2020 Comp Plan: Raymond James Says ‘No Changes’
Raymond James Financial signaled to top advisors in its employee channel last week that it will keep the core part of its compensation plan unchanged next year.
The promise to keep the grid unchanged occurred during a question-and-answer session at a recognition club conference held last week at the Four Seasons in Costa Rica, according to two sources at the meeting. The conference was for around 150 Chairman’s Council members, a club for brokers with at least $1.3 million in production.
Raymond James spokespeople did not respond to a request for comment on the 2020 comp plan.
Advisors at full-service brokerage firms are always jittery about annual compensation plan alterations, and a Raymond James executive at a question-and-answer session at the conference gave assurances that there were no grid surprises in the works. The broker-dealer’s 2018 comp plan reduced payout percentages by around 100 basis points as the company was dealing with rising compliance and recruiting costs.
Raymond James has been aggressively recruiting brokers in recent years while many of its larger competitors have pulled back. The firm markets its broker-centric culture as a recruiting selling point, and often contrasts its steady approach to payouts to the frequent changes that wirehouses make to mold sales behavior.
Merrill Lynch two years ago introduced a so-called flexible grid that adds or subtracts as much as 200 basis points on payouts based on ability to increase assets and household accounts. Morgan Stanley Wealth Management last year introduced account-level bonuses of 100 basis points for brokers who create financial plans for most of their customers.
As part of Raymond James recruiting pitch, executives say they are indifferent as to whether advisors join its private client group, independent or registered investment adviser channels. RayJay also promotes its brokers’ freedom to move to other firms without fear of lawsuits, contrasting itself to Morgan Stanley and UBS Financial Services, which raised the fear factor following their late 2017 departures from the Protocol for Broker Recruiting..
Raymond James, which is based in St. Petersburg, Fla., had 7,862 brokers as of March 31, up 3.4% from a year earlier. Its private client group employee channel has 3,192 brokers, up 4.6% from the end of the 2018 first quarter.
The 4,670 independent brokers affiliated with Raymond James Financial Services receive payouts of 80% and higher of revenue produced, as is typical of independent broker-dealers, but are responsible for paying much of their overhead.