in balance,
Talk a little bit about the patch to support the interest earning asset growth from here and how you sort of see the interplay of the liquidity on the third party versus maybe cash coming in the door and net new assets and then if you could just review what you said in terms of the January numbers. The way. It was phrased that wasn't quite quick clear if you were down one eight.
Quick, clear. If you were down 1.8 for the quarter or down something less than that inclusive of Billings and activity, if you could just clarify, that would be helpful. Thank you.
For the quarter or down something less from that inclusive of billings and activity. If you could clarify that'd be helpful. Thank you.
Yes.
Bill.
In terms of the where we stand.
Currently in January.
So yeah, we're continuing to see like, others that have reported, um, a shift of of the mix of bigger percentage, declines in the enhanced saving program balances as rates come down. Uh, you know, clients are, uh, you know, those those high yield savings rates are less appealing, especially relative to, uh, the market. So, we're seeing more investment in the market versus higher yielding Alternatives. Uh, at least over the last couple quarters as rates started really coming down, uh, which lowers the weighted average mix or the weighted average cost of deposit between sweeps and enhanced savings programs.
Our total combined.
Progress suite.
Sleep Inn ESP balances are now two 6 billion, which includes the $1 8 billion fee billing, which have already come out of the account.
Paul Shoukry: That's the flip side of the lower rates, that the floating rate loans become more attractive, and you saw that this past quarter as well. We'll fund it with the diversified funding sources that we have, both the sweep cash we have, third-party cash that we could redeploy, but also we have diversified deposit gathering apparatus, particularly at TriState Capital Bank. So we'll look at all of those levers to fund future growth going forward.
That's the flip side of the lower rates, that the floating rate loans become more attractive, and you saw that this past quarter as well. We'll fund it with the diversified funding sources that we have, both the sweep cash we have, third-party cash that we could redeploy, but also we have diversified deposit gathering apparatus, particularly at TriState Capital Bank. So we'll look at all of those levers to fund future growth going forward.
<unk>.
And what we're seeing for that.
Program at ESP. Balances of that 2 of that 2.6 is we've seen 2.1 billion of that in the sweep program and about 500 million of that in the ESP program since uh the quarter in balance,
Differences.
Strong client reinvestment.
Their balances.
For the rest of it the breakdown between Sweet program at USD balances in that too.
So yeah, we're continuing to see like, others that have reported, um, a shift of of the mix of bigger percentage. Declines in the enhanced saving program balances as rates come down.
We've seen $2 1 billion of that as we progress and.
About $500 million that in the ESP program.
To answer your question about the ongoing long-term growth. I mean you sell security space loans grow close to 2 billion dollars, this quarter alone. Uh, and so the growth is attractive, that's the flip side of the lower rates uh that the floating rate, loans, become more attractive. And you sell that this past quarter as well and we'll fund it with a diversified funding sources that we have, both the sweep cash, we have third-party cash, uh, that we could redeploy. Uh, but also we have, uh, Diversified deposit Gathering, uh, apparatus, uh, particularly at tristate Capital Bank, uh, and so, we'll, we'll look at all of those levers to, uh, fund future growth, going forward.
Bill Katz: Okay. Thank you, and thank you for clarifying.
Bill Katz: Okay. Thank you, and thank you for clarifying.
Quarter end balance.
Okay, thank you. And thank you for clarifying.
Operator: The next question is from Steven Chubak, from Wolfe Research.
Operator: The next question is from Steven Chubak, from Wolfe Research.
Yeah, we're continuing to see like others that have reported.
The next question is from Stephen Tu, back from Wolfe Research.
A shift of the mix bigger percentage declines in the enhanced saving program balances as rates come down.
Steven Chubak: Hi, good evening. Thanks for taking my questions.
Steven Chubak: Hi, good evening. Thanks for taking my questions.
Hi, good evening. Thanks for taking my questions.
Paul Shoukry: Hey, Steven.
Paul Shoukry: Hey, Steven.
Steven Chubak: So, hey, Paul. So I wanted to drill down into the M&A results and the outlook. You know, recognizing that the pipeline strength you cited also acknowledge one quarter does not a trend make. But if I compare, for the calendar year, full year 2025 versus 2024 advisory results, the gap between you and peers was quite substantial. I think you guys were down 20%. Peers, big and small, were both up about 20. And I was hoping you could just speak to any idiosyncratic factors that might have weighed disproportionately on your results, whether it's a function of client or sector mix. And just bigger picture, in the past, you had talked about this $1 billion target in M&A fees based on your current scale. Do you still view that as a credible target? And what actions are you taking to help narrow that gap?
Steven Chubak: So, hey, Paul. So I wanted to drill down into the M&A results and the outlook. You know, recognizing that the pipeline strength you cited also acknowledge one quarter does not a trend make. But if I compare, for the calendar year, full year 2025 versus 2024 advisory results, the gap between you and peers was quite substantial. I think you guys were down 20%. Peers, big and small, were both up about 20. And I was hoping you could just speak to any idiosyncratic factors that might have weighed disproportionately on your results, whether it's a function of client or sector mix. And just bigger picture, in the past, you had talked about this $1 billion target in M&A fees based on your current scale. Do you still view that as a credible target? And what actions are you taking to help narrow that gap?
Clients are.
Those those high yield savings rates are less appealing, especially relative to.
The market. So we're seeing more investment in the market versus higher yielding alternatives.
So over the last couple of quarters as rates started really coming down.
The weighted average mix or the weighted average cost of deposits between reach and enhanced savings probably.
Uh, you know, clients are, uh, you know, those those high yield savings rates are less appealing, especially relative to, uh, the market. So, we're seeing more investment in the market versus higher yielding Alternatives. Uh, at least over the last couple quarters as rates started really coming down, uh, which lowers the weighted average mixer, the weighted average cost of deposit between Suites and enhanced savings programs. To answer your question about ongoing long-term growth, I mean you sell security space loans grow close to 2 billion dollars, this quarter alone. Uh and so the growth is attractive, that's the flip side of the lower rates uh that floating rate, loans, become more attractive and you sell that this past quarter as well and we'll fund it with a diversified funding sources that we have. Both the sweep cast, we have third-party cash uh, that we could redeploy. Uh, but also
The answer to your question about ongoing long term growth I mean, you saw securities based loans grow close to $2 billion this quarter alone.
Also, we have uh, Diversified deposit Gathering, uh, apparatus particularly a tristate Capital Bank.
And so the growth is attractive that's the flip side of the lower rates.
And so we'll we'll look at all of those levers to uh fund future growth, going forward.
Floating rate loans become more attractive and you saw that this past quarter as well I will fund it with a diversified funding sources that we have cash we have third party cash that we could redeploy but also we have <unk>.
Okay, thank you. And thank you for clarifying.
The next question is from Stephen Tubac. From Wolfe research.
Send the Outlook, you know, recognizing that the pipeline strength, you cited, also of knowledge, 1 quarter does not a trend make but if I compare um for the calendar year full year, 25 versus 24 ADV results. The gap between you and peers was quite substantial. I think you guys were down 20%. Uh, peer is big and small. We're both up about 20 and I was hoping you could just speak to any idiot factors that might have weighed disproportionately on your results. Whether it's a function of client or sector mix and just bigger picture in the past. You had talked about this 1 billion Target in m&a, fees based on your current scale, do you still view that as a credible Target? And what actions are you taking to help narrow? That Gap?
Hi, good evening. Thanks for taking my question.
Paul Shoukry: Yeah, I mean, we're adding a lot of MDs and have been adding a lot of MDs and high quality MDs in investment banking across various sectors for the last several years. So, you know, in terms of comparisons, it really is hard to compare apples to apples. Like you mentioned, the bigger firms. Last year was a better year for public company M&A, bulge bracket M&A, and that's, as you know, not a space that we really compete or play in. So when you compare mid-market growth-oriented firms to the public company firms for the year overall last year, the public company M&A, the bulge bracket M&A, definitely led the way in the recovery.
Paul Shoukry: Yeah, I mean, we're adding a lot of MDs and have been adding a lot of MDs and high quality MDs in investment banking across various sectors for the last several years. So, you know, in terms of comparisons, it really is hard to compare apples to apples. Like you mentioned, the bigger firms. Last year was a better year for public company M&A, bulge bracket M&A, and that's, as you know, not a space that we really compete or play in. So when you compare mid-market growth-oriented firms to the public company firms for the year overall last year, the public company M&A, the bulge bracket M&A, definitely led the way in the recovery.
Versify deposit gathering apparatus, particularly at Tristate capital Bank.
And so we will look at all of those levers to fund future growth going forward.
Okay. Thank you and thank you for clarifying.
The next question is from Steven <unk> from Wolfe Research.
Hi, good evening, thanks for taking my questions.
Thanks Steven.
Hey, Paul So I wanted to drill down into the M&A resolve 10, the outlook recognizing that pipeline strength you sided false.
To acknowledge one quarter does not a trend make.
Paul Shoukry: And that's not atypical if you look at history, where both on the way up and on the way down, it seems like public company M&A sort of leads the way. And then every firm, even on the regional side or the growth-oriented side, has different strengths and sectors. You know, the depository sectors, some firms have, you know, long-standing, deep businesses and depositories, for example, which has really seen a pickup in the new administration approving deals. And you kind of have to go sector by sector. But we feel very confident with our expertise, with the sectors that we are very good in, in our pipelines. And so I hate to compare things quarter to quarter.
And that's not atypical if you look at history, where both on the way up and on the way down, it seems like public company M&A sort of leads the way. And then every firm, even on the regional side or the growth-oriented side, has different strengths and sectors. You know, the depository sectors, some firms have, you know, long-standing, deep businesses and depositories, for example, which has really seen a pickup in the new administration approving deals. And you kind of have to go sector by sector. But we feel very confident with our expertise, with the sectors that we are very good in, in our pipelines. And so I hate to compare things quarter to quarter.
If I compare.
Yeah, I mean, we're we're adding a lot of MDS and, uh, have added that have been adding a lot of MDS and high-quality MDS, and invest in banking across various sectors for the last several years. So, um, you know, in terms of comparisons, it really is hard to compare apples to apples. Like, you, you mentioned the bigger firms. Uh, last year was a better year for public company m&a, bulge bracket m&a. And that's as you know, not a space that we really compete or play in. Uh, so when you compare mid-market growth oriented firms to the public company firms for the year overall last year, uh, the public company m&a, the Bulls bracket m&a, definitely led the way in the recovery, and that's not
For the calendar year full year 2005 versus 24 advisory resolved gap between you and peers was quite substantial I think you guys were down 20%.
Hey, Stephen so hey Paul. So I wanted to drill down into the m&a results and the Outlook, you know, recognizing that the pipeline strength. You sighted also acknowledge 1 quarter does not a trend make but if I compare um for the calendar year full year, 25 versus 24 ADV results. The gap between you and peers was quite substantial. I think you guys were down 20%. Uh, peer is big in smaller, boats up about 20 and I was told you could just speak to any idiot factors that might have weighed disproportionately on your results. Whether it's a function of client or sector mix and just bigger picture in the past. You had talked about this 1 billion Targets in m&a, fees, based on your current scale, do you still view that as a credible Target? And what actions are you taking to help narrow? That Gap?
Peer is big and small are both up about 20, and I was hoping you could just speak to any factors that might have weighed disproportionately on your results, whether it's a function of client or sector mix and just bigger picture in the past you had talked about this $1 billion target and M&A fees based on your current scale.
Yeah, I mean, we're we're adding a lot of MDS and, uh, have added that have been adding a lot of MDS, and high quality MDS, and Investment Banking across various sectors for the last several years. So, um, you know, in terms of comparison, it really is hard to compare apples to apples. Like, you, you mentioned the bigger firms?
Al do you still view that as a credible target and what actions you are taking to help narrow that gap.
Paul Shoukry: There's some quarters we do a lot better, and we tell you, "Don't overindex that because, you know, it's timing." And I would tell you, in this type of quarter where we're doing, you know, worse, then I would say, "Don't overindex that either." The investment banking is not a recurring revenue business, as you know, as like the private client group business is. So you really do have to look at long-term trends. And if you look at our long-term trend in growth of investment banking over the last 5 to 7 years, which we'll highlight again on our Analyst Investor Day, it's been very strong and attractive relative to our peers.
There's some quarters we do a lot better, and we tell you, "Don't overindex that because, you know, it's timing." And I would tell you, in this type of quarter where we're doing, you know, worse, then I would say, "Don't overindex that either." The investment banking is not a recurring revenue business, as you know, as like the private client group business is. So you really do have to look at long-term trends. And if you look at our long-term trend in growth of investment banking over the last 5 to 7 years, which we'll highlight again on our Analyst Investor Day, it's been very strong and attractive relative to our peers.
Yes, I mean, we're adding a lot of Mds.
How about it.
<unk> been adding a lot of Mds and high quality Mds in investment banking across various sectors over the last several years. So.
In terms of comparison, it really is hard to compare apples to apples like you mentioned the bigger firms.
Last year was a better year for public company M&A Bolds bracket, M&A and Thats as you know not a space that we really compete play.
Atypical, if you look at the history where both, on the way up and on the way down it seems like public company m&a, sort of leads the way and then every firm even on the regional side or the the growth oriented side has different strengths and sectors. Uh, you know, the depository sectors, some firms. Have, you know, uh, long-standing, uh, deep, uh, deep businesses and depositories, for example, which is really seen a pickup in the new Administration proving deals, uh, and you kind of have to go sector by sector. But we we feel very confident with our expertise with the, the, the sectors that we are very good in in our pipelines. And so I, I hate to compare things quarter to quarter. There's some quarters, we do a lot better. And we tell you don't over index that because, you know, it's timing. And I would tell you in this type of quarter where we're doing, uh, you know, worse than I would say, don't over index that either the investment banking is not a recurring Revenue business as you know, as like the private client group businesses. Uh, so you really do have to look at
When you compare mid market growth oriented firms to the public company farms for the year overall last year.
Long-term trends. And if you look at our long-term trend and growth of investment banking over the last five to seven years, which we'll highlight again at our Analyst Investor Day, it's been very strong and attractive relative to our peers.
Steven Chubak: So thanks for that. And, Paul, if I could just squeeze into what's called more ticky-tack modeling questions. Non-comps have grown double digits the last three years. The 8% guide is encouraging, reflects some moderation and growth. Just given the commitment to investing, do you feel like you can continue to hold the line and bend the cost curve on non-comps? And I'll just mention the other one now. The M&A growth was impressive. The AUM growth, admittedly, lagged our expectations, given stronger organic flows and market appreciation. And was hoping you could speak to why that better M&A flow rate didn't necessarily translate into as strong AUM conversion, which I know can happen from time to time.
Steven Chubak: So thanks for that. And, Paul, if I could just squeeze into what's called more ticky-tack modeling questions. Non-comps have grown double digits the last three years. The 8% guide is encouraging, reflects some moderation and growth. Just given the commitment to investing, do you feel like you can continue to hold the line and bend the cost curve on non-comps? And I'll just mention the other one now. The M&A growth was impressive. The AUM growth, admittedly, lagged our expectations, given stronger organic flows and market appreciation. And was hoping you could speak to why that better M&A flow rate didn't necessarily translate into as strong AUM conversion, which I know can happen from time to time.
The public company M&A record M&A definitely led the way in the recovery and Thats not atypical if you look at the history, where both on the way up and on the way down it seems like public company M&A sort of lead the way and then every firm even on the regional side or the growth oriented size have different strengths and sectors.
Uh, last year was a better year for public company m&a, bolts bracket m&a. And that's as you know, not a space that we really compete or play in. Uh, so when you compare market growth oriented firms, to the public company firms for the year overall last year, uh, the public company, m&a to both bracket m&a, definitely led the way in the recovery and that's not atypical. If you look at the history where both, on the way up and on the way down it seems like public company m&a, sort of leads the way and then every firm, even on the regional side, or the the growth oriented side, have different strengths and sectors. Uh, the other depository, sectors, some firms have, you know, long-standing deep. Uh, deep businesses and depositories, for example, which is really seen a pickup in the new Administration proving deals.
The other depository sector some firms.
Thanks for that. And, uh, Paul, if you could just squeeze in—to let's call them—more Tiki-Tac modeling questions: non-comps have grown double digits the last three years. The 8% guide is encouraging, reflects some moderation in growth, just given the commitment to investing. Do you feel like you can continue to hold the line and bend the cost curve on non-comps?
Long standing.
<unk>.
The businesses in Depository for example, which has really seen a pickup in the new administrations proving deals.
And you kind of have to go sector by sector, but we feel very confident with our expertise within sectors that we are very good.
Our pipelines and so I hate to compare things quarter to quarter. There are some quarters, we do a lot better and we tell you don't over index that because timing and.
And I'll just mention the other one now. Um, the NNA growth was impressive. The AUM growth, admittedly, um, lagged our expectations given strong organic flows and market appreciation. I was hoping you could speak to why that better NNA flow rate didn't necessarily translate into as strong AUM conversion, which I know can happen from time to time.
Paul Shoukry: Yeah. I'll-- Let me take the last part of the question first, and then I'll have Butch touch on your first part of the question on the cost curve. But it is a good question around AUA, 'cause I was comparing our overall AUA and flows to some of the others that reported. And I think really where you see that relationship make sense is if you look at our fee-based assets. And the fee-based assets were up 19%, which if you compare to the other firms that reported and their net new assets, you would see the relationship that you're expecting. So, I would kind of look at that as a proxy for fee-based assets versus overall firm-wide AUA, and I'll have Butch talk about the non-comp trajectory.
Paul Shoukry: Yeah. I'll-- Let me take the last part of the question first, and then I'll have Butch touch on your first part of the question on the cost curve. But it is a good question around AUA, 'cause I was comparing our overall AUA and flows to some of the others that reported. And I think really where you see that relationship make sense is if you look at our fee-based assets. And the fee-based assets were up 19%, which if you compare to the other firms that reported and their net new assets, you would see the relationship that you're expecting. So, I would kind of look at that as a proxy for fee-based assets versus overall firm-wide AUA, and I'll have Butch talk about the non-comp trajectory.
Uh, worse than I would say, don't over-index that either the investment banking is not a recurring Revenue business, as, you know, as like the private client group businesses. Uh, so you really do have to look at long-term trends. And if you look at a long-term Trend and growth of investment banking over the last 5 to 7 years, which will highlight again other analysts investor day, it's been very strong and attractive relative to our peers.
I would tell you in this type of quarter, what we're doing.
Worse than I would say don't over index that either investment banking is not a recurring revenue business as you know as like the private client group businesses. So you really do have to look at long term trends and if you look on a long term trend in growth of investment banking over the last five years to seven years with will highlight again, our analyst Investor day, it's been very strong in <unk>.
Relative to our peers.
Okay. Thanks for that.
If I could just squeeze into let's call them more <unk> tack modeling question non comps have grown double digit the last three years, 8% guide is encouraging reflects some moderation in growth just given the commitment to investing do you feel like you can continue to hold the line and then the cost curve on non comps.
Yeah, I'll let me take the last part of the question first. And then I'll have Butch touch on, uh, your first part of the question, um, on the cost curve. But, uh, it is a good question around AUA because I was comparing our overall AUA and flows to some of the others that were reported. And, and I think really where you see that uh relationship makes sense as if you look at our feed based assets, uh, and the feed based assets were up 19% which if you compared to the other firms that reported and and their net new assets, you would see the relationship that you're expecting. So I would kind of look at that as a proxy for feed-based assets, versus overall firmwide AUA and I'll have Butch out talk about the non-com.
Butch Oorlog: Yeah. So with respect to the non-comp expenses, you know, technology and our continued investment in our leading technology in support of financial advisors just continues to be an area of emphasis. So, you know, as we continue to manage those non-comp expense levels, we're gonna continue to invest in that technology. It's part of our unique culture and our unique value proposition at Raymond James. And so we have to balance, you know, continued growth in that expense against continuing to achieve that key objective. So, yep, the majority of that increase year-over-year is for technology.
Butch Oorlog: Yeah. So with respect to the non-comp expenses, you know, technology and our continued investment in our leading technology in support of financial advisors just continues to be an area of emphasis. So, you know, as we continue to manage those non-comp expense levels, we're gonna continue to invest in that technology. It's part of our unique culture and our unique value proposition at Raymond James. And so we have to balance, you know, continued growth in that expense against continuing to achieve that key objective. So, yep, the majority of that increase year-over-year is for technology.
Trajectory.
You can continue to hold the line and bend the cost curve on non-coms, and I'll just mention the other 1 now. Um, the nna growth is impressive, the AUM growth, admittedly, um, lagged, our expectations, given strong organic flows and Market appreciation. And was hoping you could speak to why that better nna flow rate didn't necessarily translate into as strong AUM conversion which I know can happen from time to time.
And I'll just mentioned the other one now and then.
Growth was impressive.
AUM growth admittedly.
Lagged our expectations given strong organic flows and market appreciation and was hoping you could speak to why that better M&A flow rates didn't necessarily translate into a strong AUM conversion, which I know it can happen from time to time.
Yes, let me take the last part of the question first and then ill just touch on your first part of the question.
Butch Oorlog: You know, as a growth company, we still have other expense elements that vary directly with our successful growth, both in terms of M&A, you know, we've mentioned the recruiting expenses and the incremental expenses that come with successful M&A. But we also, as we grow our balance sheet, and we also have a growth expenses that come with the growth in the balance sheet. So as we think about the objective, we remain committed to creating, increasing, and improving our operating leverage over time. We believe we continue to have the scale to do that, and so we're focused on our operating margin and continuing to pursue opportunities to grow that operating margin over the long term.
You know, as a growth company, we still have other expense elements that vary directly with our successful growth, both in terms of M&A, you know, we've mentioned the recruiting expenses and the incremental expenses that come with successful M&A. But we also, as we grow our balance sheet, and we also have a growth expenses that come with the growth in the balance sheet. So as we think about the objective, we remain committed to creating, increasing, and improving our operating leverage over time. We believe we continue to have the scale to do that, and so we're focused on our operating margin and continuing to pursue opportunities to grow that operating margin over the long term.
On the cost curve.
It is a good question around AUR, because comparing our overall AUR and flows to some of the others have reported.
Yeah, I'll let me take the last part of the question first. And then I'll have Butch touch on, uh, your first part of the question, um, on the cost curve. But, uh, it is a good question around AUA because I was comparing our overall AUA and flows to some of the others that were reported. And, and I think really where you see that, uh, relationship makes sense as if you look at our fee based assets, uh, and the fee based assets were up 19%, which if you compared to the other firms that reported and and their net new assets, you would see the relationship that you're expecting. So I would kind of look at that as a proxy for feed based assets versus overall, firmwide AUA, and I'll have Butch out to talk about the non-comp trajectory
And I think really where you see that.
Yeah. So
Relationship makes sense is if you look at our fee based assets and the fee based assets were up 19%, which if you compare to the other firms have reported net new assets you would see the relationship that youre expecting so I would kind of look at that as a proxy for fee based assets versus overall firm wide.
And I'll, let Jeff.
Talk about the non comp trajectory.
Yes, so with respect to non comp expenses technology, and our continued investment in our part.
Leading technology and support our financial advisers, just continues to be an area of emphasis.
Technology. And you know as a growth company we we still have other expense elements that that very uh, directly with our our successful growth. Both in terms of nna, uh, you know, uh, we mentioned the recruiting expenses and the incremental expenses that come with successful nna. Uh, but we also, as we grow our balance sheet, um, and, and, uh, we also have a growth expenses, uh, that that come with, the, the growth and the balance sheet. So, as we think about the objective, we remain committed to uh, creating uh uh uh, increasing and improving our operating. Leverage over time. We believe we have the the the the the continued to to have the scale to to do that. And so we're focused on our operating margin and continuing uh to pursue opportunities to grow that operating margin over the long term.
Steven Chubak: Okay. It's a great color, and thanks for accommodating the additional question.
Steven Chubak: Okay. It's a great color, and thanks for accommodating the additional question.
No.
As we continue to manage those non comp expense level, we're going to continue to invest in that technology.
That's a great color. And, uh, thanks for accommodating the additional question.
Paul Shoukry: ...Our pleasure.
Paul Shoukry: ...Our pleasure.
Operator: We will take the next question today from Alex Blostein from Goldman Sachs.
Operator: We will take the next question today from Alex Blostein from Goldman Sachs.
Our pleasure.
It sort of makes up part of our unique culture.
Unique value proposition and Raymond James in and so we have to balance.
We will take the next question today from Alex Blasting from Goldman Sachs.
[Analyst] (Goldman Sachs): Good evening, guys. This is Michael on for Alex. Maybe back to the non-comp growth that you guys are laying out for 2026. So, you mentioned this year will include further investments in tech, and supportive recruiting efforts as well. Can you maybe elaborate on what specifically is going into that growth this year? I'll stop there.
[Analyst] (Goldman Sachs): Good evening, guys. This is Michael on for Alex. Maybe back to the non-comp growth that you guys are laying out for 2026. So, you mentioned this year will include further investments in tech, and supportive recruiting efforts as well. Can you maybe elaborate on what specifically is going into that growth this year? I'll stop there.
<unk> growth in that expense against continuing to achieve that.
With respect to the non-toxic expenses, you know, technology and our our continued investment and and our our leading technology and support of financial advisors, just continues to be an area of emphasis. So, you know, as as we continue to to manage those non-comp expense levels. We're going to continue to invest in this technology. It's uh, it's part of makes us. It's part of our unique culture and our our our, our unique value proposition at Raymond James. And and so we have to balance, you know, continue growth in that expense, uh, against continuing to achieve that, that, uh, that key objective. So uh, you know, the majority of that increase, uh, year-over-year is is, is for technology. And, you know, as a growth company we we still have other expense elements that that very uh directly with our our successful growth. So both in terms of nna uh, you know uh We've mentioned the recruiting expenses and the incremental expenses that come with successful nna. Uh, but we also
The objective so the majority of that increase year over year is protected.
For technology.
Growth company.
Still have other expense element that.
Good evening, guys. This is Michael on for Alex. Um, maybe back to the non-comp growth that you guys are laying out for '26. So you mentioned this year will include further investments in tech, uh, and support as well. Can you maybe elaborate on what specifically is going into that growth this year? Um, I'll stop there.
Paul Shoukry: I mean, if you look just at our investment in cybersecurity, or the growth of AI investments and the development that we're doing with applications across all of our businesses, the infrastructure investment, there's a lot that goes into it. That's why I was saying earlier, it's just harder and harder for smaller firms to remain independent and competitive without being able to invest a billion dollars a year in technology. We recruited advisors from another great firm culturally, and they came over, and six months later, they said, "You know, we didn't realize it until we made the move over, but we were basically on DOS prompt at our prior firm," you know, and they're just not able to necessarily keep up with the technology.
Paul Shoukry: I mean, if you look just at our investment in cybersecurity, or the growth of AI investments and the development that we're doing with applications across all of our businesses, the infrastructure investment, there's a lot that goes into it. That's why I was saying earlier, it's just harder and harder for smaller firms to remain independent and competitive without being able to invest a billion dollars a year in technology. We recruited advisors from another great firm culturally, and they came over, and six months later, they said, "You know, we didn't realize it until we made the move over, but we were basically on DOS prompt at our prior firm," you know, and they're just not able to necessarily keep up with the technology.
That very directly with our successful growth both in terms of M&A.
We mentioned about recruiting expenses and incremental.
With successful M&A.
But we also as we grow our balance sheet.
As we grow our balance sheet. Um, and, and, uh, we also have a growth expenses, um, that that come with, the, the growth and the balance sheet. So, as we think about the objective, we remain committed to uh, creating uh uh, increasing and improving our operating. Leverage over time. We believe we have the the the the continued to to have the scale to to do that. And so we're focused on our operating margin and continuing uh to pursue opportunities to grow that operation.
And we also have growth expenses.
Margin over the long term.
That come with the growth in the balance sheet. So do we think about the objective we remain committed to creating.
Because a great color and uh, thanks for accommodating. The additional questions.
Our pleasure.
Creasing and improving our operating leverage over time, we believe we have.
We will take the next question today from Alex blasting from Goldman Sachs.
Continue to have the scale to do that and so we're focused on our operating margin that continuing.
Two opportunities to grow that operating margin over the long term.
Good evening, guys. This is Michael on for Alex. Um maybe back to the non-com growth, uh, that you guys are laying out for 26. So,
Here will include.
Okay, great color and thanks for accommodating the additional question.
Paul Shoukry: It's nothing inherently wrong with the other firm; it's just you have to have scale and critical mass to make those investments. And so, as Butch said, we're gonna continue focusing on technology. I do think long term, especially with AI, we will find more efficiencies in the cost structure, as we deploy AI and automation. We're not gonna dimension that or even put a time table on that now because it's still early innings, but we're starting to see some great benefits already. I mean, we just launched Rai. We had a press release that came out, Rai, R-A-I, short for kind of Raymond James, a play on that.
It's nothing inherently wrong with the other firm; it's just you have to have scale and critical mass to make those investments. And so, as Butch said, we're gonna continue focusing on technology. I do think long term, especially with AI, we will find more efficiencies in the cost structure, as we deploy AI and automation. We're not gonna dimension that or even put a time table on that now because it's still early innings, but we're starting to see some great benefits already. I mean, we just launched Rai. We had a press release that came out, Rai, R-A-I, short for kind of Raymond James, a play on that.
Our pleasure.
Further investments in Tech uh and supportive efforts as well. Can you maybe elaborate on what specifically is going into that growth this year? Um, I'll stop there.
We will take the next question today from Alex <unk> from Goldman Sachs.
Good evening guys. This is Michael on for Alex maybe back to the non comp growth.
Yeah. I mean, if you look just at our investment in uh, cyber security or the growth of AI Investments and the the the development that we're doing with applications, uh, across all of our businesses, the infrastructure investment. Uh, there's a lot that goes into it and that's why I was saying earlier, it's just harder and harder for smaller, firms to remain independent and competitive without being able to invest a billion dollars a year in technology. Uh, we we recruited advisors from another great firm culturally. Uh, and they came over and 6 months later, they said, you know, we didn't realize it until we made the move over, but we were basically on DOS prompt at our prior firm, you know, and uh, they just not able to necessarily keep up with the technology. Uh, and it's not it's nothing inherently wrong with the other firm. It's just, you have to have scale and critical mass to make those Investments. And so, uh, as Butch said, we're going to continue focusing on technology, I do think long.
Sorry laid out for 'twenty. So you mentioned this year will include further investments in tech and <unk>.
Part of recruiting efforts as well can you maybe elaborate on what specifically is going into that group this year.
And I'll stop there.
Yes, I mean, if you look just at our investment in cyber security.
The growth of AI investments.
Paul Shoukry: But it's a natural language sort of Q&A model, if you will, that uses generative AI to answer questions for advisors and their sales assistants and their teams. That way, they don't even have to call in. And that's gonna create efficiencies for them. That's gonna allow our service people to spend their time on higher value problems, solutions, and opportunities. So again, we're not even in the first inning of those opportunities going forward, but it's important that we have the critical mass and the expertise to make the investments to take advantage of those opportunities over the medium term and long term.
But it's a natural language sort of Q&A model, if you will, that uses generative AI to answer questions for advisors and their sales assistants and their teams. That way, they don't even have to call in. And that's gonna create efficiencies for them. That's gonna allow our service people to spend their time on higher value problems, solutions, and opportunities. So again, we're not even in the first inning of those opportunities going forward, but it's important that we have the critical mass and the expertise to make the investments to take advantage of those opportunities over the medium term and long term.
Long term especially with, uh, AI. We will find more efficiencies in the cost structure as we deploy, Ai and automation. Uh, we're not going to Dimension that or even put a time, uh, table on that now because it's still early Innings, uh, but we're we're starting to see some great uh, benefits already. I mean we just launched Ray we had a press release that came out. Ray R AI uh short for kind of Raymond James, a play on that. Uh but it's a
The development that we're doing with applications.
Across all of our businesses the infrastructure investment.
A lot that goes into it and that's why I was saying earlier, just harder and harder for smaller firms to remain independent as you competitive without being able to invest $1 billion a year in technology.
Yeah. I mean, if you look just at our investment in uh, cyber security or the growth of AI investments in the the the developments that we're doing with applications uh, across all of our businesses, the infrastructure investment. Uh, there's a lot that goes into it and that's why I was saying earlier, it's just harder and harder for smaller firms to remain independent in competitive without being able to invest a billion dollars a year in technology. Uh, we we recruited advisors from another great firm, culturally. Uh, and they came over 6 months later, they said, you know, we didn't realize it until we made the move over, but we were basically on dots prompt at our prior firm, you know, and uh, they just not able to necessarily keep up with the technology to uh and it's not it's nothing inherently wrong with the
Recruited advisors from another great firm culturally.
Came over six months later he said.
Didn't realize until we made the move over we were basically on trough detriment prior firm.
Phone was just so you have to have scale and critical mass to make those Investments. And so uh it's Butch said we're going to continue focusing on technology. I do think long-term especially with uh, AI we will find more efficiencies in the cost structure as we deploy.
They are just not able to necessarily keep up with the technology.
A natural language, uh, sort of Q&A model, if you will, that, uh, uses generative AI that, uh, to answer questions for advisors, uh, and, uh, their sales assistants and their teams. Uh, that way they don't even have to call in. And, uh, that's going to create efficiencies for them. That's going to allow our service people to spend their time on higher value problems and, uh, solutions and opportunities. So again, we're not even in the first inning of those opportunities going forward, but it's important that we have the critical mass and the expertise to make the investments to, uh, take advantage of those opportunities over the medium term and long term.
[Analyst] (Goldman Sachs): That's helpful. Thanks. Maybe one modeling question. On when you guys originally increased the kind of cadence of the share repurchases, I think the original range was $400 to 500 million a quarter. It seems the past couple of quarters has been closer to, like, $350 to 400 range, including the target for the fiscal second. Can you kind of walk through the rationale? Is that because you guys are allocating capital to other things? Is the target going to remain $400 to 500, or is $400 a better run rate for the rest of the year?
[Analyst] (Goldman Sachs): That's helpful. Thanks. Maybe one modeling question. On when you guys originally increased the kind of cadence of the share repurchases, I think the original range was $400 to 500 million a quarter. It seems the past couple of quarters has been closer to, like, $350 to 400 range, including the target for the fiscal second. Can you kind of walk through the rationale? Is that because you guys are allocating capital to other things? Is the target going to remain $400 to 500, or is $400 a better run rate for the rest of the year?
And it's not it's nothing inherently wrong with the other fun, but just you have to have scale and critical mass to make those investments and so.
an automation, uh, we're not going to Dimension that or even put a time, uh, table on that now, because it's still early Innings, uh, but we're, we're starting to see some great, uh,
As Brook said, we're going to continue focusing on technology I do think long term, especially with AI, we will find more efficiencies in the cost structure as we deploy AI and automation, we're not going to dimension that or you can put a time table on that now because it's still early innings, but we're.
We're starting to see some great.
That's helpful, thanks. Uh, maybe one modeling question—on when you guys originally increased the kind of cadence of the share repurchases, I think the original range was $400 to $500 million a quarter. It seems the past couple of quarters has been closer to, like, the $350 to $400 million range, including the target for the fiscal second. Can you kind of walk through the rationale? Is that because you guys are allocating capital to other things? Is the target going to remain $400 to $500 million, or is $400 million a better run rate for the rest of the year?
Butch Oorlog: Yeah, so, as you noted, we did repurchase $400 million in this most recent quarter, which was within the guidelines, the guidance that we had provided. And we have indicated an expectation that we'll repurchase at the $400 million levels, what we're targeting, for this current quarter. And keep in mind that, you know, we just had other capital deployment action this quarter, where we redeemed $80 million of preferred equity. You know, that has the same effect on Tier 1 capital as a share repurchase. Doesn't have the same, you know, EPS effect as a share repurchase.
Butch Oorlog: Yeah, so, as you noted, we did repurchase $400 million in this most recent quarter, which was within the guidelines, the guidance that we had provided. And we have indicated an expectation that we'll repurchase at the $400 million levels, what we're targeting, for this current quarter. And keep in mind that, you know, we just had other capital deployment action this quarter, where we redeemed $80 million of preferred equity. You know, that has the same effect on Tier 1 capital as a share repurchase. Doesn't have the same, you know, EPS effect as a share repurchase.
Benefits already I mean, we just launched right we had a press release that came out right.
Sure Raymond James a play on that but it's.
Our natural language.
Sort of Q&A model, if you will that uses generative AI.
To answer your questions for advisors.
Their sales and their teams that.
Generative AI that, uh, to answer questions for advisors, uh, and, uh, their sales assistants and their teams. Uh, that way they don't even have to call in. And, uh, that's going to create efficiencies for them. That's going to allow our service, people to spend their time on higher value problems and uh, Solutions and opportunities. So again, we're not even in the first inning of those opportunities going forward, but it's important that we have the critical mass and the expertise to make the Investments to uh take advantage of those opportunities over the medium term and long term.
That way they don't even have to call in and that's going to create efficiencies for them that's going to allow our service people to spend their time on higher value problems and solutions and opportunities. So again, we're not even in the first inning those opportunities going forward, but it's important that we have the critical mass and the expertise to make the investments to.
Butch Oorlog: I would say we're deploying in capital actions this quarter, you know, targeting $480 million of activity. And going forward, you know, we remain committed to that $400 to $500 quarterly level, going forward as we continue to monitor our Tier 1 leverage ratio until such time that, you know, we've deployed it in our other priorities.
I would say we're deploying in capital actions this quarter, you know, targeting $480 million of activity. And going forward, you know, we remain committed to that $400 to $500 quarterly level, going forward as we continue to monitor our Tier 1 leverage ratio until such time that, you know, we've deployed it in our other priorities.
Take advantage of those opportunities over the medium term and long term.
That's helpful. Thanks, maybe one modeling question.
That's helpful. Thanks. Uh, maybe 1 modeling question, um, on when you guys originally increased the kind of cadence of the share repurchases, I think the original range was 4 to 500 million a quarter. It seems the past couple of quarters has been closer to, like 350 to 400 range including the target for, uh, the fiscal second. Can you kind of walk through the rationale is that because you you guys are allocating Capital to other things. Uh, is is a target going to remain 4 to 5 or is 400 a better run rate for the rest of the year.
When you guys originally increased the kind of the cadence of the share repurchases I think the original range was $4 to $500 million a quarter. It seems the past couple of quarters, it's been closer to like $3 50 to 400 range, including the target for the fiscal second can you kind of walk through the rationale is that because you guys are allocating capital to other things.
Order, you know targeting 480 million dollars of of activity and and going forward, you know, we remain uh uh uh committed to that, 4 to 500, uh, quarterly level uh going forward, as we continue to monitor our Tier 1, leverage ratio until such time um, that uh, you know, we deployed it in in, in our other priorities.
[Analyst] (Goldman Sachs): Great. Thank you.
[Analyst] (Goldman Sachs): Great. Thank you.
Great. Thank you.
Operator: The next question will come from Jim Mitchell, Seaport Global Securities.
Operator: The next question will come from Jim Mitchell, Seaport Global Securities.
As a target going to remain four to five or 400, a better run rate for the rest of the year.
The next question will come from Jim Mitchell, Seaport Global Securities.
Jim Mitchell: Hey, good afternoon. Just on the deposit mix, you had ESP balances down $1 billion quarter over quarter, another $500 million so far. Is that just demand driven, or are you actively looking to shrink those deposits? And just trying to think through the trajectory of that, those balances and the mix going forward.
Jim Mitchell: Hey, good afternoon. Just on the deposit mix, you had ESP balances down $1 billion quarter over quarter, another $500 million so far. Is that just demand driven, or are you actively looking to shrink those deposits? And just trying to think through the trajectory of that, those balances and the mix going forward.
Yeah. Uh so uh, as as you noted uh, we did repurchase 400 million uh, in this this most recent quarter which which was uh within the guidelines, the guidance that we had provided. Um, and and we we have indicated, uh, an expectation that we'll we'll repurchase at the 400 million dollar level is what we're targeting, uh, for this, this current border.
Yes.
Hey, good afternoon. Um,
<unk>.
As you noted.
<unk> repurchased 400 million.
In this most recent quarter, which which was within the guidelines of the guidance that we've provided.
We have indicated.
Keep in mind that if we we just uh add other Capital deployment action, this border where we redeemed 80 800 million dollars of of preferred Equity, you know, that that has the same effects on tier 1 Capital as a share repurchase doesn't have the same, you know, EPS effect as a share repurchase. So so
Spectation that will for repurchase at the $400 million levels, what we're targeting.
Just uh, just on the deposit mix, you had ESP, balances down a billion dollars quarter over quarter, another 500 million so far. Is that just demand driven or are you actively looking to to shrink those deposits and and just trying to think through uh the trajectory of the of that those balances in the mix going forward.
Paul Shoukry: No, Jim, it really was demand driven because it's kind of just had 100% deposit beta, so we haven't been, you know, accelerating that to change the demand. I think the... And if you look at the outflows, the outflows have been pretty consistent. It's really the inflows that have decelerated as rates have started coming in, and I think more, more clients or funds are getting invested into the markets. So, I think that's consistent with what you've seen with other firms and their higher yielding savings products. It's just as rates are coming in, as you would expect, the demand for placing cash there is declining.
Paul Shoukry: No, Jim, it really was demand driven because it's kind of just had 100% deposit beta, so we haven't been, you know, accelerating that to change the demand. I think the... And if you look at the outflows, the outflows have been pretty consistent. It's really the inflows that have decelerated as rates have started coming in, and I think more, more clients or funds are getting invested into the markets. So, I think that's consistent with what you've seen with other firms and their higher yielding savings products. It's just as rates are coming in, as you would expect, the demand for placing cash there is declining.
This quarter keep in mind that.
Just kind of other capital deployment action this quarter, where we redeemed $88 million.
<unk> equity that has the same effect on tier one capital share repurchase doesn't have to say ETF the effect of the share repurchase.
I would say, we're we're deploying and capital actions. This this quarter, you know targeting 480 million dollars of of activity and and going forward, you know we remain um uh uh committed to that, 4 to 500. Uh, quarterly level uh going forward, as we continue to monitor our Tier 1, leverage ratio until such time um that uh, you know, we've deployed it in in, in our other priorities.
I would say.
Deploy the capital actions this.
Great. Thank you.
This quarter targeting $480 million.
Activity in April and forward we remain.
The next question will come from Jim Mitchell. C Port goal security.
Committed to that four to 500.
Hey, good afternoon. Um,
No Jim. It really was a demand driven because it kind of just had a 100% deposit beta. So we haven't been, uh, you know, accelerating that to change the demand. I think the, and if you look at the outflows, outflows have been pretty consistent. It's really the inflows that have decelerated as rates have started coming in, uh, and I think more, uh, more Appliance or funds are getting invested into the markets. So um, I think that's consistent with, uh, what you've seen with other firms and their higher yielding savings products is just as
Quarterly level going forward as we continue to monitor our tier one leverage ratio until such time.
Jim Mitchell: Right. Okay, that's fair. So when we kind of put it all together with kind of the thoughts on mix from here, deposit mix from here, the forward curve and your pretty significant loan growth that's picking up with lower rates, how do you think about the combination of NII and RJBDP fees, as we go forward for the rest of the year?
Jim Mitchell: Right. Okay, that's fair. So when we kind of put it all together with kind of the thoughts on mix from here, deposit mix from here, the forward curve and your pretty significant loan growth that's picking up with lower rates, how do you think about the combination of NII and RJBDP fees, as we go forward for the rest of the year?
Rates are coming in as you would expect. The demand for placing cash is declining.
That yes.
We've deployed it.
Our other priorities.
Great. Thank you.
The next question will come from Jim Mitchell Seaport Global Securities.
Just uh, just on the deposit mix, you had ESP, balances down a billion dollars quarter of a quarter. Another 500 million so far. Is that just demand driven or are you actively looking to to shrink those deposits and and just trying to think through uh the trajectory of the of that those balances in the mix going forward.
Hey, good afternoon.
Just.
Just on the deposit mix, you had ESP balances down a $1 billion quarter over quarter. Another $500 million. So far is that just demand driven are you actively looking to to shrink those deposits.
Right? Okay, that's fair. And so when we kind of put it all together with kind of the thoughts on mix from here, or deposit, mix from here, um, the forward curve and you're pretty significant loan growth that's picking up a lower rates. How do you think about the combination of knee and rjd RJ bdp fees? Uh, as we go forward for the rest of the year?
Paul Shoukry: ... Yeah, I mean, I would say it, it really kind of depends on the rate trajectory from here. So anywhere, the market's pricing in anywhere from 0 to 2 rate cuts. The lower, the lower the rates, I mean, we have pretty good deposit beta on the balances that we have, which provides resiliency on both the NIM and the BDP yield. But in terms of the balances in ESP, I still think clients are price sensitive to what they're earning on their cash balances. You know, even if rates were to be cut a couple more times, it's just the real difficult question to answer is, to what extent does that sensitivity, you know, decrease as rates go down?
Paul Shoukry: ... Yeah, I mean, I would say it, it really kind of depends on the rate trajectory from here. So anywhere, the market's pricing in anywhere from 0 to 2 rate cuts. The lower, the lower the rates, I mean, we have pretty good deposit beta on the balances that we have, which provides resiliency on both the NIM and the BDP yield. But in terms of the balances in ESP, I still think clients are price sensitive to what they're earning on their cash balances. You know, even if rates were to be cut a couple more times, it's just the real difficult question to answer is, to what extent does that sensitivity, you know, decrease as rates go down?
Trying to think through.
Trajectory of that.
Those balances in the mix going forward.
Hello Jim. It really was the band driven because it's kind of just had a 100% deposit beta. So we haven't been, uh, you know, accelerating that to change the demand. I think the, and if you look at the outflows, outflows have been pretty consistent. It's really the inflows that have decelerated as rates have started coming in. Uh, and I think more more Appliance or funds are getting invested into the markets. So
No really one demand driven because it's kind of just had a 100% deposit beta so we haven't been.
Accelerating that to change the demand I think.
And if you look at the outflows the outflows have been pretty consistent thats really the inflows that have decelerated as rates have started coming in.
Um, I think that's consistent with uh what you've seen with other firms and their higher yielding savings products is just a rates are coming in as you would expect that the demand, uh, for placing cash, there is declining.
I think more and more clients are funds.
Funds are getting invested into the markets. So I.
Paul Shoukry: We, you know, we really don't know the answer to that, but we would be guessing, but that's what we would have to monitor going forward.
We, you know, we really don't know the answer to that, but we would be guessing, but that's what we would have to monitor going forward.
I think thats consistent with.
What you've seen with other firms in their higher yielding savings products is just as rates are coming in as you would expect the demand for.
Yeah, I mean I would say it's it's a really kind of depends on the rate trajectory from here, uh, so anywhere the Market's pricing in anywhere from 0 to 2 rate Cuts, uh, the lower the lower, the rates. I mean, we have pretty good deposit beta on the balances that we have, uh, which provides resiliency on both the Nim and the bdp yield. Um, but, uh, in terms of the balances in ESP, I I still think clients uh are uh price sensitive to what they're earning on their cash. Balance is uh you know even if rates were to be cut a couple more times it's just the real difficult question to answer is to what extent does that sensitivity. Uh you know decrease as rates go down and we you know we really don't know the answer to that that we would be guessing but that's what we would have to monitor going forward.
Operator: Okay, fair enough. Thanks. And our next question comes from Michael Cyprys, Morgan Stanley.
Operator: Okay, fair enough. Thanks. And our next question comes from Michael Cyprys, Morgan Stanley.
Okay, fair enough. Thanks.
Right? Okay, that's fair. And so when we kind of put it all together with kind of the thoughts on mix from here, or deposit, mix from here, um, the forward curve and you're pretty significant loan growth that's picking up at lower rates. So, how do you think about the combination of knee and rjd RJ bdp fees? Uh, as we go forward for the rest of the year?
For placing cash there is declining.
Alright, Okay, that's fair and so when we kind of put it all together with kind of the thoughts on mix from here deposit mix from here.
And our next question comes from Michael Cyprus, Morgan Stanley.
Michael Cyprys: Great. Thanks for taking the question. I just wanted to ask about the alts platform that you've been investing across. I was hoping you could elaborate on how you've been expanding that platform, where that stands today relative to where you'd like that to be, and what steps can we expect from Raymond James over the next 12 to 24 months with respect to the alts platform?
Michael Cyprys: Great. Thanks for taking the question. I just wanted to ask about the alts platform that you've been investing across. I was hoping you could elaborate on how you've been expanding that platform, where that stands today relative to where you'd like that to be, and what steps can we expect from Raymond James over the next 12 to 24 months with respect to the alts platform?
The forward curve and Youre pretty significant loan growth.
Up at lower rates, how do you think about the combination of NII in R. J D. P. R J PDP fees.
Yeah. I mean I would say it's a really kind of depends on the rate trajectory from here, uh, so anywhere the Market's pricing in anywhere from 0 to 2 rate Cuts, uh the lower the lower, the rates. I mean, we have pretty good deposit data on the balances that we have.
As we go forward to the rest of the year.
Great, thanks for taking the question. I just wanted to ask about the alts platform that you've been, um, investing across. So if you could elaborate on how you've been expanding that platform, where that stands today relative to where you'd like that to be, and what steps we can expect from Raymond James over the next 12 to 24 months with respect to the alts platform.
Paul Shoukry: Yeah, I mean, with our alts platform, we have a very similar approach that I described with growing the number of advisors that we have, and it's a approach of quality over quantity. You know, we don't wanna have every product under the sun, you know, just because it might make a headline or a news story, then there might be some interest that comes in. We've got to make sure, one, there's critical mass of interest and demand, but most importantly, that the product is well diligenced from both an operational and an investment perspective, and well supported on an ongoing basis, which requires ongoing servicing. And that really, to do it well, we really wanna make sure that there's critical mass in the products that we do offer. So, we're being deliberate on it.
Paul Shoukry: Yeah, I mean, with our alts platform, we have a very similar approach that I described with growing the number of advisors that we have, and it's a approach of quality over quantity. You know, we don't wanna have every product under the sun, you know, just because it might make a headline or a news story, then there might be some interest that comes in. We've got to make sure, one, there's critical mass of interest and demand, but most importantly, that the product is well diligenced from both an operational and an investment perspective, and well supported on an ongoing basis, which requires ongoing servicing. And that really, to do it well, we really wanna make sure that there's critical mass in the products that we do offer. So, we're being deliberate on it.
Yes, I mean, I would say, it's a really kind of depends on the right trajectory from here so anywhere the market's pricing at anywhere from zero to two rate cuts at the lower lowered the rates I mean, we have a pretty good deposit beta on the balances that we have.
Which provides resiliency on both the Nim and the bdp yield. Um, but uh, in terms of the balances in ESP, I I still think clients uh are uh price sensitive to what they're earning on their cash. Balance is uh you know even if rates were to be cut a couple more times, it's just the real difficult question to answer is to what extent does that sensitivity. Uh, you know, decrease as rates go down and we
Which provides resiliency on both NIM and the PDP yields.
You know, we really don't know the answer to that but we would be guessing, but that's what we would have to monitor going forward.
Got it.
In terms of the balances and ESP I still think clients.
Okay, fair enough. Thanks.
Are price sensitive to what the earning on the cash balances.
And our next question comes from Michael Cyprus, Morgan Stanley.
Even if rates were to become a couple more times is just the real difficult question to answer as to what extent does that sensitivity.
Decrease as rates go down.
We really don't know the answer to that we would be guessing, but thats, what we would have to monitor going forward.
Paul Shoukry: We invest a lot in education. You know, we're not... We've seen other firms in the industry use alternative investments as sort of a tool to make it harder for advisors to leave from one firm to the other because they kind of create friction when advisors want to move and/or as a profit driver. That's not how we look at any product. First of all, all advisors are free agents, and if they want to leave on good standing, we'll help them move to another firm, and we don't want to try to sell any products to them that makes that harder for them and their clients. Secondly, I think it's problematic long term when you start looking at products as profit drivers versus what's most importantly good for clients long term.
We invest a lot in education. You know, we're not... We've seen other firms in the industry use alternative investments as sort of a tool to make it harder for advisors to leave from one firm to the other because they kind of create friction when advisors want to move and/or as a profit driver. That's not how we look at any product. First of all, all advisors are free agents, and if they want to leave on good standing, we'll help them move to another firm, and we don't want to try to sell any products to them that makes that harder for them and their clients. Secondly, I think it's problematic long term when you start looking at products as profit drivers versus what's most importantly good for clients long term.
Okay fair enough. Thanks.
Alts platform that you've been um, investing across. So if you could elaborate on how you've been expanding that platform or that stands today relative to where you'd like that to be, and what steps can we expect? Uh, from Raymond James over the next 12, 24 months with respect to the old platform,
And our next question comes from Michael Cyprus with Morgan Stanley.
Great. Thanks for taking the question I just wanted to ask you about the ops platform that you've been in.
Yeah. I mean the with our alt platform we kind of we have a very similar approach that I described with growing the number of advisors that we have. And it's it's a approach of quality over quantity, you know. We don't want to have every product Under the Sun, uh, you know, just because it might make uh, a headline or a news story. Then there might be some interest that comes in. We've got to make sure 1 there's critical mass of interest and demand. Uh, but most importantly that the product is, well, diligent from both an operational and an investment perspective and well, supported on an ongoing basis, which requires ongoing servicing. Uh, and that really to do it. Well, we really want to make sure that there's critical mass in the products that we do offer. So uh, we're being delivered on it. Uh, we we invest a lot in education, you know? We're not, uh, we've seen other firms in the industry. Use alternative Investments as sort of a, a tool to make it harder for advice.
<unk> you could elaborate on how <unk> been expanding that platform, where that stands today relative to where you'd like that to be.
Yeah. I mean with our all platform we kind we have a very similar approach that I described with growing the number of advisors that we have and it's it's a approach of quality over quantity.
you know, we don't want to have
What steps can we expect from Raymond James over the next 12 to 24 months with respect to the <unk> platform.
Yes.
With our platform.
Have a very similar approach I described with growing the number of advisors that we have.
Paul Shoukry: And so we invest a lot in education and making sure advisors help their clients understand the liquidity impact of investing in private equity and what portion, what is the appropriate amount of allocation of private equity, given the individual client's liquidity needs. So it's, which is different amongst every client, which is why it's so important for the advisor to understand their client's risk tolerance or liquidity needs, where they are in their investment process. And so we have a balanced approach when it comes to offering any product, but particularly private equity, because it is, on a relative basis, less liquid than the more traditional investments, and it becomes even less liquid when you need the cash, typically, if you look at history.
<unk> approach of quality over quantity, we don't want to have every product under the science.
And so we invest a lot in education and making sure advisors help their clients understand the liquidity impact of investing in private equity and what portion, what is the appropriate amount of allocation of private equity, given the individual client's liquidity needs. So it's, which is different amongst every client, which is why it's so important for the advisor to understand their client's risk tolerance or liquidity needs, where they are in their investment process. And so we have a balanced approach when it comes to offering any product, but particularly private equity, because it is, on a relative basis, less liquid than the more traditional investments, and it becomes even less liquid when you need the cash, typically, if you look at history.
Just because it might make.
Headline or a new stories and so there might be some interest that comes in you've got to make sure. One there's a critical mass of interest and demand.
But most importantly about the product as well diligence from both an operational and investment perspective.
Ongoing basis was required ongoing servicing.
And that really to do it well, we really want to make sure that theres critical mass in the products that we do offer so we're being deliberate on it.
Every product Under the Sun, uh, you know, just because it might make, uh, a headline or a news story. Then there might be some interest that comes in. We've got to make sure 1 there's critical mass of interest and demand. Uh, but most importantly that the product is, well, diligent from both an operational and an investment perspective and well, supported on an ongoing basis, which requires ongoing servicing. Uh, and that really to do it. Well, we really want to make sure that there's critical mass in the products that we do offer. So, uh, we're being delivered on it. We we invest a lot in education, you know? We're not, uh, we've seen other firms in the industry. Use alternative Investments as sort of a, a tool to make it harder for advisors to leave from 1 firm to the other. Because they kind of create frictions uh, when the advisors want to move or, and, or as a profit driver, that's not how we look at any products. Uh,
We invest a lot in education.
<unk>.
We've seen other firms in the industry using alternative investments as sort of.
Paul Shoukry: So we just want to have a balanced approach and a long-term approach there.
So we just want to have a balanced approach and a long-term approach there.
A tool to make it harder for advisers to leave from one firm to the other because they kind of create friction when advisors want to move for <unk>.
Education and making sure our advisors help their clients understand, uh, the liquidity impact of investing in private equity and what portion, what what is the appropriate amount of allocation of private Equity given the individual clients liquidity needs. So it's, which is different amongst every clients which is why it's so important for the advisor to understand their client's risk tolerance or liquidity needs where they are in their investment process. Uh, and so we're we have a balanced approach when it comes to offering any product. Uh but particularly private Equity because it is on a relative basis, less less liquid than uh the more traditional Investments, uh and it becomes even less liquid when you need the cash. Typically, if you look at history so we just want to have a balanced approach in the long term approach. Their
Michael Cyprys: Great, thanks. And then just a follow-up question on AI. You spoke about automating processes and launching your AI operations agent, Rai. I was hoping you could speak to your aspirations there, how you see this ramping in terms of usage and adoption compared to where that adoption is today for Rai. What sort of ROI do you anticipate? And then just more broadly, where is there scope to launch additional agents and how you're thinking about potential for an agentic workforce at Raymond James?
Michael Cyprys: Great, thanks. And then just a follow-up question on AI. You spoke about automating processes and launching your AI operations agent, Rai. I was hoping you could speak to your aspirations there, how you see this ramping in terms of usage and adoption compared to where that adoption is today for Rai. What sort of ROI do you anticipate? And then just more broadly, where is there scope to launch additional agents and how you're thinking about potential for an agentic workforce at Raymond James?
Profit driver that's not how we look at any product first of all advisors are free agents and they want to leave on good standing we will help them move to another firm and we don't want to try to sell any products to them that makes it harder for them and their clients.
Secondly, I think its problematic long term when you start looking at products as profit drivers versus what's most importantly, good for clients long term.
Great, thanks. And then just a follow-up question on AI. You spoke about automating processes and launching your AI operations agent. Ray, I was hoping you could speak to your aspirations there—how you see this ramping in terms of usage and adoption compared to where that adoption is today for Rey. What sort of ROI do you anticipate? And then just more broadly, where's there scope to want additional agents, and how are you thinking about the potential for an agent-to-workforce at Raymond James?
Paul Shoukry: No, it's a great question. I mean, I spend a lot of time with our technology leadership asking the same thing, and really, we don't know yet. It's early. It's first inning of opportunities here and deployment. We already have over 10,000 associates that are using AI on a regular basis in one way, shape, or form. So the penetration has been pretty significant. I think we've over 3 million lines of code are written a month using AI, you know, with oversight from the technologists in the group. So we are using AI to a pretty significant extent already, but I still think it's early innings. The opportunities to expand that as these tools get smarter and more efficient is significant.
Paul Shoukry: No, it's a great question. I mean, I spend a lot of time with our technology leadership asking the same thing, and really, we don't know yet. It's early. It's first inning of opportunities here and deployment. We already have over 10,000 associates that are using AI on a regular basis in one way, shape, or form. So the penetration has been pretty significant. I think we've over 3 million lines of code are written a month using AI, you know, with oversight from the technologists in the group. So we are using AI to a pretty significant extent already, but I still think it's early innings. The opportunities to expand that as these tools get smarter and more efficient is significant.
We invest a lot in education, and making sure advisors help their clients understand.
The liquidity impact investing in private equity and what proportion.
First of all, all advisors are free agents and, uh, if they want to leave on good standing, we'll help them move to another firm. And we don't want to try to sell any products to them. That makes that harder for them and their clients. Uh, and secondly, I think it's, uh, problematic long term when you start looking at products as profit drivers versus what's most importantly, good for clients long term. Uh, and so we we invest a lot in education and making sure advisors help their clients understand, uh, the liquidity impacts of investing in private equity and what portion, what what is the appropriate amount of allocation to private Equity? Given the individual clients liquidity needs. So it's which is different amongst every client, which is why it's so important for the advisor to understand their client's risk tolerance or liquidity needs where they are and their investment process. Uh, and so we're we have a balanced approach when it comes to offering any product. Uh but particularly private Equity because it is
Is the appropriate amount of allocation of private equity given.
Individual clients liquidity needs, so which is different amongst every clients, which is why it's so important for the advisor to understand their clients' risk tolerance or liquidity needs, where they are in their investment process and so we have a balanced approach when it comes to offering any products, but particularly private equity because.
On a relative basis, less less liquid than uh the more traditional Investments, uh, and it becomes even less liquid when you need the cash. Typically, if you look at history so we just want to have a balanced approach in a long-term approach. Their
It is on a relative basis less liquid than.
The more traditional investments and it becomes even less liquidity when you need the cash typically if you look at the history. So we just want to have a balanced approach and a long term approach there.
No, it's a great question. I mean, I spent a lot of time with our technology leadership asking the same thing and the, you know, really, we don't know yet. It's early. It's, uh, first inning of opportunities here. And, and deployment. We already have over 10,000, uh, Associates that are using AI on a regular basis in 1 way shape, or form. So, the, the, uh, penetration has been pretty significant. I think we over 3 million lines of code are written a month using AI, you know, with oversight, uh, from the technology just uh, in the group. So uh, we are using AI to pretty significant extent already, but I still think it's early Innings and the opportunities to expand that as these tools get smarter and more efficient, uh, as as significant.
Michael Cyprys: Great. Thank you.
Michael Cyprys: Great. Thank you.
Great. Thank you.
Operator: The next question comes from Devin Ryan, from Citizens Bank.
Operator: The next question comes from Devin Ryan, from Citizens Bank.
Great thanks. And then just a follow-up question on AI. You spoke about automating processes and launching your AI operations agent. Ray, I was hoping you could speak to your aspirations their how you see this ramping in terms of usage and adoption compared to where that adoption is today for Ray? What sort of Roi do you anticipate and then just more broadly. Where's their scope to want additional agents and how you're thinking about potential for energetic Workforce at Raymond James
The next question comes from Devin Ryan from Citizens Bank.
Great. Thanks, and then just a follow up question on AI, you spoke about automating processes launching year AI operations Sejant Ray I was hoping you could speak to your aspirations. There how you see this ramping in terms of usage and adoption compared to where that adoption is today for ray what sort of ROI do you anticipate and then just more broadly where is there scope to.
Devin Ryan: Thanks, everyone. I think we're probably covered everything here. Just one maybe to dig in on the securities-based loan growth. I mean, it's just been really off the charts. And so I'm just curious, as we think about kind of the next year here. I get the piece around rates are coming down, and that's helpful. But it seems like there's probably a lot of education going on there. And so love to just get a sense of kind of some of the other drivers, and then just capacity, because that's a really nice area for you guys, and would seem like kind of the remixing element to that is quite positive. So just want to get a sense of, like, how much more room there is to go in terms of penetration of your customers. Thanks.
Devin Ryan: Thanks, everyone. I think we're probably covered everything here. Just one maybe to dig in on the securities-based loan growth. I mean, it's just been really off the charts. And so I'm just curious, as we think about kind of the next year here. I get the piece around rates are coming down, and that's helpful. But it seems like there's probably a lot of education going on there. And so love to just get a sense of kind of some of the other drivers, and then just capacity, because that's a really nice area for you guys, and would seem like kind of the remixing element to that is quite positive. So just want to get a sense of, like, how much more room there is to go in terms of penetration of your customers. Thanks.
No, it's a great question. I mean, I spent a lot of time with our technology leadership asking the same thing and the, you know, really, we don't know yet. It's early. It's, uh, first inning of opportunities here, and, and deployment, we already have over 10,000
Traditional agents and how youre thinking about potential for energetic workforce at Raymond James.
Yes.
No. It's a great question I mean, I spent a lot of time with our technology leadership asking the same thing.
Really we don't know yet it's early it's first inning of opportunities here.
Ah, thanks everyone. I I think we're um, probably covered everything here. Um, just just 1 maybe to dig in on. Um, the Securities based loan, uh, growth. I mean, it's just been really off the charts and so I'm just curious as we think about kind of the the next year here. I get the piece around rates are coming down and that's helpful but um it seems like there's probably a lot of Education going on there and and so love to just get a sense of kind of some of the other drivers um and then just capacity because that's a really nice um area for you guys and would seem like kind of
<unk>, we already have over 10000.
The remixing element of that is quite positive. So, just want to get a sense of how much more room there is to go in terms of penetration of your customers. Thanks.
<unk> that are using AI on a regular basis in one way shape or form so.
Paul Shoukry: Yeah, no, this, as you said, it's been the growth has been phenomenal. Lower rates have certainly helped that growth, but as you point out, education, technology, the tools to the, to tap into the securities-based lending product has been significant as well. And also recruiting has driven growth. We, a lot of the advisors we're recruiting, are coming with substantial SBL balances to their clients. So it's really an all of the above approach. And we're optimistic long term about SBLs continuing to be used by clients because it's a great product for clients relative to other borrowing solutions out there. It's much more flexible, for example, than a home equity loan.
Paul Shoukry: Yeah, no, this, as you said, it's been the growth has been phenomenal. Lower rates have certainly helped that growth, but as you point out, education, technology, the tools to the, to tap into the securities-based lending product has been significant as well. And also recruiting has driven growth. We, a lot of the advisors we're recruiting, are coming with substantial SBL balances to their clients. So it's really an all of the above approach. And we're optimistic long term about SBLs continuing to be used by clients because it's a great product for clients relative to other borrowing solutions out there. It's much more flexible, for example, than a home equity loan.
Associates that are using AI on a regular basis in 1 way shape or form. So the, the uh, penetration has been pretty significant. I think we over 3 million lines of code are written a month using AI, you know, with oversight from the technologists, uh, in the group. So uh, we are using AI to pretty significant extent already, but I still think it's early Innings and the opportunities to expand that. Uh, these tools get smarter and more efficient, uh, as as significant.
<unk>.
Penetration has been pretty significant I think we over 3 million lines of code a written a month using AI with oversight from the technologist.
Great. Thank you.
The next question comes from Devin Ryan from Citizens Bank.
So.
We are using AI to a pretty significant extent already but I still think its early innings and the opportunities to expand that.
Tools get smarter and more efficient.
Significant.
Great. Thank you.
The next question comes from Devin Ryan from citizens.
Thanks, everyone I think we're.
Probably covered.
Just one maybe you could dig in.
Paul Shoukry: And so there's other substitutes out there that are much more mature, that people have much higher awareness of, and as they learn about securities-based loans, there's a lot of clients that are interested in it.
And so there's other substitutes out there that are much more mature, that people have much higher awareness of, and as they learn about securities-based loans, there's a lot of clients that are interested in it.
The securities based loan growth I mean, it's just been really off the charts and so I'm just curious as we think about kind of the next year here I get the piece around rates are coming down and that's helpful. But.
I think we're um probably covered everything here. Um, just just 1 maybe to dig in on. Um, the Securities based loan, uh, growth. I mean, it's just been really off the charts and so I'm just curious as we think about kind of the the next year here. I get the piece around rates are coming down and that's helpful but um it seems like there's probably a lot of Education going on there and and to love to just get a sense of kind of some of the other drivers um and then just capacity because that's a really nice um area for you guys and would seem like kind of the remixing element of that is was quite positive. So just want to get a sense of like how much more room there is to go in terms of penetration of your customers. Thanks.
Yeah. No. This, uh, as you said, it's been the growth has been phenomenal, lower rates of certainly helped that growth. But as you point out, education, uh, technology, the tools to the, uh, to tap into the security space lending, uh, product, uh, has been, uh, significant as well and also recruiting is driven growth. Uh, we a lot of the advisors were recruiting uh, or coming with substantial uh, sbl balances to their clients. So it's really, you know, all of the above approach. Uh, and we're, we're optimistic long term about sbl's continuing to be used by clients because it's, uh, it's a great product for clients relative to other borrowing, uh, Solutions out there. It's much more flexible for example, uh, than a home equity loan. As and so there's there's other substitutes out there that are much more mature that people have much higher, awareness of and as they learn about security space loans, there's a lot of clients that are interested in it.
It seems like there's probably a lot of education going on there and so would love to just get a sense of kind of some of the other drivers and then just capacity because that's a really nice.
Devin Ryan: All right, great. I'll leave it there. Thanks a lot, guys.
Devin Ryan: All right, great. I'll leave it there. Thanks a lot, guys.
All right, great. I'll look at it there. Thanks a lot, guys.
Paul Shoukry: Thanks, Devin.
Paul Shoukry: Thanks, Devin.
Operator: Our final question today comes from Dan Fannon, from Jefferies.
Operator: Our final question today comes from Dan Fannon, from Jefferies.
Thanks Devin.
Area for you guys. It would seem like other remixing element about is was quite positive. So just so I get a sense of like how much more room. There is to go in terms of your penetration of your customers. Thanks.
Dan Fannon: Great. Thanks. Paul, I was just hoping to get some context around the industry and how you're thinking about advisor movement here in 2026, and how that might differ from, you know, say, last year.
Our final question today comes from Dan Fannon from Jefferies.
Dan Fannon: Great. Thanks. Paul, I was just hoping to get some context around the industry and how you're thinking about advisor movement here in 2026, and how that might differ from, you know, say, last year.
The tools to the, uh, to tap into the security space lending, uh, product, uh, has been, uh, significant as well and also recruiting is driven growth. Uh, we have a lot of the advisors were recruiting
Yes.
Great, thanks. Paul, I was just hoping to get some context around the industry and how you're thinking about advisor movement here in 2026, and how that might differ from, you know, say, last year.
You said, it's been the growth has been phenomenal with lower rates have certainly helped that growth, but as you point out education technology the tools too.
Uh coming with substantial uh sbl balances to their clients. So it's really, you know, all of the above approach.
Paul Shoukry: I think it's gonna be, based on our pipelines, we're optimistic about, at least movement to Raymond James. I can't speak to movement to other firms, but, we're pretty optimistic about the advisor movement to Raymond James. We're still viewed as a destination of choice. We're still viewed as a leading grower, in the wealth space. So we're optimistic about it. And, you know, it's still early in the calendar year, so we'll see what happens. I think, depends on some of these roll-ups, what happens with them, if anything, over the next year. That'll be a potential catalyst as well. So, you know, we don't try to time things.
Paul Shoukry: I think it's gonna be, based on our pipelines, we're optimistic about, at least movement to Raymond James. I can't speak to movement to other firms, but, we're pretty optimistic about the advisor movement to Raymond James. We're still viewed as a destination of choice. We're still viewed as a leading grower, in the wealth space. So we're optimistic about it. And, you know, it's still early in the calendar year, so we'll see what happens. I think, depends on some of these roll-ups, what happens with them, if anything, over the next year. That'll be a potential catalyst as well. So, you know, we don't try to time things.
I—I think it's going to be.
Tap into.
The securities based lending product.
It has been significant as well and also recruiting has driven growth.
A lot of the advisors we're recruiting.
And we're, we're optimistic long term about sbl's continuing to be used by clients because it's, uh, it's a great product for clients relative to other borrowing, uh, Solutions out there. It's much more flexible for example, uh, than a home equity loan, as
Coming with substantial SPL balances to their clients. So it's really all of the above approach.
And we're we're optimistic long term about SPL is continuing to be used by clients because it's.
So there's there's other substitutes out there that are much more mature that people have much higher, awareness of and as they learn about security space loans, there's a lot of clients that are interested in it.
All right, great. I'll wait there. Thanks a lot guys.
It's a great product for clients relative to other borrowings solutions out there. It's much more flexible for example that in home equity loans.
Thanks Devin.
Our final question. Today comes from Dan Fannon from Jeffrey's.
Paul Shoukry: Whether we recruit an advisor this year, next year, or five years from now, you know, we're making decisions over the next five to 10 years. So we just wanna make sure that we reinforce the unique culture that we have, the power of personal, the personal relationships we're building, and the client first, long-term culture, and values that we have as an organization, and invest in the platform to make sure that we're competitive along all dimensions, technology, product, and support, and making sure that advisor satisfaction and client satisfaction are very high. You know, we won the J.D. Power Award for the most trusted in our industry. Trust is critical in our space, as well. And so...
Whether we recruit an advisor this year, next year, or five years from now, you know, we're making decisions over the next five to 10 years. So we just wanna make sure that we reinforce the unique culture that we have, the power of personal, the personal relationships we're building, and the client first, long-term culture, and values that we have as an organization, and invest in the platform to make sure that we're competitive along all dimensions, technology, product, and support, and making sure that advisor satisfaction and client satisfaction are very high. You know, we won the J.D. Power Award for the most trusted in our industry. Trust is critical in our space, as well. And so...
So there is other substitutes out there that are much more mature.
Much higher awareness of and as they learn about securities based loans Theres a lot of clients that are interested in it.
A great thanks. So Paul was just hoping to get some context around the industry and how you're thinking about advisor movement here in 2026 and how that might differ from, you know, say last year.
Alright, great. Thanks, a lot guys.
I, I think it's going to be.
Thanks, Kevin.
Our final question today comes from Dan Fannon from Jefferies.
Great. Thanks, So Paul was just hoping to get some context around the industry and how youre thinking about advisor movement here in 2026, and how that might differ from say last year.
Based on a pipeline. We're optimistic about at least movement to Raymond James. I can't speak to movement to other firms, but, uh, we're pretty optimistic about the advisor movement to Raymond James. We're still viewed as a destination of choice. We're still viewed as a leading grower, uh,
In the in the well space. So we're we're optimistic about it and
Yes.
Paul Shoukry: And then we know that if we preserve that special combination of facets that make Raymond James so attractive, then we will continue to recruit advisors and retain our existing advisors with the high level of satisfaction that they have. And frankly, I could care less whether that happens this year or next year or five years from now. We're. It's a marathon, not a sprint, and we, that's why when I hear other firms talk about, "Oh, we think next quarter we're gonna lean into recruiting and put a little bit more money into it." It's like, well, that's not sustainable long-term recruiting. You know, it's a, it's a, it's a long-term process that requires a lot of investment.
And then we know that if we preserve that special combination of facets that make Raymond James so attractive, then we will continue to recruit advisors and retain our existing advisors with the high level of satisfaction that they have. And frankly, I could care less whether that happens this year or next year or five years from now. We're. It's a marathon, not a sprint, and we, that's why when I hear other firms talk about, "Oh, we think next quarter we're gonna lean into recruiting and put a little bit more money into it." It's like, well, that's not sustainable long-term recruiting. You know, it's a, it's a, it's a long-term process that requires a lot of investment.
I think it's going to be.
Based on our pipelines, we're optimistic about at least movement to Raymond James I can't speak to a movement to other firms, but we're pretty optimistic about the advisor movement to Raymond James We're still viewed as a destination of choice was still viewed as a leading grower.
Potential Catalyst as well. So, uh, you know, we we don't try to time things whether we recruit an adviser this year next year, or 5 years from now, you know, we're making decisions over the next 5 to 10 years. So, we just want to make sure that we reinforce the unique culture that we have the power personal, the personal relationships. We're building, uh, and The Client First long-term culture, uh, and values that we have as an organization and invest in the platform, to make sure that we're competitive along. All the dimensions technology and product and support, uh, and and making sure that advisor satisfaction and client satisfaction are very high. You know, we won the the JD power award for the most trusted in our industry, trust is critical in our space uh as well. And so uh, and then we know that if we preserve that special uh, combination of uh facets that make Raymond James. So attractive, then we will continue to recruit advisors and
In the wealth space, So we're optimistic about it.
It's still early in the calendar year, So we'll see what happens I think.
<unk> on some of these rollouts to what happens with them if anything over the next year, there will be potential catalysts as well so.
You know, it's still early in the calendar year so we'll see what happens. I think uh depends on some of these these rollups what happens with them. If anything over the next year they'll be a potential Catalyst as well. So you know, we we don't try to time things whether we recruit an adviser this year next year, or 5 years from now, you know, we're making decisions over the next 5 to ten years. So, we just want to make sure that we reinforce the unique culture that we have the power of personal the personal relationships, we're building. Um,
Retain our existing advisors with the high level of satisfaction that they have. And frankly, I could care less whether that happens this year, next year, or five years from now. Uh, we're—it's a marathon, not a sprint, and we—uh, that's why when I hear other firms talk about, 'Oh, we think next quarter we're going to lean into recruiting and put a little bit more money into it,' it's like, well, that's not—
We don't try to time things, whether we recruited advisor this year next year five years from now.
Paul Shoukry: And, if you dial up recruiting quarter by quarter or dial it down quarter by quarter, then you're not gonna get the quality advisors that you want. You're gonna get the advisors that are moving, or not moving for the highest check, and that's not who we're targeting. We have to have a competitive check, but we want the advisors that wanna be here over the long term to make more money and be satisfied here over the rest of their careers.
And, if you dial up recruiting quarter by quarter or dial it down quarter by quarter, then you're not gonna get the quality advisors that you want. You're gonna get the advisors that are moving, or not moving for the highest check, and that's not who we're targeting. We have to have a competitive check, but we want the advisors that wanna be here over the long term to make more money and be satisfied here over the rest of their careers.
Client, First long-term culture, uh, and values that we have as an organization and invest in the platform to make sure that we're competitive along all Dimensions technology and product and support.
Making decisions over the next five to 10 years. So we just want to make sure that we reinforce our unique culture that we have the power personal the personal relationships we're building.
Making sure that advisor satisfaction and client satisfaction are very high. You know we won the the JD power award for the most trusted in our industry, trust is critical in our space uh as well. And so um
And the client first long term culture.
In value. So we have some organization and invest in the platform to make sure that we're competitive along all dimensions technology and product and support.
Sustainable long-term recruiting you know it's a it's a it's a long-term process that requires a lot of investment and uh if you if you dial up recruiting quarter by quarter or dial it down quarter by quarter, then you're not going to get the quality advisors that you want. Uh, you're going to get the advisors that are moving, uh, or not moving for the highest check and that's not who we're targeting. We have to have a competitive check, but we want the advisors that want to be here over the long term to make more money and be satisfied here over the rest of their careers.
Dan Fannon: Understood. Thank you.
Dan Fannon: Understood. Thank you.
Understood, thank you.
And making sure that advisor satisfaction and client satisfaction are very high and we won the J D Power Award for the most trusted and our industry Trust is critical in our space as well and so.
Operator: Thank you-
Operator: Thank you-
Paul Shoukry: I think we answered all your questions. Oh, sorry to interrupt, but I think we answered all your questions. I really appreciate your time. On behalf of the Raymond James leadership team, we do not take your time or interest in Raymond James for granted. And, stay warm over the next several days here, and look forward to seeing and talking to all of you soon.
Paul Shoukry: I think we answered all your questions. Oh, sorry to interrupt, but I think we answered all your questions. I really appreciate your time. On behalf of the Raymond James leadership team, we do not take your time or interest in Raymond James for granted. And, stay warm over the next several days here, and look forward to seeing and talking to all of you soon.
And then we know that if we can preserve that special comb.
Combination of.
Raymond James So attractive that we will continue to recruit advisors and retain our existing advisors with a high level of satisfaction that they have and frankly I could care less whether that happens this year or next year five years from now.
I think, uh, we answered all your questions. Oh, sorry to interrupt. Uh, but, uh, I think we answered all your questions. I really appreciate your time on behalf of the Raymond James leadership team. We do not take your time or interest in Raymond James for granted, and, uh, stay warm over the next several days here, and, uh, look forward to seeing and talking to all of you soon.
Operator: Once again, everyone, that does conclude today's conference. We would like to thank you all-
Operator: Once again, everyone, that does conclude today's conference. We would like to thank you all-
Paul Shoukry: Goodbye
Paul Shoukry: Goodbye
Operator: ... for your participation. You may now disconnect.
Operator: ... for your participation. You may now disconnect.
Once again, everyone, that does conclude today's conference. We would like to thank you all for your participation. You may now disconnect.
And then we know that if we preserve that special, uh, combination of uh, facets that make Raymond James. So attractive, then we will continue to recruit advisors and retain our existing advisors with the high level of satisfaction that they have. And frankly, I could care less whether that happens this year or next year or 5 years from now we're it's a marathon not a Sprint and we uh, that's why when I hear other firms talk about, oh we think next quarter, we're going to lean into recruiting and put a little bit more money into it. It's like, well, that's not sustainable long-term recruiting, you know, it's a, it's a, it's a long-term process that requires a lot of Investments and uh, if you if you dial up recruiting border by quarter or dial it down quarter by quarter, then you're not going to get the quality.
It's a marathon not a strengthened.
Why wouldn't I hear other firms talk about though we think next quarter, we're going to lean into recruiting and put a little bit more money into <unk>.
Sustainable long term recruiting.
It's a long term process that requires a lot of investments.
Advisor that you want, uh, you're going to get the advisors that are moving, uh, or not moving for the highest check and that's not who we're targeting. We have to have a competitor check, but we want the advisors that want to be here over the long term to make more money and be satisfied here over the rest of their careers.
Understood, thank you.
If you dial up recruiting quarter by quarter dial it down quarter by quarter, So youre not going to get the quality advisers that you want.
Youre going to get the advisors are moving or not moving for the highest check in who we're targeting we have to have a competitive check, but we want the advisors that want to be here over the long term to make more money and be satisfied here over the rest of their careers.
Understood. Thank you.
I think, uh, we answered all your questions. Oh, sorry to interrupt. Uh, but uh, I think we answered all your questions. I really appreciate your time on behalf of the Raymond James leadership team. We do not take your time or interest in Raymond James for granted and, uh, stay warm over the next several days here and uh, look forward to seeing and talking to all of you soon.
Good morning, and thank God, we answered all your questions sorry to interrupt but.
Once again, everyone that does conclude today's conference, we would like to thank you all for your participation. You may now disconnect
I think we answered all your questions I really appreciate your time on behalf of the Raymond James' leadership team, we do not take your time or interest in Raymond James for granted.
Stay warm over the next several days here and look forward to seeing and talking to all of you soon.
Once again, everyone that does conclude today's conference we would like to thank goodbye.
