Two of the industry's biggest regional brokerage firms are reporting different recruiting outcomes this quarter, even as both acknowledge the same brutal competition for financial advisor talent, AdvisorHub reports.
Raymond James Financial is celebrating a banner quarter. According to AdvisorHub, over the past three months the firm recruited advisors who previously managed $156 million in annual revenue and $23 billion in client assets. That pace puts Raymond James on track for a record year, with $393 million in recruited revenue and $56 billion in recruited assets through the first nine months of its fiscal year. As AdvisorHub notes, the recruiting push helped drive the firm's Private Client Group to nearly $22 billion in net new assets, an 86 percent jump from roughly $12 billion a year earlier.
Ameriprise Financial tells a more cautious story, per AdvisorHub's reporting. CEO James Cracchiolo described the recruiting landscape as "highly irrational," language AdvisorHub points out he also used during last year's second-quarter earnings call. Ameriprise added 79 advisors this quarter, close to the 73 it added the year before, but the firm did not disclose asset or revenue figures for these new hires. Cracchiolo argued that many of today's recruiting packages go well beyond what he considers a sensible risk-return tradeoff, as reported by AdvisorHub.
Cracchiolo urged analysts to focus on long-term profitability rather than net new asset headlines when evaluating recruiting success, according to AdvisorHub. He questioned whether the high price firms are paying to lure experienced advisors will pay off, noting that net new assets only matter if they translate into consistent, healthy profit margins. Instead, he pointed to Ameriprise's organic growth among its roughly 10,000 advisors, who generated a record $1.2 million in average annual revenue per advisor, up 12% year-over-year.
Neither CEO named specific competitors, AdvisorHub observes, and both insisted they are winning recruits through culture and technology rather than the biggest paycheck. Still, Cracchiolo acknowledged that Ameriprise will sweeten its offers "for the right advisors and right situation," and both firms confirmed that recruiting costs are climbing across the industry.
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