Firing line  

How Raymond James is offering its radical employee plan

Scott says: “It was like operating in a frontier market, and in those years I had great adventures; we were the first ones allowed into the country to sell those products.

"But I left because there comes a time when one wants to plant his own trees, to hang his own pictures on his own walls. I didn’t want to be moved around like a corporate pawn. I learned a huge amount about the world in those years though.”

Of the future direction of Raymond James he says: “We want to grow the business. But I think everyone here is aware that if you grow too quickly, you get indigestion.

"All of the systems we have here are built for a bigger business than we have now. We are looking to benefit from economies of scale as everyone else is, we monitor head office cost per adviser, the cost of research has come down as you now get more for the same money, and the firm is now Mifid ready.”

But he says expansion is essential. This is because “while some costs might have come down, plenty of other costs, such as the [Financial Services Compensation Scheme] levy have risen, so if you are not expanding you are going backwards.”

Of his company's latest initiative, which involves offering advisers the chance to become Raymond James employees but also free to leave and to take their clients with them, he acknowledges the risks.

This includes the risk that advisers who are employees may not be motivated to grow their book of business in the same way as advisers who have more autonomy, something that would add cost for Raymond James without bringing in higher revenue. 

Scott acknowledges the risk of this but thinks such issues would be spotted in the due diligence process. 

He says: “There is always a risk that you get people who just want to farm the business they have, but I would like to think we can address that.

"I would also say, if people move to a new job, it's usually because they want something different to what they had before, there is an element of work we do to help firms grow.

"We do have some one-man-band offices, but mostly it is larger than that. It is certainly the case that we want entrepreneurial-type people, that is how we want to grow, and we know that won’t be right for every adviser out there.”