Raymond James reels in $104 billion of net new client assets in 2021

Continuing the spate of strong broker-dealer financial results kicking off 2022, Raymond James Financial Inc. said Wednesday that financial advisers in its private client group had recorded net new asset growth of $104 billion, or 11%, over the 12 months ending in December.

For comparison, Morgan Stanley, with 16,000 financial advisers, almost twice as many as Raymond James, reported last week it too had seen net new client assets growing at an annual rate of 11%. James Gorman, Morgan Stanley's chair and CEO, at the time dubbed the growth in new client money as "freakish."

Net new assets are the lifeblood of a brokerage firm and a strong metric of growth. And the broad stock market was roaring, which is always good news for financial advisers and their firms, which charge an annual fee on client assets in the neighborhood of 1%.

The S&P 500 repeatedly hit record highs throughout 2021 and ultimately posted a total annual return, including dividends, of 28.7% — almost twice its annual median return of 15.4%.

Like other firms, Raymond James also reported a series of new highs for the three months ending in December, including records for client assets under administration of $1.26 trillion and cash sweep balances of $73.5 billion.

Highs in cash sweep deposits could prove particularly fruitful to broker-dealers like Raymond James if the Federal Reserves raises short-term interest rates this year, as is widely expected.

"I can’t promise we’ll be able to sustain the 11% net new asset growth we achieved over the last 12 months or the phenomenal 14% annualized net new assets we experienced in the fiscal first quarter," Raymond James CEO Paul Reilly said on a conference call to discuss its earnings with analysts Thursday. "But given our strong retention and continued interest in all of our affiliation options, I’m optimistic we will continue delivering leading organic growth numbers."

Meanwhile, Raymond James reported a total of 8,464 financial advisers and registered reps across its varied business lines at the end of last year. That actually was a net decline of 18 compared to the September quarter and a net increase of 231, or 2.8%, compared to December 2020. The company pointed to financial adviser retirements as the biggest reason for the slight quarter-to-quarter decline.