Raymond James at Morgan Stanley Conference: Strategic Growth Plans

On Tuesday, 10 June 2025, Raymond James Financial Inc. (NYSE:RJF) presented at the Morgan Stanley US Financials, Payments & CRE Conference 2025. CEO Paul Shukri outlined the firm’s ambitious growth strategy, emphasizing a target of exceeding $20 billion in revenue by 2030. While the company is optimistic about its unique market positioning, it faces challenges such as market volatility and tariff uncertainties.

Key Takeaways

• Raymond James aims for over $20 billion in revenue by 2030, targeting an 8% CAGR.
• Significant investment in technology, especially in wealth management, with nearly $1 billion allocated.
• Market volatility and tariff issues are impacting capital markets, delaying deal activity.
• Expansion efforts focus on the Northeast and West Coast markets.
• Culture is a pivotal factor in recruiting and retaining advisors.

Financial Results

• Revenue Growth: The company aims for an 8% CAGR to surpass $20 billion by 2030, building on a previous 5-year net revenue growth of approximately 13%.

Operational Updates

• Wealth Management: Close to $1 billion is being invested in technology to enhance the wealth business, expand alternative platforms, and improve lending capabilities.
• Market Expansion: Efforts are concentrated on growing market share in the Northeast and West Coast, where current levels are less than half the national average.
• Recruiting: Raymond James highlights its culture as the main attraction for advisors, boasting industry-leading retention rates.
• Technology: New advisor-facing tools, including AI-driven solutions, aim to boost productivity and offer tailored client advice.

Future Outlook

• Investment Banking: A surge in activity is anticipated once tariff issues are resolved, driven by pent-up demand.
• Loans: Securities-based lending is expected to maintain mid-teens growth.
• Cash Sweep: The company aims to increase client cash sweep balances to stabilize quarterly fee billings.
• Strategic Direction: A focus on quality over quantity in advisor recruitment is maintained.

Q&A Highlights

• Acquisition Opportunities: Raymond James does not comment on specific transactions but emphasizes cultural fit and a high-touch service model as competitive advantages.
• Balance Sheet: Advisors are increasingly concerned about the financial stability of potential partner firms.

For a more detailed understanding, readers are encouraged to refer to the full transcript.

Full transcript - Morgan Stanley US Financials, Payments & CRE Conference 2025:

Mike Cyprus, Equity Analyst, Morgan Stanley Research: Alright. We can go ahead and get started. For important disclosures, please see the Morgan Stanley research disclosure website at morganstanley.com/researchdisclosures. Note that taking of photographs and use of recording devices also not allowed. If you have any questions, please reach out to your Morgan Stanley sales representative.

With that out of the way, good morning, everyone. Thanks for joining us here on day one of the Morgan Stanley Financials Conference. I’m Mike Cyprus, equity analyst covering brokers, asset managers, and exchanges for Morgan Stanley Research. And for our next session, we have Raymond James, and I’m excited to welcome their CEO, Paul Shukri. Raymond James Financial is a leading diversified financial services company providing wealth management, capital markets, asset management banking, and other services to individuals and institutions with total client assets of over $1,500,000,000,000.

Paul, thank you for joining us today Yeah. Making the trip up here to New York.

Paul Shukri, CEO, Raymond James: My pleasure, Mike. Glad to be here.

Mike Cyprus, Equity Analyst, Morgan Stanley Research: Yeah. And it feels like it was just yesterday we were down in in Saint Pete for your Investor Day where you outlined twenty thirty twenty thirty vision, something like that. That is 20,000,000,000 net revenue by 2030, which implies about an 8% annual growth rate relative to what you put up in fiscal twenty four. A little bit slower than the 13% or so net revenue growth you guys have put up over the last five years. So just curious, you know, what’s sort of driving the deceleration in terms of your expectation there?

Maybe you could impact the building blocks around that 8% CAGR that you guys expect and what might be some possible sources of upside.

Paul Shukri, CEO, Raymond James: Great. Yes. So our goal is that we laid out long term goal that we laid out at the Analyst Investor Day was to exceed $20,000,000,000 in revenues by 2030, and that’s a goal that we have communicated internally and externally as well. The the the growth rate that you’re describing includes pretty conservative factors for equity market depreciation. And so to the extent that we see the same equity market appreciation that we’ve seen in the last five to seven years, certainly, number could be even higher than the $20,000,000,000 revenue target.

So we’re really excited. We put together plans across all of our businesses, and, you know, we’re excited with our business position and our growth prospects. We’re in a unique position in each one of our businesses where we have the critical mass to be competitive in each business, make the investments necessary to in technology and products and support to be competitive in each one of the businesses. But also, at the same time, we have continued headroom to grow in each one of our businesses. So there’s a lot of larger firms with critical mass, but they don’t necessarily have the headroom to grow doing what they’re doing.

So they’re experimenting with different business lines that are not core or sometimes even dilutive to their core businesses. And there’s other firms that are much smaller that have plenty of headroom to grow, but they don’t have the critical mass to make the investments necessary to remain competitive. I mean, we’re making a technology investment, for example, of close to a billion dollars. Most of that’s going in the wealth business. If you’re a smaller wealth firm and you can’t keep up with those types of investments to remain competitive, it’s gonna really challenge your ability to remain independent.

So for us across all of our businesses to have that critical mass and the continued headroom to grow makes us really excited about the growth prospects.

Mike Cyprus, Equity Analyst, Morgan Stanley Research: Maybe shifting to your value proposition, which was also a a major topic of of Investor Day, and in particular, in your session where you mentioned that your value proposition is to have the capabilities to be competitive with the largest firms, but to have the culture on sort of family friendly feel of smaller firms. So I I guess how built out are the capabilities today at Raymond James compared to where you would like that to be? And as you look out over the next five years, what capabilities do you wanna add or or fill in or even enhance?

Paul Shukri, CEO, Raymond James: Yeah. We call it the best of both worlds, and that helps us that value proposition helps us deliver on our vision to be the absolute best partner for financial professionals and their clients. And so when we look at how our capabilities stack up across all of our businesses, it’s very competitive today from you know, we recruit about 75 to 80 of our advisers from larger wirehouses. And so they come in with the expectation of, you know, in house trust capabilities. We have in house trust company, lending capabilities higher net worth clients, alternative investments, cutting edge technology.

So we offer all of those things. But with that being said, it’s dynamic. And so we we and it the the standards and requirements increase each year. Client preferences change each year. Advisor preferences continue to evolve with new technologies.

And so we’re gonna have to continue to invest heavily in technology as one example and expanding our Alt platform and expanding the lending capabilities. So we are gonna continue to invest in expanding and broadening and deepening all the capabilities necessary to remain competitive and a leading provider and the absolute best partner for financial professionals and their clients.

Mike Cyprus, Equity Analyst, Morgan Stanley Research: Why don’t we shift and talk about the market backdrop, market environment today for your business, been a little bit volatile in terms of a of a backdrop. So maybe just on your private client group, PCG business. What are you seeing there just in terms of end customer behavior as compared to maybe prior volatile periods such as 2022 or even COVID? And how are financial advisers navigating through, and how might they capitalize on some opportunities in this market backdrop?

Paul Shukri, CEO, Raymond James: It’s interesting. Increased volatility really reinforces and highlights the value of having a financial adviser. When when you’re in a fifteen year bull market and everything kind of is going up in one direction, people question the need to have a financial adviser because, you know, if they’re investing on their own, they’re generally doing pretty well. What what we saw with periods like with COVID, and certainly more recently, with the tariff uncertainty is that, the uncertainty increases the risk, and the risk increases the desire to have professional financial adviser to help them navigate the choppy and turbulent times. And so what we see when we look at our end clients is they have their advisers have helped them navigate this time not selling out at the bottoms and actually continuing to rebalance and increase their allocations to equities as equities have gone down.

And so the client in client remains engaged in the markets. They’re staying disciplined with their find long term financial plans that their advisers help them establish and and help them, more importantly, stay consistent to in different market environments. And on your capital markets business, tariffs have had a little bit of

Mike Cyprus, Equity Analyst, Morgan Stanley Research: a dampening impact from on the M and A marketplace. Your business is a little bit more skewed to sponsors, I believe. So maybe talk about how you see the pace of deal activity from the sponsor community versus strategics and the differences that you see between those? And what what do you think it’s gonna take to see a more meaningful pickup in deal activity?

Paul Shukri, CEO, Raymond James: Yeah. I mean, after two years of relative relatively muted investment banking activity across the industry as rates started rising. Six months ago, we thought that this was gonna be a fantastic year just based on our pipelines, and there’s a lot of pent up demand from both buyers and sellers to transact. And that sort of hit a brick wall across the industry with the tariff uncertainty across all really across all sectors. It’s not only the sectors that were directly impacted by potential tariff changes.

It’s just the uncertainty in the the markets, the ability to whether or not a deal can be financed at attractive rates given the windows opening and closing closing for financing, etcetera. And so our pipelines continue to grow. We’re continuing to add new engagements, but the realization of that of that pipeline is certainly being prolonged with this uncertainty. And so your question around what will it take for across the industry for us to see more realizations in investment banking. I think it’s just more clarity around tariffs.

So while the market seem to really like these ninety day delays and postponements, what it doesn’t do is give buyers and sellers a lot of clarity in terms of what’s actually going to happen, and therefore, what what is the appropriate price to pay for a company when you don’t know exactly what their margins are gonna be ninety days from now when the tariffs are actually negotiated and and determined. And so that that’s the type of certainty I think we’re gonna need to see before the industry starts seeing more investment banking activity. But once we get that certainty, get based on the pipelines that we have and based on the now two and a half years of pent up demand because the financial sponsors, to your point, a lot of their holdings are well beyond their original hold periods, and there’s buyers that have a lot of dry powder and capital to deploy that are, you know, well well beyond what their their original timelines for deploying that capital. So there’s so much pent up demand from both buyers and sellers. Once we get that clarity, I think it could really be a huge tailwind for investment banking.

Mike Cyprus, Equity Analyst, Morgan Stanley Research: But what does that clarity look like? Like, when you think about the tariff uncertainty, how many sort of tariff agreements does do we need to see to have the sort of clarity that you’re speaking to?

Paul Shukri, CEO, Raymond James: I think the two biggest, frankly, is China and the EU. And and so, you know, for for a CEO or a a sponsor to not know whether the tariffs in China ninety days from now or, I guess, seventy days from now, however many days it is, is gonna be 20% or a 145%. That’s a pretty big range to manage to. Right? And if you think about a pro form a in a model trying to model out the margin ranges based on those that tariff spectrum, it’s just very difficult to transact in that environment.

But I I would say when you look at the tariff environment, certainly, there’s a lot of countries involved, but the two biggest beyond Canada and Mexico would be China and the EU and figuring out, okay, what is the deal there that they strike? And, you know, that once those guardrails are set, then you can start transacting with a much more narrow range of financial expectations and valuations. Great. Why don’t we shift gears to your private client group PCG business? You mentioned at Investor Day an opportunity to expand market share in the Northeast and in the West Coast.

So I guess what sort of footprint

Mike Cyprus, Equity Analyst, Morgan Stanley Research: do you have there today? And talk about the steps that you’re taking to lean into these markets, the hurdles you may need to overcome, and ultimately, what sort of footprint do you envision having?

Paul Shukri, CEO, Raymond James: In the Northeast and California out West, I would say our market share there in the wealth business is less than half of our national average. And so and those those markets, as you know well, are high wealth markets, high wealth concentration markets. So our opportunities there are significant, but I also don’t want to overstate our market share in our core markets. We have a significant opportunity to grow in Florida. I I think of Sarasota, which is an hour away from our headquarters.

We have a great presence there, but there’s another firm just two floors away in the same building that has three times the number of financial advisers. So we have a a a substantial growth opportunity. Again, going back to my opening comments, doing what we’re doing, have plenty of headroom to continue to grow across the entire country, also in Canada and The UK. In terms of the barriers in to to grow out west to the Northeast, it’s the both of those are extremely competitive environments. There’s a lot of firms looking for great advisers in those markets, but our other markets are competitive too.

So having good leadership in place, rein reinvesting in our brand to increase our brand awareness in those markets, and really just success drives success. So you bring on high quality advisers with prominent reputation in those markets, and that that drives more success going forward.

Mike Cyprus, Equity Analyst, Morgan Stanley Research: So you envision this being dozens of advisers that you may be looking to sort of recruit in these markets, or is it more like hundreds? And any sort of sense on framing?

Paul Shukri, CEO, Raymond James: Yeah. Long term, it certainly could be hundreds. I mean, these are huge markets. So, yeah, we the headroom in those markets are substantial. And we’re we’re talking, you know, hundreds of billions of client assets in those markets that are achievable if we just realize our national average market share in those markets.

So it’s not gonna happen overnight, but we’re we’re focused on making the investments there. We have leadership in place now at West that’s already started making a difference, And so we we’re excited about

Mike Cyprus, Equity Analyst, Morgan Stanley Research: the prospects in those markets. Speaking of recruiting, why don’t we stick with that for a moment? Maybe talk a little bit more broadly how Raymond James is recruiting and winning advisers in a really highly competitive marketplace today. What are the top three selling points that you that you see in terms of why advisers join the platform? And when they don’t join, but they make it to a final round, they decide to go somewhere else or just not join, what are the top reasons why they don’t join?

Paul Shukri, CEO, Raymond James: Well, by far, the top reason they do join, I’ve been spending 80% of my time traveling the country, meeting with our advisers, some who recently joined, some who have been with us for decades. And the number one reason I hear that they are excited about being affiliated with Raymond James is our culture. In the number of times I’ve heard almost verbatim often with tears in their eyes that the best professional decision they’ve ever made was affiliating with Raymond James, and the biggest regret that they have is they didn’t do it two to three years earlier. And when I asked why is that, it’s just the people, the culture. I didn’t realize you know, my other firm said that they were client focused just like you say you’re client focused, but I didn’t realize until I affiliated with Raymond James what that really means and how different the decisions are at Raymond James versus my prior firm.

And so and they say, hey. As you take over as CEO, please preserve this special culture. So when the board asked me, you know, at our long range planning meeting, how are we gonna measure success ten years from now? What financial metrics are we gonna track? What initiatives are we gonna track?

So all those things are important, but the absolute most important thing that we can track, harder to measure in some ways, is when we go across the country and visit with our financial professionals. Are they saying with passion, authenticity, and emotion, the best decision I ever made was joining Raymond James, and the biggest regret I have is I didn’t do it three years earlier? Because if they’re still saying that ten years from now, we’ve been successful in preserving the absolute most important thing at Raymond James, which is the culture, the way people treat each other. And then the capabilities, of course, culture is critical, but with that culture without capabilities is not sufficient. So you have to have the capabilities going back to the best of both world discussion we had earlier.

The advisers that come to Raymond James are blown away when we do the technology demos at home office. They, you know, they they expected good technology, but a lot of them are blown away by leading technology that we have relative to the firms that they’re coming from and oftentimes the bigger firms that they’re coming from. Because the bigger firms that they’re coming from, they have huge technology budgets, but so much of it’s going into banking and payments and other technology, whereas most of our technology, the vast majority of it’s going into the wealth business. And so having those capabilities coupled with that culture is why advisers join Raymond James and stay at Raymond James. That’s why we have leading retention in the industry as well.

Your question around why do we lose advisers, and we I look at a schedule with the leadership team every single month on every adviser that leaves. The vast, vast majority of the time, it’s, you know, for a check. Some of them are going through life life, changes, whether it’s divorce or other issues that, require them to, you know, pursue a liquidation event. And and so they are leaving for a bigger check. Or when we’re when we’re trying to recruit an adviser and we lose, it’s very rarely because they like the culture at the other firm or they like the capabilities at the other firm better.

It’s almost always because the other firm was willing to write a bigger check. And I always say, in the absence of a value proposition, the biggest check is the only way those type of firms can compete. And, you know, we we win more than our fair share of those situations, but we don’t win all of them.

Mike Cyprus, Equity Analyst, Morgan Stanley Research: Great. At Investor Day, you also announced spending, and you mentioned it as well, nearly a billion dollars on technology this year. I believe much of it is around adviser facing technology, including trying to make them more efficient. Understand you have rolled out a number of tools, including a a meeting summarization tool that’s saving advisers about two to six hours per week. I think your team had quoted just the other day.

So I guess what portion of advisers are seeing those savings today, and how do you see the rollout of these sort of tools?

Paul Shukri, CEO, Raymond James: I would say for some of these tools, we’re still in the top or bottom of the inning in terms of adviser utilization. So, you know, the more mature tools certainly have higher utilization, but the meeting summary tool that we just rolled out, for example, we’re still scratching the surface on awareness and utilization of that tool as an example. So we’re gonna continue to invest in technologies. One of our biggest challenge with all of the technology features we roll out is making sure that advisers are aware of everything that we offer. You know, we go to our conferences, and we oftentimes get suggestions or requests, and, our technology team says, gosh.

That’s been out for two years. Let’s show you how to use it. And so, it is that is a challenge when you’re rolling out so many features. Just like when you get a new phone, you’re probably only using 10% of their features. And half the things that you wish your phone had when you talk to one of your more tech savvy friends, they show you how to use it.

And so we do spend a lot of time trying to communicate and educate our advisers on all of the features that already exist, but we’re also investing heavily on new technologies. We’ll talk about AI, I’m sure, as an example of ways to help them gain efficiencies in their practices.

Mike Cyprus, Equity Analyst, Morgan Stanley Research: And that’s a great segue to sort of an AI oriented question. So I guess just talk a little bit about your vision there around enhancing adviser productivity with these AI tools. What’s the sort of magnitude of how much more productive advisers could be ultimately? How many more clients can they serve?

Paul Shukri, CEO, Raymond James: Yeah. I think, you know, that question reminds me of, you know, if you if you ask someone, imagine what the Internet can do back in 1996. Right? And we would all have wild expectations for that, and we would be way off and way short of what the Internet was capable of. And so I think we we have a lot of conviction that AI will be a game changer for not only our industry, but for all industries.

But we also have a lot of conviction that it’s too early to tell. It would almost be naive to guess how big of a change it’s gonna make and how it’s gonna make those changes in our industry. So the industry and you know, we’ve been focused on technologies that support AI and AI now for some time, but we’re really doubling down on that focus. We just announced a new chief AI officer and a dedicated group looking for opportunities to deploy AI across the organization. And it’s relatively unique for us to have an internal lookout function.

We usually rely on outside consulting firms for something like this. But as we spoke to outside consulting firms, so many of them are focused on AI to disintermediate the financial professionals to get directly to the clients, and that’s not our strategy. Our strategy is to use technology and to use AI to empower, to better enable our financial professionals to better service their clients. And so we needed to have our own in house capability given how unique our strategy is around technology and AI, which is not to go around the adviser, but to make the adviser even more effective than they are now. So it’s exciting in the in the endeavor.

We’ve already and it some of it’s internally developed AI, but some of it also is partnering with party companies that are leveraging AI in their tools as well. And so we we’re excited about the prospects, but it’s still very early innings. And related

Mike Cyprus, Equity Analyst, Morgan Stanley Research: to that, you are spending a lot on technology. We we mentioned before the billion dollars. I guess, do you see that billion dollars or so growing over the next five years compared to the 11% annual growth that we have seen over the last five years? Is there anything you wanna sort of accelerate to drive that maybe a little bit faster to lean into a bit more? And how how do you think about as well your capacity and bandwidth for even layering on any sort of faster or incremental growth there?

Paul Shukri, CEO, Raymond James: I would I would guess that technology will continue to be our fastest growing investment at the firm just given how critical it is for our business. And in terms of the trajectory going forward, a lot of it will depend on revenue growth. So over a long period of time, we we wanna continue to grow revenues faster than we grow investments and expenses. That way, we can, you know, continue to to drive operating leverage and grow profitability as well. And so a lot of the you know, if you look over the next five or ten years, while I I believe technology will continue to be the fastest growing investment and expense in the firm, the the actual growth rate will largely depend on the revenue growth as well.

Mike Cyprus, Equity Analyst, Morgan Stanley Research: Okay. And some suggest that the differentiator over time is not gonna be the AI models themselves, but the proprietary data to gain business insights. Maybe how are you approaching this? What sort of insights might you be able to glean?

Paul Shukri, CEO, Raymond James: That’s critical, critical point. You know, AI is only as good as the data that you have. And so we are spending so much time organizing and cleaning up the data. We we’ve launched, for example, generative AI for internal search capabilities on our what we call RJNet. And the issues that we’ve after we rolled it out, the issues that we had with the quality of the search responses was bad data that needed to be cleaned up in the underlying internal pages.

So we asked all the internal teams to clean up the stale data. That way, the generative AI is producing good output. So what comes out of AI is only as good as what goes in from a data perspective. And so we are spending a lot of resources and effort on making sure that the internal data is clean and organized well, and we’re also helping educate advisers on the data that they input in in their CRM tools and other tools, how the quality of that data is so critical in terms of how the AI tools will help them going forward. So that is a big focus and has to be a big focus for any users of AI is the data that goes into it.

Mike Cyprus, Equity Analyst, Morgan Stanley Research: And how do you think about the insights that you might be able to derive from this as you think about client oriented data, adviser data? Ultimately, what’s your sort of vision there? Is there other tools or other capabilities that could be done developed then over time as you think about that?

Paul Shukri, CEO, Raymond James: Yeah. I think of AI as sort of a a pyramid of priorities, and the the bottom part of that pyramid is helping gain efficiencies for both the adviser and the firm and back office processes, middle office processes, and front office processes that can be more efficient through deploying AI. And then as you work your way up in the pyramid, infrastructure and security is so critical. So using AI in cybersecurity to process more false positives, for example, that come up in our cybersecurity areas in a much faster time, seconds instead of days, and and detect threats in a much more effective and efficient way as an example. And then the top end of the pyramid to your question is helping advisers create provide them with data driven insights that utilizing AI, utilizing the underlying data so they can provide more tailored yet scalable advice to their clients.

And that’s really the most powerful aspect of AI in our business is can you provide in a more scalable way to more clients even more tailored and bespoke advice to those clients with the utilization of AI? And that’s the ultimate goal, and that’s the top of

Mike Cyprus, Equity Analyst, Morgan Stanley Research: the pyramid that we’re pursuing. Right. Why don’t we shift to the balance sheet now? You’re growing your loans to your private clients is is a main focus of yours, particularly in the mortgage and securities based lending SPL side. So I guess what sort of macro environment do we need to see a more meaningful acceleration in mortgage and SPL loan growth?

And and as interest rates remain where they are today, how might loan growth look over the next couple of years?

Paul Shukri, CEO, Raymond James: Yeah. Just over the last, I would say, two to three quarters, the securities based lending growth has really recovered. You know, in the two year period when rates were rising, you know, 500 basis points, and those are products that are based on short term rates. You know, there was sticker shock, and, you know, borrowers weren’t used to the rates that they were seeing, and so they were paying down a lot of the unnecessary or the the the the discretionary lending that they had, they were paying down, I would tell you. And so with rates coming in a little bit and and clients getting used to the new level of rates that we’re at, the borrowings have started to increase again.

And we’ve seen, for example, securities based lending growth grow 15% year over year. And while and the jumbo mortgages are much more resilient in this type of rate environment than mortgages across the industry. I think we’ve seen 7% year over year growth in jumbo mortgages, so that’s recovered a bit as well. Mortgage growth is gonna be, you know, driven by not only interest rates, but more importantly, transaction home sales, and that has slowed down. There’s still a lack of inventory.

It’s improved from the the the troughs, but there’s still a relatively low level of inventories across most markets for the the jumbo mortgage borrowers, the higher net worth clients that we serve. And I think this environment, actually, as long as we have stable rates, securities based lending growth can continue to recover as it has over the last two or three quarters. So we’re pretty optimistic about securities based lending growth because clients have become accustomed to the new level of interest rates.

Mike Cyprus, Equity Analyst, Morgan Stanley Research: So continuing to recover. So you think sustaining that sort of mid teens growth in SBL, maybe next couple of quarters, reasonable there?

Paul Shukri, CEO, Raymond James: Yeah. I think it’s a good as a good a guess as any. Yeah. Because we’re still I long term, I can’t speak to the next quarter or two, but long term, we still have a fundamental belief that the awareness and penetration of securities based loans is relatively low across the industry. And so when you look at that as a a borrowing source relative to a home equity loan, for example, there’s a lot of advantages and flexibility and portability, etcetera, that securities based lending has that more home equity lines don’t, for example.

So we’re still very bullish about the long term prospects for SBLs.

Mike Cyprus, Equity Analyst, Morgan Stanley Research: Great. And we’ve seen cash rebalances stabilize, which is great to finally see, but you guys still won’t declare the cash sorting saga to be over just yet. So I guess what environment is gonna be helpful as you think about supporting cash sweep growth? And how do you envision sweeps trending here if rates remain where they are today?

Paul Shukri, CEO, Raymond James: Yeah. I remember being at this conference, I think, five years ago, and we were one of the only firms that said that with rising rates, cash sweep balances might actually decline, whereas a lot of the other firms are saying, no. We think the the world’s different this time, and they’ll be more resilient. So you are more conservative with our cash sweep projections and the the disclosure and guidance around that. I would say that for us to declare victory, we we really need to start seeing cash balances increase because we still have quarterly fee billings every quarter.

You know, last quarter is 1 and a half billion dollars. And so unless cash sweep balances are increasing by about $1.5 to $2,000,000,000 a quarter, you’re always gonna see the net impact from the quarterly fee billings, which is a great it’s the highest source of revenues for the firm. So it’s a it’s a great problem to have, but that’s what’s causing us some pause in declaring victory there is that we need to actually see an increase in client cash sweep balances throughout the quarter to offset the quarterly fee billings before we say, okay, that those balances are truly stable.

Mike Cyprus, Equity Analyst, Morgan Stanley Research: And what environment do you think might support that sort of inflection to to growth there?

Paul Shukri, CEO, Raymond James: I just think it’s the natural growth of the business as we bring on new advisers, to bring on new clients, to bring on new cash balances. So I think it’s you know, certainly, this environment, we we have seen reinvestment into higher yielding alternatives sort of plateau, I would say. So we’re not seeing that trend persist or, certainly, it’s decelerated relative to where it was a year or two ago. So I think this type of environment, with time, we could see that dynamic happen. Any sense?

How long? Is it, like, a six month time horizon? Twelve months? I I couldn’t guess. Your guess would

Mike Cyprus, Equity Analyst, Morgan Stanley Research: be as good, if not better than mine. But achievable even in this sort of environment with rates where they are? I think so. Okay. Well, that’s encouraging at least.

Yeah. It’s just a matter of time then. Okay. Any questions from the audience? Yep.

In the back.

Unidentified speaker: Just wondering from in your from your perspective why you were not the acquirer of choice for Commonwealth. And as we move forward through the disruption that’s going on there, your ability to pick off some advisers.

Paul Shukri, CEO, Raymond James: Yeah. We don’t speak about, you know, specific transactions one way or the other unless we announce them as our own. What I would say is acquisition oftentimes lead to disruption and and opportunity. And and when we look at the opportunity in the environment right now more broadly, our pipelines are picking up substantially each week from a recruiting perspective. We’re seeing a lot of tailwinds, and we’re really excited about the advisers that are looking at Raymond James because they want a good cultural fit.

They want a higher touch service model. You know, some of these other firms are servicing tens of thousands of advisers with a fraction of the average production. So it’s a very different model. We focus on quality over quantity in terms of the advisers that we have, whereas so many other firms, particularly on the independent side of the business, are focused on quantity over quality. It’s a very different strategy.

We we don’t have aspirations to be the biggest firm in the world. We we have aspirations to be the best firm in the world. And what’s becoming increasingly, particularly on the independent side, with both strategic and private equity backed firms, a competitive advantage for Raymond James is advisers in this this market uncertainty are starting to look at balance sheet for the time maybe in ten to fifteen years since the financial crisis. So they wanna be affiliated with a firm. They wanna entrust their client assets with a firm that has a strong balance sheet, and that’s becoming more of a differentiator for us given how far we are into this bull market, given the heightened uncertainty.

And so, they are stunned when they look at some of these independent independent firms that have negative tangible equity, for example. You know? And they’re saying, wow. How can I entrust my client assets? A lot of them are saying, how can I entrust my client assets to be custodied with a firm with negative tangible equity?

Or, you know, we have $2,000,000,000 of senior notes over $12,000,000,000 of equity, and they’re looking at balance sheets saying, there’s a firm there’s firms with a fraction of your equity that have multiples of your senior debt. And so that those are the kind of things that maybe five years ago, people weren’t asking about in a a zero rate environment or, you know, with with the bull market and the the type of tailwinds we had on a macro basis. But increasingly, that’s becoming a competitive advantage. So we can offer a strong balance sheet, a quality over quantity strategy with a higher touch service model per you know, that resonates across all affiliation options, but that’s extremely unique on the independent side of the business. That that that really doesn’t exist on the independent side of the business.

And then doing it with the best of both worlds value proposition where we have this unique culture that, people that treat advisers and clients great and the capabilities, of the biggest firms in the industry. So we’re really excited about our positioning. The pipelines are growing. The interest in Raymond James is growing, not just on the independent side of the business, but across all of our affiliation options. Great.

Mike Cyprus, Equity Analyst, Morgan Stanley Research: Well, why don’t we leave it there? We’re just about out of time. Paul, thank you very much for joining us today. Please join me in thanking Paul Shukri. Thanks so much.

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