Release Date: April 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you help break down the seasonal factors that impacted this quarter's compensation expenses?
A: (Paul M. Shoukry, President & CFO) - The reset of payroll taxes and the increase in salaries typical for the first calendar quarter impacted compensation expenses by about $30 million to $35 million this quarter. The salary increases will continue throughout the year, but around two-thirds of the impact was related to the payroll tax reset, which will decline over the calendar year.
Q: What's pressuring the net new asset growth this year, and what are your expectations for the rest of the year?
A: (Paul Christopher Reilly, Chairman & CEO) - The trends indicate that the teams we're hiring are larger, bringing in more assets. There's a lag in asset transfer from newly recruited advisors, which takes about 9 to 12 months. We expect recruiting to continue strongly, and we aim to provide more transparency on the RIA movement and its impact on net new assets.
Q: Are you seeing signs of cash sweeps building or inflecting positively post-tax season?
A: (Paul M. Shoukry, President & CFO) - Post-tax season and record quarterly fee billing, cash sweep balances are down $1.3 billion, which is less than the impact from fee billings. We hope balances are stabilizing, and we'll continue monitoring this.
Q: With the final DOL rule now published, what are the implications for Raymond James and the industry?
A: (Paul Christopher Reilly, Chairman & CEO) - The rule seems manageable and not overly problematic. The industry's concern is more about whether the Department of Labor has the authority to oversee these accounts rather than the specifics of the rule itself.
Q: How are you addressing the competition in advisor recruitment and movements, particularly with the rise of private equity in the RIA space?
A: (Paul Christopher Reilly, Chairman & CEO) - The competition remains robust, with significant movement of large teams. Our focus is on providing a platform and culture that attracts and retains advisors, despite the competitive landscape.
Q: Can you discuss the outlook for loan growth and the factors influencing it?
A: (Paul M. Shoukry, President & CFO) - Loan growth has been tepid across the industry due to higher rates and companies being flush with cash. We are optimistic about future loan growth, maintaining strong capital and funding positions to support demand when it recovers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
