Asking about the sequential decline in PCG pretax yield despite seasonal factors, and the impact of interest rate reductions and recruiting costs.

Shoukry explained that year-over-year interest rate reductions negatively impacted PCG margins due to spread dynamics. He also noted increased recruiting costs, which are now broken out for transparency, and the firm's preference for one-by-one recruiting for cultural fit and adviser retention. “year-over-year, short-term rates are down, and so that obviously is a headwind to margins in the Private Client Group business because there's a spread dynamic there... We've also ramped up recruiting substantially year-over-year.”

Inquiring about the potential impact of agentic AI on transactional cash balances and whether the firm would consider evolving its monetization model, possibly with platform fees.

Shoukry stated that the industry has already seen a significant shift away from transactional cash balances due to rising rates and adviser guidance, making agentic AI less of an incremental threat for Raymond James compared to e-brokers. He emphasized the value of personal adviser relationships over AI bots for complex financial needs. He also stated the firm would be flexible to evolving pricing structures if industry dynamics and client preferences change. “without AI, you've seen that trend happen, and I don't think it requires AI for that cash to be invested in higher-yielding alternatives... I don't see it really impacting our space much more incrementally.”

Asking for details on the $1.1 billion tech spend, its priorities, and how the success of AI initiatives like the operational chatbot is gauged.

Shoukry explained that the majority of the $1.1 billion tech spend is focused on the Private Client Group, differentiating Raymond James from larger firms with broader tech needs. Success is gauged through guidance from the Technology Advisory Council (made up of financial advisers) and real-time feedback, leading to award-winning capabilities. “the $1.1 billion in technology spend, the vast majority of it is being focused on the Private Client Group business... all of the development of the technology is guided and directed by our Technology Advisory Council, which is made up of our financial advisers.”

RJF

Raymond James Financial (RJF) Q2 FY26 earnings call: guidance and Q&A

Q: Inquiring about the competitive landscape for adviser recruiting, especially regarding M&A-driven adviser movement and the firm's confidence in its pipeline.

Paul Shoukry expressed confidence based on high volume of home office visits and new commitments, noting an uptick in employee affiliation options. He highlighted the firm's consistent focus on being the best destination for advisers, matching culture with capabilities. He also commented on private equity's competitiveness and potential future catalysts if valuations shift. “our focus is just to remain the absolute best destination for financial advisers and their clients across all of our affiliation options. We call it adviser choice, and that's really what's driven the 7% annualized net new assets for the first half of our fiscal year, which is leading the industry.”

Earnings call· Mar 2026 (Q2 FY26)· Financials· Apr 22, 2026

Source: earnings call transcript

Executive summary

Raymond James Financial Q2 FY26 — Record Revenues and Strong Adviser Recruiting

Raymond James Financial delivered record Q2 FY26 revenues and pretax income, driven by strong adviser recruiting and robust loan growth, particularly in securities-based lending. Despite headwinds from lower interest-related revenues impacting PCG, the firm's diversified business model and strategic investments in technology and acquisitions position it for continued long-term growth, with a focus on personal relationships and adviser support.

Highlights

Record quarterly revenues of $3.86 billion, representing growth of 13% over the prior year quarter and 3% above the preceding quarter.
Pretax income of $735 million, increased 10% compared to the year ago quarter and 1% over the preceding quarter.
Domestic net new assets were $23 billion, representing a 5.8% annualized growth rate.
Recruited financial advisers with trailing 12-month production totaling $141 million and nearly $21 billion of client assets.
Bank loans ended the quarter at a record $54.8 billion, up 14% year-over-year and 3% sequentially, driven by securities-based lending growth of 31% year-over-year.

Concerns

Private Client Group pretax income declined 3% year-over-year, primarily due to the impact of interest rate reductions on non-compensable revenues.
Combined net interest income and RJBDP fees from third-party banks declined 3% from the prior quarter to $650 million.
Clients' domestic cash sweep and enhanced savings program balances ended the quarter at $57.8 billion, down 1% compared to the preceding quarter.

Guidance & targets

Category	Target	Timeline	Confidence
Asset management and related administrative fees	higher by approximately 1% medium materiality	Q3 · FY26	High
Aggregate Net Interest Income and RJBDP third-party fees	up approximately 1% medium materiality	Q3 · FY26	High
Effective tax rate	approximately 24% to 25% medium materiality	Fiscal 2026 · FY26	High
Non-compensation expenses	approximately $2.3 billion medium materiality	Fiscal Year · FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Private Client Group This performance was driven by higher PCG assets under administration compared to the previous year, resulting from the impacts of market appreciation, retention and the consistent addition of net new assets. Pretax income declined 3% year-over-year, primarily due to the impact on the segment of interest rate reductions over the past year, which reduced non-compensable revenues. Client assets under administration: $1.7 trillionClient assets under administration growth YoY: 15%Domestic net new assets: $23 billionAnnualized net new asset growth rate: 5.8%Recruited TTM production: $141 millionRecruited client assets: $21 billion	$2.81 billion	—	—	$416 million
Capital Markets Segment net revenues grew year-over-year and sequentially due to higher debt and equity underwriting revenues as well as higher M&A and advisory revenues.	$464 million	grew year-over-year	grew sequentially	$51 million
Asset Management Results were largely attributable to higher financial assets under management compared to the prior year quarter due to market appreciation over the 12-month period and strong net inflows into PCG fee-based accounts.	$327 million	—	—	$137 million
Bank Sequentially, the bank segment's net interest income increased marginally. Despite robust loan growth driven by securities-based lending, incremental interest revenues were nearly offset by the impact of 2 fewer interest earning days during the quarter and a full quarter impact of interest rate cuts during the prior quarter. Loans: $54.8 billionLoans growth YoY: 14%Loans growth QoQ: 3%Securities-based lending growth YoY: 31%Securities-based lending growth QoQ: 6%Securities-based loans as % of total loans: 42%Residential mortgages as % of total loans: 20%	$486 million	—	—	$166 million

RJF operating KPIs by quarter

RJF operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Mar 2025 Q2 FY25	Sep 2025 Q4 FY25	Dec 2025 Q1 FY26	This call Mar 2026 Q2 FY26	Jun 2026 Q3 FY26	Change vs prior quarter
Net new assets Domestic	$8.8B Quarterly domestic net new assets equaled $8.8 billion, representing a 2.6% annualized growth rate on the beginning of the period Domestic PCG assets. Source: earnings call transcript	<$18B Quarterly domestic net new assets were nearly $18 billion this quarter, representing a 5% annualized growth rate. Source: earnings call transcript	—	$23B In the fiscal second quarter, quarterly domestic net new assets were $23 billion, representing a 5.8% annualized growth rate. Source: earnings call transcript	$21.7B Domestic net new assets were $21.7 billion in the fiscal third quarter, representing a 5.5% annualized growth rate. Source: earnings call transcript	-5.7%
Net inflows Managed programs	~$3.7B Sequentially, although market values declined we had strong net inflows of approximately $3.7 billion into managed programs on our platform. Source: earnings call transcript	~$3.6B We had strong net inflows of approximately $3.6 billion or 7.3% annualized growth rate into managed programs on our platform. Source: earnings call transcript	—	—	—	—
Tier 1 leverage ratio	13.3% With a Tier 1 leverage ratio of 13.3% and total capital ratio of 24.8%, we remain well above regulatory requirements. Source: earnings call transcript	13.1% We ended the quarter with a Tier 1 leverage ratio of 13.1%. Source: earnings call transcript	12.7% We ended the quarter with a Tier 1 leverage ratio of 12.7%. Source: earnings call transcript	12.4% We ended the quarter with a Tier 1 leverage ratio of 12.4%. Source: earnings call transcript	11.7% We ended the quarter with a Tier 1 leverage ratio of 11.7%. Source: earnings call transcript	-0.7 pt
Total capital ratio	24.8% With a Tier 1 leverage ratio of 13.3% and total capital ratio of 24.8%, we remain well above regulatory requirements. Source: earnings call transcript	24.1% With a Tier 1 leverage ratio of 13.1% and a total capital ratio of 24.1%, we remain well above regulatory requirements with approximately $2.6 billion of excess capital capacity to deploy before reaching our targeted Tier 1 capital ratio of 10%. Source: earnings call transcript	24.3% With a Tier 1 leverage ratio of 12.7% and a total capital ratio of 24.3%, we remain well above regulatory requirements with approximately $2.4 billion of excess capital capacity to deploy before reaching our targeted Tier 1 capital ratio of 10%. Source: earnings call transcript	24% With a Tier 1 leverage ratio of 12.4% and a total capital ratio of 24%, we remain well above regulatory requirements with approximately $2.1 billion of excess capital capacity to deploy before reaching our conservative Tier 1 leverage ratio target of 10%. Source: earnings call transcript	22.5% With a Tier 1 leverage ratio of 11.7% and a total capital ratio of 22.5%, we remain well above regulatory requirements with approximately $1.5 billion of excess capital capacity to deploy before reaching our conservative Tier 1 leverage ratio target of 10%. Source: earnings call transcript	-1.5 pt

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline	Details
Proprietary AI operations agent ("Ray")	launch	rolled out to a few hundred advisers and their team so far in addition to service-focused groups at the home office

Deals & partnerships

GreensLedge acquisition

Acquisition closed towards the end of the quarter, enhancing Capital Markets capabilities.

Clark Capital acquisition

Acquisition expected to close this quarter (Q3 FY26).

Risks & headwinds

Challenging and volatile market environment Q2 FY26

null

Mitigation:Disciplined execution against objective of being the best firm for financial professionals and clients; diversified business model.

Interest rate reductions impacting non-compensable revenues in Private Client Group Past year (Q2 FY26 compared to prior year)

PCG pretax income declined 3% year-over-year.

Mitigation:Strong organic growth, ongoing technology and platform investments, and successful adviser recruiting.

Geopolitical issues, oil prices, and AI concerns in certain sectors (e.g., technology, software, fintech) creating volatility Ongoing (Q3 FY26 outlook)

null

Mitigation:Strong platform with expert bankers across various verticals; robust investment banking pipeline with motivated buyers and sellers.

Seasonal impact of client tax activity and record fee billings on cash balances April activity (Q3 FY26)

Domestic cash sweep and enhanced savings program balances declined due to collection of $1.9 billion in fee billings.

Mitigation:Anticipated and managed as a recurring seasonal factor; sweep balances have stabilized over several quarters outside of these impacts.

Q&A highlights

Inquiring about the competitive landscape for adviser recruiting, especially regarding M&A-driven adviser movement and the firm's confidence in its pipeline.

Paul Shoukry expressed confidence based on high volume of home office visits and new commitments, noting an uptick in employee affiliation options. He highlighted the firm's consistent focus on being the best destination for advisers, matching culture with capabilities. He also commented on private equity's competitiveness and potential future catalysts if valuations shift.

“our focus is just to remain the absolute best destination for financial advisers and their clients across all of our affiliation options. We call it adviser choice, and that's really what's driven the 7% annualized net new assets for the first half of our fiscal year, which is leading the industry.”

asked by Benjamin Budish · answered by Paul Shoukry

2 min read 6 chapters

Detailed narrative

Adviser Recruiting and Retention

Raymond James continues to attract and retain high-quality financial professionals, with strong recruiting momentum reflected in the second-highest quarterly results for recruited production and client assets. The firm emphasizes its unique combination of adviser and client-focused culture, leading technology, and strong balance sheet as key differentiators in a competitive environment.

Management noted an uptick in commitments from prospective advisers across all affiliation options, including the employee channel, driving a 7% annualized net new asset growth rate for the first half of the fiscal year.

Technology and AI Investments

The company is investing over $1.1 billion annually in technology, including automation, process improvement, and AI, primarily focused on the Private Client Group. A proprietary AI operations agent, 'Ray,' has been rolled out to a few hundred advisers and home office service groups, receiving strong initial feedback for providing curated natural language answers and guidance.

The firm aims to expand adviser and associate access over time, leveraging AI to create efficiencies and enhance client experience.

Capital Markets Momentum

The Capital Markets segment saw improved results, primarily from stronger investment banking revenues, with a particularly strong performance in March. The firm has a robust pipeline, driven by strategic investments and motivated buyers and sellers, and remains committed to opportunistic enhancements through strategic hiring or acquisitions like GreensLedge. Management expressed confidence in building on this momentum, despite geopolitical and sector-specific volatilities.

Bank Segment Growth and Credit Quality

The Bank segment achieved record loans of $54.8 billion, primarily due to outstanding growth in securities-based lending (SBL) balances, which increased over $5 billion or 31% year-over-year and 6% sequentially. SBL and residential mortgages represent 62% of total loans. The loan portfolio's credit quality remains strong, and SBL growth reflects a synergistic impact from the growing Private Client Group business, with growth almost identical between TriState's platform and the private client business.

Capital Management and Deployment

Raymond James maintains disciplined capital deployment strategies, including organic growth, technology investments, and recent acquisitions (GreensLedge closed, Clark Capital expected to close this quarter). The firm repurchased $400 million of common stock at an average price of $155 per share this quarter and has returned over $2 billion to common shareholders over the past 12 months, representing 94% of earnings.

The firm ended the quarter with a Tier 1 leverage ratio of 12.4% and $2.1 billion of excess capital capacity above its 10% target.

Cash Sweep and NII Dynamics

Domestic cash sweep and enhanced savings program balances stabilized over the last several quarters, ending at $57.8 billion, representing 3.7% of domestic PCG client assets. April activity saw declines due to record quarterly fee billings of $1.9 billion and seasonal tax activity.

The net interest margin in the bank segment remained stable at 2.81%, despite the impact of fewer interest-earning days and prior interest rate cuts, with the average yield on RJBDP balances decreasing 6 basis points to 2.7%.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.