Raymond James Financial on Wednesday reported fiscal first quarter net revenue and net income that declined sequentially from the prior quarter, mainly due to rough financial market conditions.

For the fiscal first quarter ended December 31, 2015, quarterly net revenues of $1.27 billion rose 2 percent from the year-earlier quarter but dropped 5 percent versus the preceding quarter. The St. Petersburg, Fla.-based company attributed the sequential decline to two main reasons: lower assets in fee-based accounts caused by stumbling equity markets; and a rough environment for equity investment banking in November and December.

Quarterly net income of $106.3 million, or $0.73 per diluted share, fell 16 percent versus the year-earlier quarter and 18 percent versus the preceding quarter. The decline was pegged to growth-related expenses and increased reserves for legal and regulatory matters in the private-client group segment, coupled with tough going in the equity markets and equity investment banking sector.

Growth-related expenses included costs associated with recruiting financial advisors. “When you recruit in up markets the numbers look good; when the revenue goes down it kind of exposes the expenses,” said Paul Reilly, CEO of Raymond James Financial, during an analyst call on Thursday morning. “But these are good investments.”

During the call, Reilly noted he didn’t view the quarter as a “typical, solid Raymond James quarter.”

“The financial results were disappointing, but they were really caused by a number of market factors, including headwinds and turbulence in the financial markets and timing of the some of the incurred expenses,” he said.

During the first quarter, Raymond James achieved a record number of 6,687 financial advisors, up 351 from a year ago.

In December 2015, Raymond James announced the acquisition of the U.S. private-client service unit of Deutsche Bank, which added $50 billion in assets and 200 advisors. That deal is expected to close in the September 2016 quarter, and the advisors will operate under the Alex. Brown division of Raymond James.

The name pays homage to the new unit’s past. In 1999, Deutsche Bank purchased its U.S. private-client business when it acquired Bankers Trust Corp. Two years before that, Bankers Trust bought Alex. Brown & Sons, a storied Baltimore-based brokerage dating from 1800. The merged entity became BT Alex. Brown, but after it was bought by Deutsche Bank the Alex. Brown name was dropped in 2002.

Reilly said the addition of Deutsche Bank’s advisors should help the company grow in the Northeast region. He also acknowledged the integration will result in costs.

“We have to do that well,” he said, referencing the criticism the company received for upfront costs entailed from keeping and integrating as many advisors as possible after it bought Memphis-based brokerage and investment bank Morgan Keegan in 2012. “We need to do the same thing with the Alex. Brown advisors. Long-term will be measured by their successful integration and how many people stay with us; not by some of the shorter-term cuts.”

Elsewhere, Reilly attributed advisor head count growth to strong recruiting of new advisors and retention of existing ones. “They are both great asset growth drivers, subject to the equity markets,” he said.

In response to an analyst’s question regarding where Raymond James’ recruiting efforts are bearing the most fruit, Reilly said the company is getting the bulk of its new recruits from the wirehouses.

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