A new term – Hybrid Advisor – was coined for Raymond James associates who have over $100 million in discretionary client assets under management (AUM).
This is because they now will receive a higher percentage of fees and commissions on certain products starting in 2013.
This was announced in March and was to take effect the following month.
How the New Plan Works
Scott Curtis, president of the independent broker-dealer division of Raymond James Financial Services identified a definite potential for growth under their new compensation plan.
In essence, the advisers would be getting 100% of the advisory fees plus commission certain financial products. At the same time, they will be paying a fee to the company on a quarterly basis, the fee is dependent on the amount of discretionary assets managed by them.
Transparency as the Goal
Transparency seems to be the goal here, not just for the well-being of the advisors but also for the company. This new payment plan will attract high performing FA’s from competing firms which will ultimately increase revenue for the firm.
Also, with high-end advisors often seeking independence upon reaching the $100 million margin of discretionary assets, the move by Raymond James ensures that the skill remains within their side of the net.
Not all financial advisors would be eligible for this new compensation plan. There’s only a very small amount in the initial 2013 release however, no specific figure was given by the firm.
Reduced Fees for Investors as Well
To top it off, the firm would be doing away with their “12b-1” trailing commissions. This is essentially the amount received from mutual funds and will lower the costs of portfolio management for the client.
Raymond James 2013 compensation plan encourages top advisors to work hard and maintain client quality while remaining loyal to the company. The hybrid plan seems to work and continues to this day, keeping both client and financial advisors satisfied.