2021 COMP: Raymond James Keeping Advisor Pay Unchanged
Raymond James Financial told managers at its Raymond James & Associates private client unit this week that it will not make major changes to 2021 compensation for the roughly 3,400 employee brokers they supervise.
The Florida-based company operates on a fiscal year that ends September 30, making it one of the first large retail brokerage firms that discloses its annual compensation plan.
Compensation consultants and recruiters expect 2021 plans industry-wide to be unusually stable, given the extraordinary circumstances of the economy and the worldwide health crisis.
“I would think that this year, in the midst of a pandemic, firms would be very reluctant to make any real substantive changes to their compensation,” said Mark Elzweig, a New York-based recruiter. “It would be uniquely bad for morale.”
Brokers at Raymond James have been on edge, however, because of cutbacks at the company. Raymond James last week eliminated more than 500 jobs, or just under 4% of its workforce, in response to a coronavirus-related reduction in earnings.
Four company sources said the St. Petersburg, Florida-based firm reassured its employee-channel managers that there will be no changes to the payout grid—which pays brokers 28% to 50% of the fees and commissions they generate from client accounts—or to revenue breakpoints on the grid.
Two of the sources said that there may be tweaks to deferred compensation incentives tied to length of service and other metrics, but were reassured that the bulk of the plan will be untouched from 2020.
A company spokesman declined to discuss specifics of the 2021 plan, or say when it will be distributed to brokers.
Raymond James & Associates as of June 30 had 3,379 brokers who are so-called W-2 employees—up 5% from a year earlier. Raymond James Financial, the parent company, also works with 4,800 independent contractor brokers who work under a different comp scheme that is much more stable than the one governing employed brokers.
Raymond James has been an aggressive recruiter across its brokerage channels in recent years, as many of its competitors were cutting hiring budgets.
Chairman and Chief Executive Paul Reilly on Wednesday credited the company’s 9% growth of financial assets under management in August from 12 months earlier to the net addition of advisors, as well as to stock market appreciation.
“Our continued strength in financial advisor retention and recruiting drove record Private Client Group assets in fee-based accounts of $483.1 billion, which grew 20% over August 2019,” he added in a prepared statement.