A credit to savings

Interest rates were still at historically low levels when Raymond James started developing a high-yield savings program that offered clients an extraordinary amount of FDIC coverage. 

Some might call it prescient. We call it thinking long-term. 

More than a year later, after a succession of bank failures amid rising interest rates caused depositors to become increasingly concerned about bank liquidity, Raymond James retained a position of strength. 

“We recognized the tide had to change at some point. Our long-term view prepared us.”

This is how Chief Financial Officer Paul Shoukry describes the firm’s preparedness for one of the worst banking crises since 2007/2008. By putting the needs of clients first, the firm had already made remarkable strides toward launching a savings program that offered a competitive rate and up to $50 million in FDIC insurance coverage to each depositor through a trusted technology partner and a vast network of banks. 

As planned, the Enhanced Savings Program was an attractive opportunity for clients with qualifying cash, whetting the appetite for higher yields spurred by increased interest rates. And at a time of heightened market volatility, advisors were able to deepen relationships by offering a cash solution that supported their clients’ immediate needs as well as their long-term goals – cash held at the firm can be redeployed to other investments when the time is right. 

The program generated $13.6 billion in deposits from March through fiscal year end, with new assets representing the bulk of the deposits.   

(Pictured above: Davide Brocato, senior vice president, cash solutions; David Allen, senior vice president, technology; Amanda Stevens, executive vice president, chief operating and strategy officer, Raymond James Bank; Ja’Don Bridges, senior vice president, operations)

“We presented clients with a unique offering in the market that addressed three primary concerns: safety, liquidity and rate. As a result, we were also able to create a diversified source of funding for Raymond James Bank,” says Brocato. 

The firm continued to forgo the short-term gains that might come from holding a higher concentration of clients’ cash sweep balances at Raymond James Bank and instead chose to leverage the network of third-party banks that makes the increased FDIC coverage possible for clients. Because Raymond James owns a bank to support its wealth management business, not the other way around, the decision was driven by the firm’s commitment to putting clients first. 

“By prioritizing long-term thinking over immediate returns,” Shoukry says, “we’re in a position that’s best for the client, our advisors and for the firm.”

This article originally appeared in the 2023 Raymond James Annual Report.