Consumer Duty

At Raymond James, our Client First culture means we’ve always put the needs of our clients before everything else. That’s why the Consumer Duty regulatory framework, introduced by the FCA on 31 July 2023, resonates strongly with our core values.

What is the Consumer Duty?

The Consumer Duty is designed to ensure that firms deliver even higher standards of consumer protection. It introduces Principle 12, a new Consumer Principle that provides a high-level expectation of conduct and associated outcomes.

New cross-cutting rules set the overarching conduct which firms must demonstrate when they act to deliver good outcomes for retail customers:

act in good faith
avoid causing foreseeable harm to retail customers
enable and support retail customers to pursue their financial objectives

The Consumer Duty builds on existing standards by introducing four specific outcomes, with the aim of providing better protection for clients by putting their needs first and by setting higher expectations for the standard of care they receive from financial services providers. These four specific outcomes represent the key elements between firms and their relationships with consumers:

Products and services
Products and services are designed to meet the needs of consumers, and sold to those whose needs they meet

Price and value
The price of products represents a fair value for retail customers in the target market for those products

Consumer understanding
A firm must support retail customer understanding so that its communications:
• meet the information needs of retail customers
• are likely to be understood by retail customers
• equip retail customers to make decisions that are effective, timely and properly informed

Consumer support
A firm must design and deliver support to retail customers so:
• it meets the needs of those customers (including vulnerable customers)
• it ensures products can be used as anticipated
• it includes appropriate friction in its customer journey to mitigate the risk of harm
• retail customers do not face unreasonable barriers

Our approach to the Consumer Duty

Our Client First culture, and our business strategy of supporting clients and their wealth managers, are already well aligned with the Consumer Duty. However, the Consumer Duty regulation gives us an additional opportunity to ensure that we continue to:

proactively seek to deliver good outcomes and put consumers’ interests at the heart of our activities;
focus on the outcomes that consumers receive, whilst enabling them to pursue their financial objectives;
ensure that clients have a sufficient understanding of how our services function;
identify when good outcomes are not being achieved and address this comprehensively and promptly
consistently challenge ourselves to ensure our actions are compatible with consumers’ interests and financial objectives.

Supporting vulnerable clients

We take our responsibility to do our best for all clients, including vulnerable clients, very seriously. That’s why we focus on understanding the factors behind vulnerability and the different stages of vulnerability – and in-line with the new regulation – we work to continuously enhance standards of care, while delivering the good outcomes that clients expect.

Delivering fair value in our products and services

We work to continuously ensure that our services are designed with clients firmly in mind and that our pricing structure is built with client value at the heart of all decisions. We are committed to offering suitable services that meet clients’ needs, are reasonably priced and are monitored over time to ensure they provide value. To support this commitment, we have created a fair value assessment that sets out how we approach fair value when it comes to the services provided by Raymond James wealth managers, within the framework of our target market.

Reinforcing our longstanding commitment to our clients

Considering the firm’s long-established culture of Client First, we believe that the Consumer Duty aligns with our vision to be a financial services firm as unique as the people we serve, transforming lives, businesses, and communities through the power of personal relationships and professional advice.

Going forward, we will continue to challenge ourselves to enhance and develop the services we provide our clients and ensure good outcomes for them.

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Black Monday

On 19 October 1987, the stock markets experienced a dramatic plunge that prompted many firms to shut down their trading desks and turn off their phones to minimize internal losses. Raymond James refused to do the same. Our desks stayed open to help meet clients’ needs, resulting in our first and only unprofitable quarter since the firm went public in 1983.

Who was Raymond James?

The Raymond in our name is actually from Edward Raymond, owner of a 15-employee mutual fund sales group, Raymond and Associates, along Florida’s west coast. He sold his company to Bob James on 15 July 1964, on condition that the surviving firm be called Raymond, James & Associates.

Three days after the sale, Ed Raymond was involved in a near-fatal automobile accident and never joined the firm.

Nonetheless, even after Raymond had passed away, Bob James insisted that his name remain on the door – ahead of James’ own. That was a promise he made to Ed Raymond three days before the accident, and Bob James was a man who kept his promises.

Bear Market of 1974

The severe bear market of 1974 threatened the existence of Raymond James, which was bleeding capital by the day. Tom James, his father and other leaders took extreme measures to keep the firm afloat, slashing costs, foregoing paychecks and even attempting to sell the firm for just enough capital to protect client assets and retain as many associates as possible. The story could have ended very differently if not for a sharp upturn and continued rebound in the stock markets late in the year.
This “fortunate near-death experience” (as Tom calls it) permanently marked his psyche, and has influenced our firm’s character and culture since, solidifying the conservative nature that emphasizes a determined focus on the long term – both for clients and the firm.

Taking Raymond James Public

When consideration was being given to taking Raymond James public, Tom James penned a letter to shareholders (largely employees at the time).
He wrote:

” … the public offering should be considered as a statement of our independence. While this is a psychological rather than an economic rationale, it is nonetheless very important. We have asserted for some time that we are not interested in becoming a small part of a very large corporation. That assertion results mainly from the inclinations of management rather than the economic benefits associated with either alternative. The public stock offering affords us the opportunity to enjoy a little bit of the best of both worlds. While shareholders will be given liquidity at fair market value, we will still have the ability to control our own destiny.”

After 40+ years of Tom’s leadership, upon becoming CEO, Paul Reilly was often questioned about whether the company might ultimately surrender its cherished independence and be acquired by some larger entity. His response: “Not while I’m around.” It’s a theme that continues today.