- Title: President, Private client group
- Time in Current Position: 2 years
- Time wiith Firm: 20 years
- Previous Employer/Title: Raymond James
- Years in the Industry: 20
- First Job in Industry: Trainee Advisor/cold caller
- Alma Mater: BA, emory university
What do you think is the industry's biggest challenge?
TASH ELWYN: For the past five-plus years, the industry has certainly grasped the challenge of the aging demographics of the client base. But the challenge now is the demographic challenge related to the advisor population. In several large markets, as an example, well over 50% of our revenue in those markets is coming from advisors over the age of 60. Many of our competitors have embraced a strategy in which the succession-planning documents that they have created to help a retiring advisor monetize some sort of equity in this business, and have an earn-out over a period of years, are written in such a way that in most cases, the successor FA is signing to an agreement that will trump Protocol. Protocol, as an agreement between Protocol member firms, is effective so long as there's not a superseding agreement that an FA has voluntarily signed. A team agreement, for example, would trump Protocol. A personal thesis that I have is that over the next five to 10 years, as you begin to see this massive transition of business from the retiring generation of advisors to the next generation of advisors, that next generation of advisors will knowingly, or unknowingly, be signatories to an agreement to a succession plan that will forever preclude their choosing to conduct that business elsewhere.
These new advisors are essentially captives?
TE: So if bigger firms are already... I'll call it tweaking advisor compensation, as they do year after year, and the tweaks are rarely up, how significant do the tweaks become once advisors become captive as a result of this transfer of business from the retiring generation to the successor generation? And I think as these businesses transition, and these advisors become even more captive than they are today, I think that payouts elsewhere in the profession are going to decline to either look like lower institutional payouts, or perhaps even a salary and bonus model like what exists in Europe. I also think the language being inserted into these succession-planning agreements elsewhere is a leading indicator of what's to come. The next five to 10 years will prove whether my thesis holds water, but that's my belief. At Raymond James, we believe in total choice, so if an advisor thinks he can serve his clients better elsewhere, not only is he free to take his clients with them, but we are blocked from actively soliciting those clients for 60 days. We don't need to put up a Berlin Wall to keep our advisors in.
Does Raymond James have a preferred mix of fee-based to transactional revenue?
TE: There is absolutely a growth trend within the fee-based side of the business, as there has been for many years within Raymond James. But we continue to be agnostic and equally supportive of advisors continuing to determine the most appropriate and effective way to price and manage their business. The trend exists at Raymond James, but it is a trend that is the result of advisors individually making choices bottom up, rather than any sort of a top-down mandate or directive as might exist elsewhere.
Some say that the fee-based revenue model will slow growth of AUM because advisors get lazy when they're not actively marketing and selling. What do you think about that?
TE: I think it's an interesting observation. We do a lot of analysis internally, and a trend that we've identified is that as we recruit experienced advisors from elsewhere in the industry, an advisor who has a more traditional commissioned-based business model is more likely to deliver more of his business to us when he moves than an advisor who is more fee-based. But that plateauing may be more the result of demographics. The fact that there are so many advisors, regardless of business model, who are at a late stage in their career means they may be more focused on maintenance of the business than growth of the business. That may be a factor as well.
How is Raymond James doing in its efforts to recruit and retain women?
TE: Twelve percent of our advisors are women. Many other firms count their registered associates when they calculate their women-advisor numbers, and if you back those associates out, the industry average is around 7% or 8%. Roughly one-third of our new trainees are women. We continue to invest heavily in the retention, support and recruitment of women advisors. One of the premier events within the entirety of the private client group is our Women Advisor's Symposium that happens each fall. We also have a Women's Advisory Council that I work closely with. We're developing a pilot program in which we identify female registered associates, and even non-registered associates, whom we believe would be good candidates for our Advisor Mastery Program, which is part of our new FA training program. Once word gets out that this is a great career path for women, our numbers will rise organically.
As a current, active financial advisor, and as someone who is responsible for managing and overseeing the recruitment of advisors, what would you say is the most crucial quality for an advisor to possess?
TE: I steadfastly believe the most critical quality to success as an advisor is integrity. No more complicated than that. It's integrity.
What do you like best about being an advisor?
TE: What I enjoy best about being an advisor, and best about seeing what our advisors do, is that opportunity we have to make a difference in people's lives. It's both an opportunity, as well as a tremendous responsibility, and it's what gets me out of bed in the morning.
- Number of Employee Channel Advisors:2,157
- Total AUM: $169 billion
- Average Employee Advisor 12-Month Trailing Production (excludes trainees, new hires): $556,000
- Average Employee Advisor AUM (excludes trainees, new hires): $83.1 million
- % Women Advisors (Not including registered associates): 12%
- % Minority Advisors: Not provided