Posted: March 24th, 2023

Raymond James Financial Inc. Case Study

Company Overview

Raymond James Financial Inc. was established in 1962. By 1973, the firm had owned a seat in the New York Stock Exchange (NYSE). The organization became a listed company first on NASDAQ in 1983 and then on the NYSE in 1985 (University of Tampa 1). In 2018, Raymond James Financial Inc. was reported to be the largest company in the financial services industry.

The Client’s Current strategy

Raymond James Financial Inc. concentrates on four operational areas namely: Private Client Group, Capital Markets, Asset Management, and Raymond James Bank (University of Tampa 1). In this analysis, focus will be on the Private Client Group business segment, which generates the highest percentage of the company’s revenue. In recognition of the anticipated shortage of employee advisors, Raymond James Financial developed a three-prong strategy to remedy the situation. The first approach involved the establishment of the Advisor Mastery Program (AMP), a 24-month training program to aid new advisors in passing the industry’s and company’s licensing requirements (University of Tampa 5). The provision also offers employees other opportunities such as learning the dynamics of the organizational culture and processes, which subsequently enables them to adjust their careers accordingly.

The second prong is based on establishment of an advisory services department tasked with assisting advisors as they progress in their careers. The third one is an explicit company policy in favor of diversity. Perfect examples of achievements of this policy include the creation of a Women’s Network of advisors as well as one for the African American community. These three measures indicate the firm’s commitment to aligning strategy mission and goals.

Firm’s Mission and Goals

The organization’s mission is to enhance the financial well-being of clients through providing services based on integrity, frequent and explicit communication, as well as offering superior products and services. Regarding its human resources, the mission includes promoting cooperation among employees, creating a nurturing environment that supports personal growth and job satisfaction, and ongoing employee through training and education. Therefore, these statements function as a beam that illuminates the company’s decision-making.

The Strategic Direction towards which the Company is Heading

Raymond James Financial Inc. is interested in defending its high-ranking performance in the industry. Therefore, to achieve this goal, the company has been notably proactive in reformulating and reorganizing its strategy to respond to the dynamic needs of the industry. In terms of the workforce, the financial firm has demonstrated an understanding of the changing participants driven by the impacts of generational differences on the financial sector. In response, the firm has devised strategies to seamlessly adjust to the expected shifts in the workforce such as targeting millennial to fill the gap left by retiring baby boomers. However, the organization is not entirely satisfied with the current efforts and seeks to intensify actions aimed at recruiting more employees to the organization’s portfolio of financial advisors.

Consistency of Strategy with Company Mission and Objectives

The rapid progress made by the business is that the prevailing strategy is indeed working in propelling the enterprise towards meeting its objectives. The growth trend remained consistent in the 90s and 2000s with some of the most remarkable achievements being the establishment of the Raymond James Bank in 1994 and becoming the 2011 leading company in the SmartMoney annual ranking of full-service brokerage firms. Raymond James is also top-rated for both independent consultants and employee advisors according to the most recent rankings. The firm’s customer service scores are also ahead of its competitors. Future projections still confirm a growth trajectory should the company continue with the current strategy.

Three Critical Issues Facing Raymond James Financial Inc.

Firstly, the firm has inadequate strategy of recruiting and retaining young investors. Reports have indicated a declining interest to invest in stocks among the younger generation, which is a significant concern for Raymond James since the move means contending with a diminishing clientele base.

Secondly, stiff competition from large and well-known firms that control a significantly high percentage of the market is a major threat to Raymond James’ bottom line.

Thirdly, the industry trends that encourage embracing web-based automated advisors, who offering financial assistance at significantly lower rates than traditional advisors is a looming threat if the company fail to employ a timely response.

Strategy to Raise Awareness, Recruit New Employees, and Identify Promising Candidates among the Millennial Generation

Encouraging the young generation to buy stocks

Increasing awareness among the millennial generation should become a priority since this is a segment with profound promise if the right product and approach is devised. For instance, the rate of stock ownership among individuals below 35years is on a decline from 56% in 2006 to only 37% in the current year. The decline and persistent hesitancy of the younger generation to invest in stocks is a result of non-performing money market in 2008 and the resulting global financial meltdown in its wake.

As observed in Raymond James Financial case study, the profound generational changes expected in future require a strategic response. The case study explains that as the baby boomers of the 1960s continue to age, they will be passing over $30 billion of their wealth to their heirs, the millennials and generation Y (University of Tampa 3). Raymond James should be at the forefront in figuring out ways of encouraging the generation to reinvest their inheritance into the financial market.

Attracting a younger generation of investors will require a deep understanding of the issues and challenges faced by millennials that impact their financial decision-making. It is only through such awareness that the firm can create relevant products and services that are guaranteed to capture the interest of the generation and encourage it to increase participation in the financial market.

Recruit more millennial as a strategy for appealing to the younger generation

The aging of baby boomers is not only anticipated to create upheavals in the placement of wealth as their heirs take control but also their exit from the industry is expected to generate considerable shortages of labor in many sectors (University of Tampa 3). Therefore, the financial sector will not be spared, and it is in the best interest of Raymond James Financial to devise a strategy of attracting millennial into its workforce.

Since generational differences are projected to become more pronounced and critical to a company’s success, investing in avenues specifically targeting each generational segment has become more urgent. Hiring more millennials is one such avenue that holds the potential to attract more younger investors. Traditionally, individuals under 35 years are used to getting financial investment information from older generations. Sound financial advice has always been viewed as the domain of old and experienced individuals, inadvertently suggesting that investment in stocks should be made much later in life. By opting to have millennials at the frontline of financial advising, the message will be apparent that the generation is well prepared to start investing in their future.

Another significant factor to consider when developing a strategy for attracting millennials into the workforce is different perspectives and expectations about employment characterize this generation (Kaifi 88-89). For instance, work-life balance is a prized element for people in this generation and employers need to structure job descriptions and requirements in a way that accounts for this component.

The changing work dynamics can explain views of millennial about work and employment in the wake of developments of cutting edge technology, the Worldwide Web, Robotics, and artificial intelligence (Deloitte 1-2). The more subjective transitions, such as in politics and culture, have also had a crucial role in shaping the work behaviour of millennials. Hence, all these factors have transformed the working environment, and with the transformation, the evolving perspectives of the new generation are inevitable.

In the Deloitte survey of millennials, the organization found that they are deeply concerned about business motivations and ethics (Deloitte 2). The research also establishes a mismatch between what millennials believe on business ethics and what industries prioritize in their strategies. Work flexibility, diversity, and inclusion are also at the top of the list of values that millennials care about, as well as suitable remuneration and positive organizational culture. Ultimately, Raymond James Financial should account for each of these requirements of the company is to replace its aging workforce with the more vibrant millennials. A working environment that empowers the workforce, provides opportunities for personal growth and development, and in which all employees feel valued, are also highly desirable attributes among millennials when considering working opportunities.

Diversifying the firm’s portfolio of financial advisors

The company should consider diversifying the portfolio of financial advisors to include automated robo-advisors to meet the growing demand for this type of service. Although this option means a considerable reduction in the profit margin, it is an advantage in the long-term compared to the total loss of clients preferring automated advisory services at a much lower cost. Undoubtedly, Raymond James Financial Inc. will have to reformulate its strategy to extend to the scope of automated services, which may ultimately require a comprehensive reorganization of the human resources department. It implies that the company will need to invest in its research and development departments to come up with an artificial intelligence product that can effectively compete in the market.

A significant opportunity for becoming a market leader in the automated financial advisory industry segment is available. Hence, this status is achievable by incorporating the goal in the overall company strategy. It means that developing superior technology for its automated financial services department will be embedded in the mission and goals. Such an entrenchment bears an advantage of inculcating into employees values that superior technology and artificial intelligence are an essential components of company’ operations.

Three Major Issues for Continuous Research

1. The financial market is increasingly becoming familiar and comfortable with the use of technology and artificial intelligence for accessing financial products and services. In fact, customers are increasingly demanding web-based services because of ease of accessibility, among many other advantages. Therefore, it would be ill-informed not to take full advantage of the trend and expand the portfolio of services offered through web-based platforms. Achieving the goal will require continued research and analysis, details that will be examined as part of the ongoing research for this course.
2. Additional research on what millennials care about in work environments is another area of focus.
3. Another approach is establishing a promotional strategy for encouraging millennials to participate in the stock exchange market.