Financial Perspectives – Summer 2009

New Cash Sweep Option for Raymond James Clients

Given the economic environment over the last year, it’s not surprising that many investors have had security of their investments – including their cash holdings – top of mind. Meanwhile, in an environment where investment returns have been significantly damaged by market volatility, the interest rates paid on cash have become increasingly important.

In light of that situation, Raymond James is pleased to announce the enhanced Raymond James Bank Deposit Program (RJBDP), a multibank program for the transfer, or “sweep,” of available cash balances in your brokerage account. This option will replace the current RJBDP program as of September 8, 2009, and will allow for greater FDIC coverage, as well as the availability of more competitive interest rates.

Here’s how it works: Available cash in your brokerage account will be deposited into interestbearing deposit accounts at one or more banks on a predetermined priority list. If your cash balance exceeds the first bank’s predetermined limit for FDIC insurance of all funds, the excess cash will be deposited in the next bank. This process continues through all banks on the priority list, providing FDIC coverage up to $2.5 million for individual accounts and certain retirement accounts, or $5 million for joint accounts. Further, the interest rate paid to clients will be determined by Raymond James based upon commitments from the banks in the priority list. This should provide more flexibility, enabling the firm to offer higher rates than those provided by its current sweep programs. Yields on all Raymond James sweep options may be obtained at raymondjames.com/rates.htm or by contacting your financial advisor.

Depending on your account type and current sweep option, your account may be automatically changed to the new RJBDP beginning on the effective date. However, some clients will need to elect the new option and will receive a separate mailing to facilitate that election.

For more information about this change, please refer to the Important Account Information document in your statement. For additional questions regarding Raymond James’ cash sweep options, or to discuss the best program for you, please contact your financial advisor or Raymond James Client Services at 800-647-7378.

How the New RJBDP Works

In this example, Mary Smith has an individual brokerage account with $550,000 in cash being swept to RJBDP.

Her funds would be spread over three different banks to provide maximum FDIC insurance coverage. Meanwhile, interest payments would be paid to Mary by Raymond James based on the firm’s agreements with all participating banks.

Legislation increasing deposit insurance coverage limits from $100,000 per eligible account and accountholder to $250,000 took effect October 3, 2008, and is currently set to expire December 31, 2013. Coverage applies to total holdings per bank per holder. Visit fdic.gov for further information.

There is no assurance any of the trends mentioned will continue in the future.

Raymond James & Associates and Raymond James Financial Services are wholly owned subsidiaries of Raymond James Financial, Inc. (NYSE-RJF).

The information contained in this newsletter has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. We may, from time to time, have a position in the securities mentioned and may buy or sell such securities in the course of regular business.

Diversification and asset allocation do not ensure a profit or protect against a loss. U.S. government bonds are guaranteed by the U.S. government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Municipal bond interest is not subject to federal income tax but may be subject to AMT, state or local taxes. Brokered CDs involve market risk regarding their principal value, unlike traditional bank CDs. If a brokered CD is sold prior to maturity, the value of the CD will be subject to market fluctuations. This could result in a significant loss from the initial investment amount. Preferred securities are considered fixed income investments as their income payments are fixed over the term of the investment and will react similarly to other debt investments to changes in the market conditions.