RayJay Quantifies Boost in Assets, Fee Accounts from March Doldrums
Raymond James Financial publishes a monthly report of its operating data, unusual among brokerage firms, and its May numbers give an early look as to how investors are handling the market volatility and emotional ups-and-downs of the coronavirus crisis.
Assets in advisory accounts, which brokerage firms prefer because they generate fee-based revenue regardless of customer transactions, rose 4% and 14% from April and the year-earlier May to $431.8 billion.
Client assets under administration across Raymond James increased 9% over May 2019 and 4% over April 2020. The increases reflected equity market appreciation as well as a net increase of private client group financial advisors as the firm continued its “remote” hiring campaign, the company said.
“Financial advisor recruiting activity has improved over the past month and the pipeline remains solid,” Chairman and CEO Paul Reilly said in a prepared statement.
Retail investor sentiment, to be sure, can shift quickly, particularly during the unique Covid-19 market that has brought global economies to a near halt. U.S. markets plunged in March, and then recouped the losses in May and early June.
The S&P 500 was up 17.4% for the year as of Wednesday’s close, but in a sign of the wild swings since the outbreak lost 2.6% during the day amid reports of virus surges in several Sunbelt states.
In another indication of retail concerns, Raymond James shifted $51.5 billion of cash from client brokerage accounts to its bank in May, a 33% jump from such transfers in May 2019, and just about flat with the $51.6 billion that shifted to cash in April 2020.
Market bulls say the cash represents plenty of “dry powder” to be reinvested once confidence returns.
Raymond James’ capital markets segment benefited in May from ”strong fixed income brokerage revenues,” the company said, but merger-and-acquisition advisory revenue was “negatively impacted by economic uncertainty.” It did not provide specific data on its trading or investment banking sectors.