Risk Management

Living our values remains a meaningful competitive differentiator for Raymond James. And we have found that our steadfast commitment to doing what’s best for clients is ultimately what’s best for our advisors and our firm.

A foundational firm value, Raymond James’ long-term conservative management and thoughtful approach to risk and compliance continues to contribute to our overall strong balance sheet and capital position – with ample liquidity, continued profitability and record earnings.

Risk Management
From left to right: Danielle Tarasen, SVP, International Supervision; Tarek Halal, SVP, Enterprise Risk Management; Chris Majeski, SVP, Head of PCG Supervision; Jonathan Santelli, EVP, General Counsel & Secretary; Steven LaBarbera, Chief Audit Executive; Emma Bredin, SVP, Chief Compliance Officer; Scott Willis, SVP, Deputy Chief BSA/AML Officer

Managing Risk As It Evolves

With a longstanding commitment to holistic risk management, we have deepened our approach by focusing on infrastructure that includes welcoming experienced leaders to help guide areas of increasing complexity in our highly regulated business.

These additions carry on the firm’s mission to ensure the highest protection for clients, advisors and the firm, while also providing our financial advisors with the flexibility required to serve their clients’ individual needs, in keeping with our culture.

The investments we’ve made in people, information and technology are vital as we keep our promise to work in the best interest of our clients, and to strengthen and protect the firm. As CEO and Chairman Paul Reilly has emphasized, “We need to stay ever vigilant.” A mindset supported at every level of the firm, we added nearly 200 associates over the last few years including in supervision, compliance, legal and anti-money laundering (AML) in addition to taking steps to modernize our capabilities.

In the spirit of persistent attention, nearly 100 infrastructure and security projects were executed this past fiscal year. Senior Vice President & Chief IT Security Officer Andy Zolper leads information security, data security and cyber security teams that made big impacts to safeguarding client data and significantly decreasing our vulnerability firmwide. Initiatives included providing additional protection measures to client data and upgrading our Cyber Threat Center (CTC) response capabilities.

Collaborative and Innovative Compliance

Connectedness and transparency across all risk management teams are key to managing firmwide risk. George Catanese, chief risk officer, contends that we can help “protect the individual and collective interest of every client and advisor” by keeping these tenets top of mind.

Chief Compliance Officer Emma Bredin confirmed that having a culture of compliance in line with our values of putting clients first, integrity and conservatism helps to protect Raymond James against regulatory and other risks. “It is vital that we respond to the current regulatory environment but also to maintain systems, processes and tools that allow our associates and advisors to better manage their compliance risks on a day-to-day basis – that protects the firm but also allows them to make decisions to better serve their clients. We continue to innovate in a way that means we are proactively thinking about risk, not just reacting to changing regulation and expectations.”

The consolidated management of enterprise fraud risk tightly weaves together all aspects of financial crimes including fraud, sanctions, anti-bribery, anti-terrorism and anti-money laundering. Showcasing the power of linking AML, fraud and government reporting, Raymond James was recently recognized with a United States Department of the Treasury Financial Crimes Enforcement Network (FinCEN) award for substantial contributions to helping uncover one of the Federal Bureau of Investigation’s highest priority transnational organized crime targets through Bank Secrecy Act (BSA) reporting. One of six significant criminal cases to receive FinCEN’s third annual Law Enforcement Award, this illustrates how our reported information is “critical to protecting the U.S. financial system from terrorist financing, money laundering and other serious crimes that can threaten our national and economic security,” as stated in a letter from the acting director of FinCEN.

Heading up anti-money laundering efforts, Bob Molloy, chief BSA/ AML officer, designed the reorganized framework for financial crimes management, and oversees all actions and changes of the program. “The key to our success has been a culture of support from day one. As a firm, we want to do what’s right,” he said.

Adapting to the ever-changing environment, the group continues to integrate solutions that, among other instinctive functions, appropriately highlight potentially suspicious transactions or behavior patterns. In addition to an increase in dedicated AML professionals and leading technology, expanded training includes cross-team interaction and required specialist certifications. “More than doing a job, it’s about developing an expert,” Bob stressed.

Next Generation Supervision

Part of our commitment to being nimble to the evolving needs of risk management included enhancements to the firm’s supervision program and control infrastructure. Organizational adjustments better aligned compliance and supervisory functions, including a new head of supervision and chief compliance officer.

Senior Vice President, Head of PCG Supervision Chris Majeski is focused on the supervision program as part of the overall risk operating model for the firm. “There is value in the ability to have an infrastructure that thinks across all the ways we do business. We recognize the individual aspects of each channel, and the company as a whole, to find common threads and proactively manage risk.”

Moving toward more intuitive ways to manage current and emerging risks, Chris and his team consider how we empower our financial advisors to be the best they can be by arming them with the right technology and data to make good risk decisions. “Overall, it’s about connecting data and centralized activities to see the big picture of risk – integrating as much as possible to create confidence in our foundation and ability to grow and maximize satisfied client and advisor experiences.”

A Steadfast, Strategic Approach

In light of the ever-changing regulatory environment and our expectations for risk management as a firm, we’ll continue to invest – adding to our supervision and compliance teams and refining our systems and policies. Protecting clients and advisors is in the best interest of everyone and our firm. As Bob Molloy underscored, “It’s about taking care of people: advisors, their clients and each other.”