Raymond James unveils new employment model to spur UK growth

Raymond James is today announcing the launch of a brand-new business model, available to wealth managers across the UK, in what is thought to be a first for the UK wealth management sector.

The new Employee Affiliation Model invites wealth managers to join the firm as employees, with all of the security and support that affords, while crucially retaining two important freedoms rarely offered elsewhere. This includes the freedom to build their own book of clients entirely free of restrictive covenants, and complete autonomy over their investment proposition and the tailored advice they offer to clients.

Both of these features have been a mainstay of Raymond James’ independent branch business model since the firm launched in the UK 20 years ago. The model became popular with entrepreneurially minded wealth managers who wanted autonomy over their investment decisions and to put their clients at the heart of their business.

Today’s launch marks the first time wealth managers will be able to do so as full employees, while still preserving the freedom to take clients with them should they ever choose to leave.

The unique model, which has proved increasingly successful for Raymond James in the US over the past 60 years, will be the fourth affiliation option available for wealth managers joining the business in the UK. The three other models are Independent Contracting, Professional Partner and the Investment Management Platform. In the first two models wealth managers are all commercially independent and own their own business, while in the third Raymond James provides an Investment Management Platform for firms

Anthony Scott, Head of Business Development at Raymond James said: “Every wealth manager joining us at Raymond James comes through the doors with their own vision of success for their clients, their teams and themselves, and our primary goal is to help them along the path to achieving those goals. That autonomy has always been a central part of our culture at Raymond James, which is why it’s so exciting to be able to offer it within the framework of a more traditional employment model. Employees will be able to manage their own clients and investments in the way that they choose, backed by one of the largest financial services firms in the world.

“Since we first launched in the UK 20 years ago, we have grown our market share year-on-year, and this is yet another sign of our ongoing commitment to the UK market. We hope this new model will provide another attractive avenue for wealth managers interested in joining one of the UK’s fastest growing investment management firms.”

The first employee utilising this model, which will be available to both new and existing Raymond James wealth managers, is Simon Monk, who opened a new branch at Ropemaker Place in London last year.

Simon Monk, wealth manager, said: “Initially one of the main attractions of Raymond James was the prospect of building my business whilst retaining client ownership and control in the way those clients are serviced and the bespoke manner in which their investments are managed. This offering is not diminished in any way as an employee of Raymond James – in fact it is reassuring to know that I have the backing of one of the world’s largest wealth management organisations with over $1tn of assets under management*.

Since joining Raymond James in 2020, I have been very impressed by the level of support I have received from all members of the company, where their focus is very much upon the client and enhancing their experiences, and this is the culture running throughout the firm. This culture and high levels of service make it a very compelling proposition for clients to entrust their investments to Raymond James.”

*stats correct as at end March 2021

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Black Monday

On 19 October 1987, the stock markets experienced a dramatic plunge that prompted many firms to shut down their trading desks and turn off their phones to minimize internal losses. Raymond James refused to do the same. Our desks stayed open to help meet clients’ needs, resulting in our first and only unprofitable quarter since the firm went public in 1983.

Who was Raymond James?

The Raymond in our name is actually from Edward Raymond, owner of a 15-employee mutual fund sales group, Raymond and Associates, along Florida’s west coast. He sold his company to Bob James on 15 July 1964, on condition that the surviving firm be called Raymond, James & Associates.

Three days after the sale, Ed Raymond was involved in a near-fatal automobile accident and never joined the firm.

Nonetheless, even after Raymond had passed away, Bob James insisted that his name remain on the door – ahead of James’ own. That was a promise he made to Ed Raymond three days before the accident, and Bob James was a man who kept his promises.

Bear Market of 1974

The severe bear market of 1974 threatened the existence of Raymond James, which was bleeding capital by the day. Tom James, his father and other leaders took extreme measures to keep the firm afloat, slashing costs, foregoing paychecks and even attempting to sell the firm for just enough capital to protect client assets and retain as many associates as possible. The story could have ended very differently if not for a sharp upturn and continued rebound in the stock markets late in the year.
This “fortunate near-death experience” (as Tom calls it) permanently marked his psyche, and has influenced our firm’s character and culture since, solidifying the conservative nature that emphasizes a determined focus on the long term – both for clients and the firm.

Taking Raymond James Public

When consideration was being given to taking Raymond James public, Tom James penned a letter to shareholders (largely employees at the time).
He wrote:

” … the public offering should be considered as a statement of our independence. While this is a psychological rather than an economic rationale, it is nonetheless very important. We have asserted for some time that we are not interested in becoming a small part of a very large corporation. That assertion results mainly from the inclinations of management rather than the economic benefits associated with either alternative. The public stock offering affords us the opportunity to enjoy a little bit of the best of both worlds. While shareholders will be given liquidity at fair market value, we will still have the ability to control our own destiny.”

After 40+ years of Tom’s leadership, upon becoming CEO, Paul Reilly was often questioned about whether the company might ultimately surrender its cherished independence and be acquired by some larger entity. His response: “Not while I’m around.” It’s a theme that continues today.