Raymond James and Morgan Stanley both managed to expand their businesses in an otherwise tough second quarter, but the internal numbers show two very different strategies at work.
Raymond James boosted its AUM 2.8% over the quarter as it brought in a net 20 new U.S. advisors, but revenue for the firm's private client group was essentially flat, up under $400,000 to an aggregate $557 million.
With 5,093 advisors worldwide, that revenue stream translates into an annualized $437,000 in production -- down a bit from last quarter, when a brighter trading environment helped Raymond James' commission-driven reps book more income.
By comparison, Morgan Stanley dumped a net 162 advisors over the quarter as part of an ongoing campaign to, as the firm puts it, "prune underperformers."
But even with 1% fewer feet on the ground, the firm only lost a net $9 billion on the wealth management side, indicating that remaining reps are covering slightly bigger books: $96.8 million apiece, compared to $96.5 million last quarter.
They are also getting more efficient. As more Morgan clients shift into fee-based accounts, the typical rep now produces $785,000 a year versus $767,000 three months ago -- much less the $679,000 they were bringing own last year.