Financial Data and Key Metrics Changes - The firm reported record net revenues of $3.7 billion for the fiscal first quarter, with net income available to common shareholders at $562 million and earnings per diluted share of $2.79 [13] - Adjusted net income available to common shareholders was $577 million, resulting in adjusted earnings per diluted share of $2.86, with a pre-tax margin of 19.5% and an adjusted pre-tax margin of 20% [13] - The annualized return on common equity was 18%, and the annualized adjusted return on tangible common equity was 21.4% [13] Business Line Data and Key Metrics Changes - The Private Client Group generated pre-tax income of $439 million on record quarterly net revenues of $2.77 billion, driven by higher assets under administration [14] - The Capital Markets segment generated quarterly net revenues of $380 million and a pre-tax income of $9 million, with revenues declining year-over-year and sequentially [14] - The Asset Management segment achieved record pre-tax income of $143 million on record net revenues of $326 million, attributed to higher financial assets under management and strong net inflows [15] - The Bank segment generated net revenues of $487 million and record pre-tax income of $173 million, with net interest income growing 6% sequentially [15] Market Data and Key Metrics Changes - The firm ended the quarter with total assets of $88.8 billion, a 1% sequential increase, primarily due to loan growth [22] - Record bank loans reached $53.4 billion, reflecting a 13% year-over-year growth and a 4% sequential increase [22] - Clients' domestic cash sweep and Enhanced Savings Program balances ended the quarter at $58.1 billion, up 3% over the preceding quarter [17] Company Strategy and Development Direction - The company is focused on long-term capital deployment, with investments in technology and platform enhancements, including a newly launched AI operations agent named Rai [7][8] - The firm announced the acquisition of Clark Capital Management and GreensLedge, emphasizing cultural and strategic fit in its M&A strategy [11][66] - The company aims to maintain a strong balance sheet and liquidity while pursuing both organic and inorganic growth opportunities [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing a robust advisor recruiting pipeline and strong commitments to join in the coming quarters [7] - The company acknowledged headwinds from lower interest rates and seasonal impacts typical in the second fiscal quarter but remains focused on generating long-term sustainable growth [26] - Management highlighted the importance of personal relationships and a strong culture in attracting and retaining financial advisors amid increasing competition [42] Other Important Information - The firm returned $511 million of capital to shareholders during the quarter through dividends and share repurchases, maintaining a long-term commitment to capital management [24] - The effective tax rate for the quarter was 22.7%, with an estimated effective tax rate for fiscal 2026 expected to be around 24%-25% [23] Q&A Session Summary Question: On net new assets and areas of strength - Management noted $31 billion of net new assets in the quarter, the second-best quarter ever, with robust recruiting activity across various affiliation options [30][31] Question: On sustainability of net new assets growth - Management expressed confidence in sustaining growth based on strong retention and recruiting results, despite competitive pressures [51] Question: On capital markets outlook and revenue growth - Management indicated a strong pipeline in capital markets, with expectations for revenue improvement above the current quarter's $380 million level [58] Question: On M&A results and advisory performance - Management acknowledged challenges in comparing results with peers but emphasized long-term growth trends in investment banking [77][79] Question: On non-compensation expenses and technology investments - Management confirmed ongoing investments in technology as a key driver of non-compensation expenses, balancing growth with cost management [82]

Core Insights - Raymond James has launched a proprietary digital AI operations agent named Rai, which utilizes natural language processing and generative AI to provide curated answers and guidance for operational questions [1][2] - The implementation of Rai is part of a broader strategy to enhance service models and maintain personal relationships within the firm, with plans for an enterprise-wide rollout following a successful pilot [2][3] AI Strategy and Investment - The company is committed to a multi-year investment in AI tools, with an annual budget of $1.1 billion dedicated to technology advancements that foster innovation and solutions across the enterprise [4] - Rai is designed to learn from user interactions, providing a personalized experience while ensuring human oversight in decision-making processes [2][3] AI Utilization and Development - There are over 10,000 regular users of conversational AI within the firm, indicating high associate utilization rates [3] - The development team is generating approximately 3.2 million lines of code monthly under AI supervision, showcasing the scale of AI integration in the company's operations [3] Additional AI Tools - Recent enhancements include a CRM AI note assistant for optimizing note-taking and identifying action items, Zoom AI meeting summaries for tracking activities, and generative AI search capabilities for improved internal knowledge database queries [6]

Are you ready to hand over control of your portfolio to artificial intelligence? Fahad Hassan, cofounder and CEO of AI-powered wealth management platform Range, thinks you should seriously consider it. Most Read from Fast Company Hassan’s five-year-old company is introducing “Rai,” a new proprietary AI wealth advisor that, he believes, will give a huge swath of American households access to the sophisticated advice and planning that was traditionally only accessible to those with sky-high net worths. “R ...