September 26, 2019
Raymond James Financial is again reassuring brokers that its “robo” investment product will enhance, not compete with, their business.
Raymond James began rolling out its “Connected Advisor” platform that has an algorithm-driven investment option in 2017. The suite of technology tools, which also includes rebalancing and other client-account management applications, is still in the pilot stage.
“We’re doubling down on investing in, and reaffirming, the human advisor as the center of the relationship,” Tash Elwyn, president and CEO of Raymond James & Associates, the Florida-based company’s employee broker channel, said Wednesday at a panel discussion sponsored by the St. Petersburg Area Economic Development Corp.
Advisors at Raymond James and other full-service brokerage firms have had a tenuous relationship with robo services. The firms are pitching them internally as ways to free up their time by directing younger prospects, including children of clients, to auto-investing.
The companies are not marketing the robos directly to retail investors, unlike robo pioneers such as Wealthfront and Betterment.
“We have been piloting Connected Advisor, which is a platform by which advisors can onboard smaller clients and leverage the firm’s model solutions particularly for next-gen clients,” Elwyn said at the New York City event. “That is delivered through the financial advisor and it is not direct-to-client.”
A spokesperson for Raymond James did not return a request for comment on how many of the firm’s 7,900 independent and employee-channel advisors are using the robo service, compensation they receive, or when it will be fully deployed.
When Morgan Stanley introduced its 35-basis point Access Investing robo platform in December 2017, Chief Digital Officer Naureen Hassan marketed it as “an opportunity for financial advisors to grow their book of business by making connections with prospects earlier and eventually establishing full service relationships when clients are ready.” It also gives brokers referral fees for directing investors to the robo unit.
UBS Wealth Management USA and Wells Fargo Advisors are white-labeling their platforms for up-and-coming clients through SigFig Wealth Management, a robo service that UBS has invested in.
Merrill Lynch encourages advisors to refer lower-tier prospects and customers to Bank of America’s Merrill Edge unit, which includes a robo service. (Merrill is reviewing brokers’ advisory accounts to ensure that customers using home-office managed portfolios available for less than half the price at Edge are receiving services justifying the higher fees.)
Raymond James is particularly sensitive to the issue of disintermediating its 7,900 brokers, about 41% of whom are employees and the rest independent contractors. The firm promotes its broker-centric “culture” in recruiting pitches, focusing on channel choice and broker “ownership” of clients to differentiate itself from wirehouse competitors.
Elwyn said the firm continues to aggressively recruit, but echoed Raymond James CEO Paul Reilly’s observation earlier this year that recruiting is likely to slow down from the record levels of 2018.
“Industry-wide, it appears that fewer advisors have been changing firms in the last 12 months,” Elwyn said. “Raymond James’ share of that movement continues to be every bit as strong, if not arguably stronger.”
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