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Raymond James Financial's Profits Balloon 46%

NASHVILLE, Tenn. – Raymond James Financial's profits soared 46% on the back of strong growth from the firm's private client group.

The regional broker-dealer's profits hit a record $122.7 million for the third quarter, up from $83 million for the same period a year ago. Diluted earnings-per-share for the quarter rose to 85 cents from 59 cents.

Raymond James' private client group, which includes both employee and independent channels, posted record pre-tax profits of $81 million, up from $58 million, a 39% increase.

The group's net revenues climbed 10%, rising to $816 million from $742 million. Assets under management grew 17%, reaching a record high of $454 billion. Assets in fee-based accounts ballooned 27.5%, increasing to $168 billion from $131 billion.

Advisor headcount grew to 6,251 for the quarter from 6,202 from the previous quarter. Raymond James & Associates, the firm's employee-channel, expanded its advisor ranks to 2,452 from 2,438. Raymond James Financial Services, the firm's independent channel, grew its headcount to 3,320 from 3,288.

"The profitability of Raymond James is reflected in your efforts to grow your businesses," Tash Elwyn, president of Raymond James & Associates, told the firm's employee-channel advisors at a conference in Nashville, Tenn., prior to the earnings release.

Elwyn also noted that this year is shaping up to be one of the best for recruiting.

"It's a lot more fun to be part of a winning team," he said. "By being part of a winning team, Raymond James has the ability to continue to make the investments to give the support you need to help your clients and grow your business."

Companywide revenues rose 9%, hitting a record high of $1.2 billion for the quarter, up from $1.1 billion for the year-ago period. Expenses rose less quickly at 6%, increasing to $1 billion from $980 million. Of the firm's costs, compensation, commissions and benefits were the largest at $825 million, up from $772 million, a 7% increase.

At the conference, Elwyn sought to allay fears that the regional firm's rapid growth could change its culture.

"It is our culture that makes us so unique and different today. It's imperative that while Raymond James continues to grow we stay small," Elwyn said.

He said the firm's leadership understood the importance of being available to Raymond James advisors. Elwyn recounted that he took a break from moving into a new home during the holidays to take a phone call from a Raymond James financial advisor who had a concern that he wanted addressed.

"I take those calls. Your branch managers take those calls. Your regional managers take those calls. We all take those phone calls because this is a relationship business. We take and embrace that you are our clients," Elwyn said.

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