Raymond James Financial is an American diversified holding company providing financial services to individuals, corporations and municipalities through its subsidiary companies that engage primarily in investment and financial planning, in addition to investment banking and asset management.
History
Raymond James was founded in 1962 when St. Petersburg broker Robert James formed Robert A. James Investments. In 1964, it merged with Raymond & Associates, founded by Edward Raymond in 1963, to form Raymond James & Associates. Robert James' son, Tom James, joined his father's company in 1966 and assumed leadership of the firm in 1970. The firm initially planned to go public in 1969, but market conditions delayed its plan until 1983. Tom turned over the CEO's post to Paul Riley in 2010, but still serves as executive chairman.
In 2012, the firm purchased the Canadian assets of Allied Irish Bank. In April 2012, Raymond James merged with Morgan Keegan & Company. The merger created one of the country's largest full-service wealth management and investment banking firms not headquartered in New York.
In January 2013, the firm reported 100 consecutive quarters of profitability.
As of June 2015, Raymond James has more than 6,500 financial advisors serving nearly 2.7 million client accounts in more than 2,600 locations throughout the United States, Canada and overseas. Total client assets under management are approximately $500 billion. Raymond James corporate headquarters is located in St. Petersburg, Florida.
In June 2016, it was announced that Raymond James had joined the Fortune 500 for the first time.
Activities
Raymond James Financial has three wholly owned broker-dealers, Raymond James & Associates (RJ&A), Raymond James Financial Services (RJFS) and Raymond James Limited (RJL); and Raymond James Investment Services Limited (RJIS), a majority-owned independent contractor subsidiary in the United Kingdom. Through Eagle Asset Management, the firm manages $56 billion in assets mostly for institutions, as of October 2013.
Controversies
Auction rate securities
On June 29, 2011, Raymond James announced an agreement to repurchase at par auction rate securities (ARS) sold to clients through its domestic broker/dealer subsidiaries prior to February 13, 2008. The agreementâ€"reached with the Securities and Exchange Commission and with state securities regulators led by Florida and Texasâ€"resolved more than three years of investigation related to activity in the ARS market. Without admitting or denying the allegations, the firm also agreed to pay a fine totaling $1.75 million to the state regulators, but was not fined by the SEC.
As a result of this agreement, a pre-tax charge of $45 million was recorded in the quarter ending June 30, 2011. This charge was a result of an estimate of the current fair value of the securities to be repurchased by the company being less than their par value. It is expected that the ultimate realized loss will be substantially less as issuers refinance or redeem these securities, interest rates rise and/or collateral values improve.
Raymond James sold $2.3 billion worth of ARS, underwrote $1.2 billion, and was the auction dealer for over $725 million. Since the $330 billion market for ARS crashed in 2008, at least 19 underwriters and broker-dealers were sued in class action suits.
Excessive commissions
In September 2011, the Financial Industry Regulatory Authority ordered Raymond James & Associates, Inc. (RJA) and Raymond James Financial Services, Inc. (RJFS) to pay restitution of $1.69 million to 15,500 clients for charging excessive commissions on more than 27,000 securities transactions. The trades were made in client accounts between 2006 and 2010. FINRA also fined RJA $225,000 and RJFS $200,000.
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