Raymond James (RJF) Q1 2026: Net New Asset Growth Hits $31B as Recruiting Momentum Drives Platform Expansion
Raymond James delivered an 8% annualized net new asset growth rate in Q1, fueled by robust advisor recruiting and strategic investments in technology and platform breadth. While capital markets revenue faced tough comps, the firm’s diversified model and organic growth focus enabled record client assets and steady margin performance. Management’s capital deployment remains balanced across organic initiatives, targeted M&A, and disciplined buybacks, positioning RJF to navigate competitive intensity and evolving market cycles.
Summary
- Advisor Recruiting Momentum: Sustained inflows and high retention reinforce the firm’s differentiated advisor-centric model.
- Capital Markets Volatility: Lower M&A and underwriting revenue underscore the importance of platform diversification.
- Technology and AI Investment: Strategic tech spend and AI deployment aim to drive future advisor productivity and cost leverage.
Performance Analysis
Raymond James reported record quarterly net revenues, supported by a surge in net new client assets and continued expansion of its Private Client Group (PCG), which now stands at a record $1.71 trillion in client assets under administration. The 8% annualized net new asset growth, totaling nearly $31 billion, was broad-based, with a notable tilt toward the independent contractor channel and reinforced by high advisor retention. Recruiting brought in advisors with trailing 12-month production of $96 million and $13 billion in client assets, reflecting a strong pipeline and a focus on quality over quantity.
Despite a 3% YoY decline in pre-tax income, the firm maintained stable margins and grew asset management and administrative fees by 15% YoY, with record fee-based assets up 19%. The bank segment also posted record loan balances, driven by a 28% YoY increase in securities-based lending. Capital markets, however, saw revenue and pre-tax income decline due to lower M&A and debt underwriting activity, highlighting the cyclical nature of this business line. Non-compensation costs rose 8% YoY, largely due to technology investments and recruiting-related expenses.
- Organic Growth Engine: Recruiting and retention are translating into sustained net new asset flows and higher AUM, especially in fee-based accounts.
- Margin Resilience: Adjusted pre-tax margin held at 20% despite interest rate and investment banking headwinds.
- Loan Book Expansion: Securities-based lending growth provided a counterbalance to lower deposit yields as rates declined.
Overall, Raymond James’ diversified platform and focus on advisor experience continue to deliver steady growth, even as capital markets results fluctuate and competitive pressures persist.
Executive Commentary
"Our focus on being the absolute best firm for financial professionals and their clients has contributed to strong results this quarter. The strength and consistency of our client-first culture, alongside a robust technology and products platform, coupled with our strong balance sheet, continues to appeal to financial advisors. This is reflected in our solid recruiting momentum and net new asset annualized growth of 8% this quarter."
Paul Shukri, Chief Executive Officer
"We generated annualized return on common equity of 18%, and annualized adjusted return on tangible common equity of 21.4%. Solid results for the quarter, particularly given our conservative capital base."
Butch Orlog, Chief Financial Officer
Strategic Positioning
1. Advisor-Centric Platform and Recruiting Strength
Raymond James’ advisor-focused culture and platform breadth remain central to its growth strategy. The firm’s ability to attract and retain high-quality advisors—supported by a $1.1 billion technology investment and a service-first ethos—continues to differentiate it from both wirehouses and private equity-backed roll-ups. The focus on long-term relationships and independence, rather than transactional incentives, is seen as a key draw for advisors seeking stability and client ownership.
2. Technology and AI-Driven Productivity
Ongoing investments in technology and AI, such as the launch of Ray, a proprietary AI operations agent, are designed to streamline advisor workflows, improve client service, and enhance platform scalability. Management highlighted that over 10,000 associates already use AI tools, with early signs of efficiency gains. This tech focus is intended to future-proof the model and deliver operating leverage as adoption deepens.
3. Diversified Business Model Mitigates Cyclicality
The firm’s multi-segment structure—spanning wealth management, asset management, banking, and capital markets—provides resilience against market-driven volatility. While capital markets revenue was pressured by lower M&A and underwriting, strong fee-based asset growth and lending expansion in other segments buffered overall performance. This diversification enables consistent margin delivery and capital return even in choppy market environments.
4. Disciplined Capital Deployment and Selective M&A
Capital allocation remains balanced between organic investments, targeted acquisitions, and shareholder returns. Recent deals, including Clark Capital and Greensledge, reflect a disciplined approach focused on cultural fit, strategic alignment, and attractive valuations. Share repurchases and the redemption of preferred equity further underline management’s intent to optimize capital structure while preserving flexibility for future opportunities.
Key Considerations
The quarter underscores Raymond James’ commitment to organic growth, advisor satisfaction, and platform investment, even as it faces cyclical and competitive headwinds in certain business lines.
Key Considerations:
- Advisor Retention and Recruiting Pipeline: Continued strength in recruiting and high satisfaction scores point to sustainable net new asset flows.
- Capital Markets Sensitivity: Revenue from M&A and underwriting remains volatile, requiring ongoing investment in talent and sector coverage to capture cyclical upswings.
- Technology Spend as Differentiator: Scale in tech and AI investment is increasingly a competitive moat versus smaller or less-resourced rivals.
- Deposit Mix and Rate Environment: Declining demand for enhanced savings products as rates fall may pressure deposit margins, but loan growth and diversified funding sources help offset this trend.
- Expense Discipline vs. Growth: Management’s willingness to invest in growth (tech, recruiting) is balanced by a commitment to operating leverage and cost control over time.
Risks
Raymond James faces ongoing risks from heightened competition for advisor talent, especially from private equity-backed platforms offering aggressive incentives. Interest rate volatility and capital markets cyclicality could pressure margins and revenue mix, while elevated tech and recruiting spend may challenge near-term cost discipline. Regulatory changes, macroeconomic downturns, and integration risks from M&A also warrant monitoring, as noted in management’s forward-looking statements and risk disclosures.
Forward Outlook
For Q2 2026, Raymond James guided to:
- Asset management and administrative fees expected to rise ~1% sequentially, reflecting higher PCG fee-based assets but offset by two fewer billing days.
- Combined net interest income and RJBDP fees from third-party banks projected to decline ~3% sequentially, mainly due to fewer interest-earning days and the full impact of recent Fed rate cuts.
For full-year 2026, management maintained guidance:
- Non-compensation expenses (excluding certain items) to grow ~8% YoY, primarily due to ongoing tech investment and recruiting costs.
Management highlighted several factors that will shape results:
- Continued focus on advisor recruiting and retention as the top capital deployment priority.
- Expectation for capital markets revenue to improve meaningfully above Q1 levels, given a robust deal pipeline.
Takeaways
Raymond James’ Q1 results reinforce its advisor-led, technology-forward strategy as a sustainable growth engine, even as market-driven segments ebb and flow.
- Advisor Platform Scale: Net new asset growth and recruiting momentum validate the firm’s differentiated value proposition and should continue to drive long-term AUM expansion.
- Capital Markets Volatility: Near-term softness in M&A and underwriting highlights the need for ongoing investment in coverage and talent to capture cyclical rebounds.
- AI and Tech Leverage: Early AI adoption and platform investments are poised to deliver future efficiency gains and margin upside as usage scales.
Conclusion
Raymond James enters 2026 with record client assets, robust recruiting pipelines, and a balanced approach to capital deployment. While capital markets headwinds and competition for advisor talent persist, the firm’s diversified model and tech investments position it for continued growth and margin stability.
Industry Read-Through
Raymond James’ results highlight intensifying competition for advisor talent across wealth management, with private equity-backed roll-ups and wirehouses all vying for share. Scale in technology and platform breadth is emerging as a key differentiator, making it increasingly difficult for smaller or less-resourced firms to compete for high-quality advisors. The shift in deposit mix and client reinvestment activity as rates fall is a trend to watch for all diversified financials, while the cyclical nature of capital markets revenue underscores the value of business mix diversification across the sector.