RAYMOND JAMES FINANCIAL INC

Previous wording

Certain statements made in this Quarterly Report on Form 10-Q may constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information concerning future strategic objectives, business prospects, anticipated savings, financial results (including expenses, earnings, liquidity, cash flow and capital expenditures), industry or market conditions (including changes in interest rates, inflation, and international trade policies), demand for and pricing of our products (including cash sweep and deposit offerings), anticipated timing and benefits of our acquisitions, and our level of success integrating acquired businesses, anticipated results of litigation, regulatory developments, and general economic conditions. In addition, words such as “believes,” “expects,” “anticipates,” “estimates,” “projects,” and future or conditional verbs such as “will,” “may,” “could,” “should,” and “would,” as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements. Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions. Although we make such statements based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ materially from those expressed in the forward-looking statements. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in our filings with the Securities and Exchange Commission (the “SEC”) from time to time, including our most recent Annual Report on Form 10-K, and subsequent Quarterly Report on Form 10-Q and Current Reports on Form 8-K, which are available at www.raymondjames.com and the SEC’s website at www.sec.gov. We expressly disclaim any obligation to update any forward-looking statement in the event it later turns out to be inaccurate, whether as a result of new information, future events, or otherwise.

Current wording

Certain statements made in this Quarterly Report on Form 10-Q may constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information concerning future strategic objectives, business prospects, anticipated savings, financial results (including expenses, earnings, liquidity, cash flow and capital expenditures), industry or market conditions (including changes in interest rates, inflation, and international trade policies), demand for and pricing of our products (including cash sweep and deposit offerings), anticipated timing and benefits of our acquisitions, and our level of success integrating acquired businesses, anticipated results of litigation, regulatory developments, and general economic conditions. In addition, words such as “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “projects,” and future or conditional verbs such as “will,” “may,” “could,” “should,” and “would,” as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements. Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions. Although we make such statements based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ materially from those expressed in the forward-looking statements. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in our filings with the Securities and Exchange Commission (the “SEC”) from time to time, including our most recent Annual Report on Form 10-K, subsequent Quarterly Report on Form 10-Q, and Current Reports on Form 8-K, which are available at www.raymondjames.com and the SEC’s website at www.sec.gov. We expressly disclaim any obligation to update any forward-looking statement in the event it later turns out to be inaccurate, whether as a result of new information, future events, or otherwise.

Previous wording

For our fiscal second quarter of 2025, we generated net revenues of $3.40 billion, an increase of 9% compared with the prior-year quarter, and pre-tax income of $671 million, an increase of 10% compared with the prior-year quarter. Our net income available to common shareholders of $493 million increased 4%, and our earnings per diluted share were $2.36, reflecting an increase of 6%. Our annualized return on common equity (“ROCE”) for the quarter was 16.4%, compared with 17.5% for the prior-year quarter, and our annualized return on tangible common equity (“ROTCE”) was 19.2%(1), compared with 21.0%(1) for the prior-year quarter.

Current wording

For our fiscal third quarter of 2025, we generated net revenues of $3.40 billion, an increase of 5% compared with the prior-year quarter, while pre-tax income of $563 million decreased 13% compared with the prior-year quarter. Our net income available to common shareholders was $435 million and our earnings per diluted share were $2.12, reflecting a decrease from the prior-year quarter levels of 11% and 8%, respectively. Our annualized return on common equity (“ROCE”) for the quarter was 14.3%, compared with 17.8% for the prior-year quarter, and our annualized return on tangible common equity (“ROTCE”) was 16.7%(1), compared with 21.2%(1) for the prior-year quarter. The results for the quarter were adversely impacted by a $58 million increase in expense associated with the settlement of a legal matter related to bond underwritings for a specific issuer sold to institutional investors between 2013 and 2015.

Previous wording

Excluding the impact of $19 million of expenses related to acquisitions completed in prior years, such as compensation expenses related to retention awards and amortization of identifiable intangible assets, our adjusted net income available to common shareholders was $507 million(1)for the three months ended March 31, 2025, an increase of 3% compared with adjusted net income available to common shareholders for the prior-year quarter. Our adjusted earnings per diluted share were $2.42(1), an increase of 5% compared with the prior-year quarter. Adjusted annualized ROCE for the quarter was 16.9%(1) and adjusted annualized ROTCE was 19.7%(1)compared with adjusted annualized ROCE of 18.3%(1) and adjusted annualized ROTCE of 21.8%(1) for the prior-year quarter.

Current wording

Excluding the impact of $14 million of expenses, net of their tax effect, related to acquisitions completed in prior years, such as compensation expenses related to retention awards and amortization of identifiable intangible assets, our adjusted net income available to common shareholders was $449 million(1)for the three months ended June 30, 2025, a decrease of 12% compared with adjusted net income available to common shareholders for the prior-year quarter. Our adjusted earnings per diluted share were $2.18(1), a decrease of 9% compared with the prior-year quarter. Adjusted annualized ROCE for the quarter was 14.8%(1) and adjusted annualized ROTCE was 17.2%(1)compared with adjusted annualized ROCE of 18.4%(1) and adjusted annualized ROTCE of 21.9%(1) for the prior-year quarter.

Previous wording

The increase in net revenues compared with the prior-year quarter was primarily due to higher asset management and related administrative fees largely the result of higher PCG client assets in fee-based accounts. The increase in PCG client assets in fee-based accounts was primarily due to market appreciation and net new assets to the firm since the prior-year period. Brokerage revenues increased compared with the prior-year quarter largely due to higher fixed income brokerage revenues. Investment banking revenues also increased primarily due to more favorable market conditions compared with the prior-year quarter, although activity levels slowed compared with our fiscal first quarter of 2025 due to market uncertainty. Offsetting these increases was a decrease in combined net interest income and RJBDP fees from third‑party banks due to lower short-term interest rates compared with the prior-year quarter, which more than offset a favorable impact from growth in average interest-earning assets.

Current wording

The increase in net revenues compared with the prior-year quarter was primarily due to higher asset management and related administrative fees largely the result of higher PCG client assets in fee-based accounts. The increase in PCG client assets in fee-based accounts was primarily due to market appreciation and net new assets to the firm since the prior-year period. Investment banking revenues increased 16% compared with the prior-year quarter primarily due to an increase in mergers & acquisition and advisory revenues, as well as increased underwriting revenues, although uncertain market conditions for transaction closings adversely impacted both periods. Brokerage revenues also increased compared with the prior-year quarter. Offsetting these increases was a decrease in combined net interest income and RJBDP fees from third‑party banks due to lower short-term interest rates and lower average RJBDP balances swept to third-party banks compared with the prior-year quarter, which more than offset a favorable impact from growth in average interest-earning assets.

Previous wording

Compensation, commissions and benefits expense increased 8%, resulting from an increase in compensable revenues, annual salary increases, and an increase in compensation costs to support our growth. Our compensation ratio, or the ratio of compensation, commissions and benefits expense to net revenues, was 64.8%, compared with 65.5% for the prior-year quarter. Excluding acquisition-related compensation expenses, our adjusted compensation ratio was 64.5%(1), compared with 65.2%(1) for the prior-year quarter.

Current wording

Compensation, commissions and benefits expense increased 5%, resulting from an increase in compensable revenues, annual salary increases, and an increase in compensation costs to support our growth. Our compensation ratio, or the ratio of compensation, commissions and benefits expense to net revenues, was 64.8%, and excluding acquisition-related compensation expenses, our adjusted compensation ratio was 64.5%(1), both remaining relatively unchanged compared with the prior-year quarter.

Previous wording

Non-compensation expenses increased 13%, primarily due to higher communications and information processing expenses resulting from continued investments in technology to benefit our advisors and their clients and to support our growth, higher legal and regulatory matters expenses as the prior-year period reflected a net reserve release, which did not reoccur in the current-year period, and higher investment sub-advisory fees resulting from growth in assets under management in sub-advised programs. Partially offsetting these increases, the bank loan provision for credit losses decreased largely resulting from an improved economic forecast and strong credit metrics.

Current wording

Non-compensation expenses increased 28%, primarily due to higher provisions for legal and regulatory matters as the current quarter included the aforementioned $58 million expense increase related to the settlement of a legal matter. Non-compensation expenses also increased due to a bank loan provision for credit losses of $15 million for the current quarter compared with a benefit of $10 million for the prior-year quarter, higher communications and information processing expenses resulting from continued investments in technology to benefit our advisors and their clients and to support our growth, and higher investment sub-advisory fees resulting from growth in assets under management in sub-advised programs.

Previous wording

Our effective income tax rate was 26.2% for our fiscal second quarter of 2025, an increase compared with the 21.8% effective income tax rate for the prior-year quarter, primarily due to the impact of non-deductible valuation losses on our company-owned life insurance policies recognized in the current quarter compared with nontaxable valuation gains in the prior-year quarter, which had favorably impacted our effective tax rate for that quarter.

Current wording

Our effective income tax rate was 22.6% for our fiscal third quarter of 2025, a decrease compared with the 23.6% effective income tax rate for the prior-year quarter, primarily due to higher non-taxable valuation gains on our corporate-owned life insurance policies recognized in the current quarter compared with the prior-year quarter.

Previous wording

As of March 31, 2025, our tier 1 leverage ratio was 13.3% and total capital ratio was 24.8% both well above regulatory capital requirements. We also continue to have substantial liquidity with $2.5 billion(2) of corporate cash as of March 31, 2025. During the three months ended March 31, 2025, we repurchased 1.7 million shares of our common stock for $250 million at an average price of $146 per share under the Board of Directors’ common stock repurchase authorization, leaving $1.2 billion available under the Boards’ common stock share repurchase authorization as of March 31, 2025. We believe our capital and funding position provides us the opportunity to manage our balance sheet prudently and to continue to be opportunistic and invest in growth across our businesses.

Current wording

As of June 30, 2025, our tier 1 leverage ratio was 13.1% and total capital ratio was 24.2% both well above regulatory capital requirements. We also continue to have substantial liquidity with $2.35 billion of RJF corporate cash(2) as of June 30, 2025. During the three months ended June 30, 2025, we repurchased 3.3 million shares of our common stock for $451 million at an average price of $137 per share under the Board of Directors’ common stock repurchase authorization, leaving $749 million available under the authorization as of June 30, 2025. We believe our capital and liquidity levels allow us to invest in growth across our businesses and continue to be opportunistic in our deployment of capital.

Previous wording

For the six months ended March 31, 2025, we generated net revenues of $6.94 billion, an increase of 13% compared with the prior-year period, and pre-tax income of $1.42 billion, an increase of 15%. Our net income available to common shareholders of $1.09 billion was 12% higher than the prior-year period and our earnings per diluted share were $5.22, reflecting a 15% increase. Our annualized ROCE was 18.4%, up slightly from 18.3% for the prior-year period, and our annualized ROTCE was 21.6%(1), compared with 22.0%(1) for the prior-year period.

Current wording

For the nine months ended June 30, 2025, we generated net revenues of $10.34 billion, an increase of 10% compared with the prior-year period, and pre-tax income of $1.98 billion, an increase of 5%. Our net income available to common shareholders of $1.53 billion was 4% higher than the prior-year period and our earnings per diluted share were $7.35, reflecting a 7% increase. Our annualized ROCE was 17.1%, down from 18.2% for the prior-year period, and our annualized ROTCE was 19.9%(1), compared with 21.8%(1) for the prior-year period.

Previous wording

Excluding the impact of $39 million of expenses related to acquisitions completed in prior years, adjusted net income available to common shareholders for the six months ended March 31, 2025 was $1.12 billion(1), an increase of 11% compared with adjusted net income available to common shareholders for the prior-year period. Our adjusted earnings per diluted share were $5.36(1), an increase of 14% compared with the prior-year period. Adjusted annualized ROCE was 18.9%(1), compared with 19.0%(1) for the prior-year period, and adjusted annualized ROTCE was 22.1%(1), compared with 22.8%(1) for the prior-year period.

Current wording

Excluding the impact of $43 million of expenses, net of their tax effect, related to acquisitions completed in prior years, adjusted net income available to common shareholders for the nine months ended June 30, 2025 was $1.57 billion(1), an increase of 4% compared with adjusted net income available to common shareholders for the prior-year period. Our adjusted earnings per diluted share were $7.55(1), an increase of 6% compared with the prior-year period. Adjusted annualized ROCE was 17.5%(1), compared with 18.8%(1) for the prior-year period, and adjusted annualized ROTCE was 20.5%(1), compared with 22.5%(1) for the prior-year period.

Previous wording

The increase in net revenues compared with the prior-year period was primarily due to higher asset management and related administrative fees, largely the result of higher PCG client assets in fee-based accounts at the beginning of each of the current-year quarterly billing periods compared with the prior-year billing periods. The increase in PCG client assets in fee-based accounts resulted from net market appreciation and net new assets to the firm since the prior-year period. Investment banking revenues also increased significantly compared with the prior-year period primarily due to more favorable market conditions in the current period, particularly in our fiscal first quarter of 2025. Brokerage revenues also increased compared with the prior-year period largely due to an increase in client activity particularly in the PCG segment. Offsetting these increases was a decrease in combined net interest income and RJBDP fees from third‑party banks, due to lower short-term interest rates compared with the prior-year period, which more than offset a favorable impact from growth in average interest-earning assets and average RJBDP balances swept to third-party banks.

Current wording

The increase in net revenues compared with the prior-year period was primarily due to higher asset management and related administrative fees, largely the result of higher PCG client assets in fee-based accounts at the beginning of each of the current-year quarterly billing periods compared with the prior-year billing periods. The increase in PCG client assets in fee-based accounts resulted from net market appreciation and net new assets to the firm since the prior-year period. Investment banking revenues also increased significantly compared with the prior-year period primarily due to more favorable market conditions at the beginning of our fiscal 2025. Brokerage revenues also increased compared with the prior-year period largely due to an increase in client activity in both our PCG and Capital Markets segments. Offsetting these increases was a decrease in combined net interest income and RJBDP fees from third‑party banks, due to lower short-term interest rates compared with the prior-year period and, to a lesser extent, lower RJBDP balances swept to third-party banks, which more than offset a favorable impact from growth in average interest-earning assets.

Previous wording

Compensation, commissions and benefits expense increased 13%, primarily due to an increase in compensable revenues, annual salary increases, and an increase in compensation costs to support our growth. Our compensation ratio was 64.5%, compared with 64.7% for the prior-year period. Excluding acquisition-related compensation expenses, our adjusted compensation ratio was 64.3%(1), flat compared with the prior-year period.

Current wording

Compensation, commissions and benefits expense increased 10%, primarily due to an increase in compensable revenues, an increase in compensation costs to support our growth, and annual salary increases. Our compensation ratio was 64.6%, and excluding acquisition-related compensation expenses, our adjusted compensation ratio was 64.4%(1), both remaining relatively unchanged compared with the prior-year period.

Previous wording

Non-compensation expenses increased 13%, primarily due to higher legal and regulatory matters expenses as the prior-year quarter reflected a net reserve release, which did not reoccur in the current quarter. Non-compensation expenses also increased due to higher communications and information processing expenses resulting from continued investments in technology to benefit our advisors and their clients and to support our growth and higher investment sub-advisory fees resulting from growth in assets under management in sub-advised programs.

Current wording

Non-compensation expenses increased 18%, primarily due to higher legal and regulatory matters expenses as the current-year period included a net provision expense for legal and regulatory matters, including a $58 million expense increase associated with the aforementioned settlement of a legal matter while the prior-year period reflected a net reserve release. Non-compensation expenses also increased due to higher communications and information processing expenses resulting from continued investments in technology to benefit our advisors and their clients and to support our growth, higher investment sub-advisory fees resulting from growth in assets under management in sub-advised programs, and higher business development expenses.

Previous wording

Our effective income tax rate was 22.9% for the six months ended March 31, 2025, an increase from 21.4% for the prior-year period, primarily due to the impact of non-deductible valuation losses on our company-owned life insurance policies recognized in the current-year period compared with nontaxable valuation gains in the prior-year period, which had favorably impacted our effective tax rate for that period.

Current wording

Our effective income tax rate was 22.8% for the nine months ended June 30, 2025, an increase from 22.1% for the prior-year period, primarily due to lower non-taxable valuation gains on our corporate-owned life insurance policies recognized in the current-year period compared with the prior-year period.

Previous wording

Tangible common equity is computed by subtracting goodwill and identifiable intangible assets, net, along with the associated deferred tax liabilities, from total common equity attributable to RJF. Average common equity is computed by adding the total common equity attributable to RJF as of the date indicated to the prior quarter-end total, and dividing by two, or in the case of average tangible common equity, computed by adding tangible common equity as of the date indicated to the prior quarter-end total, and dividing by two. Average common equity for the year-to-date period is computed by adding the total common equity attributable to RJF as of each quarter-end date during the indicated year-to-date period to the beginning of year total, and dividing by three, or in the case of average tangible common equity, computed by adding tangible common equity as of each quarter-end date during the indicated year-to-date period to the beginning of year total, and dividing by three. Adjusted average common equity is computed by adjusting for the impact on average common equity of the non-GAAP adjustments, as applicable for each respective period. Adjusted average tangible common equity is computed by adjusting for the impact on average tangible common equity of the non-GAAP adjustments, as applicable for each respective period.

Current wording

Tangible common equity is computed by subtracting goodwill and identifiable intangible assets, net, along with the associated deferred tax liabilities, from total common equity attributable to RJF. Average common equity is computed by adding the total common equity attributable to RJF as of the date indicated to the prior quarter-end total, and dividing by two, or in the case of average tangible common equity, computed by adding tangible common equity as of the date indicated to the prior quarter-end total, and dividing by two. Average common equity for the year-to-date period is computed by adding the total common equity attributable to RJF as of each quarter-end date during the indicated year-to-date period to the beginning of year total, and dividing by four, or in the case of average tangible common equity, computed by adding tangible common equity as of each quarter-end date during the indicated year-to-date period to the beginning of year total, and dividing by four. Adjusted average common equity is computed by adjusting for the impact on average common equity of the non-GAAP adjustments, as applicable for each respective period. Adjusted average tangible common equity is computed by adjusting for the impact on average tangible common equity of the non-GAAP adjustments, as applicable for each respective period.

Previous wording

The Fed funds target rate began our fiscal 2024 at a range of 5.25% to 5.50% and remained throughout most of our fiscal 2024. In late September 2024, the Fed decreased the Fed funds target rate by 50 basis points, followed by two additional 25‑basis-point reductions during fiscal 2025 to end the period at a range of 4.25% to 4.50%. The Fed has indicated that it intends to closely monitor market conditions to determine whether it will consider making additional adjustments to short-term interest rates during the remainder of our fiscal 2025. The following table details the Fed’s short-term interest rate activity since the beginning of our fiscal year 2024.

Current wording

The Fed funds target rate began our fiscal 2024 at a range of 5.25% to 5.50% where it remained throughout most of our fiscal 2024. In late September 2024, the Fed decreased the Fed funds target rate by 50 basis points, followed by two additional 25‑basis-point reductions during fiscal 2025 to end the current-year period at a range of 4.25% to 4.50%. The Fed has indicated that it intends to closely monitor market conditions to determine whether it will consider making additional adjustments to short-term interest rates during the remainder of our fiscal 2025. The following table details the Fed’s short-term interest rate activity since the beginning of our fiscal year 2024.

Previous wording

Decreases in short-term interest rates generally also result in a decrease to our RJBDP fees earned from third-party banks, although the magnitude of the impact may also be impacted by demand for cash balances by third-party banks and the rate paid to clients on their cash sweep balances. Rates paid to clients on their cash balances are generally impacted by the level of short-term interest rates, as well as competitive industry dynamics and the demand for client cash. Additionally, any future changes to regulatory rules or interpretations governing the fees the firm earns on cash sweep balances could also impact the rates we pay to clients on cash balances. In recent fiscal years, we have sought to continue to meet client demand for higher yields on cash balances, without sacrificing the benefits of FDIC insurance on such balances, by introducing new deposit products leveraging our bank subsidiaries or through initiatives offered within the RJBDP. Such programs include our ESP introduced to our clients in fiscal 2023 where such deposits are held by Raymond James Bank, offer enhanced rates, and offer FDIC coverage of up to $50 million for certain accounts, as well as initiatives offered from time to time within the RJBDP program which may offer enhanced rates to clients on certain balances within the program. These programs, while meeting client needs and diversifying our funding sources, have a higher relative cost than other alternatives therefore reducing our net interest margin and yields on RJBDP balances.

Current wording

Decreases in short-term interest rates generally result in a decrease to our RJBDP fees earned from third-party banks, although the magnitude of the impact may also be impacted by demand for cash balances by third-party banks and the rate paid to clients on their cash sweep balances. Rates paid to clients on their cash balances are generally impacted by the level of short-term interest rates, as well as competitive industry dynamics and the demand for client cash. Additionally, any future changes to regulatory rules or interpretations governing the fees the firm earns on cash sweep balances could also impact the rates we pay to clients on cash balances. In recent fiscal years, we have sought to continue to meet client demand for higher yields on cash balances, without sacrificing the benefits of FDIC insurance on such balances, by introducing new deposit products leveraging our bank subsidiaries or through initiatives offered within the RJBDP. Such programs include our ESP introduced to our clients in fiscal 2023 where such deposits are held by Raymond James Bank, offer enhanced rates, and offer FDIC coverage of up to $50 million for certain accounts, as well as initiatives offered from time to time within the RJBDP program which may offer enhanced rates to clients on certain balances within the program. These programs, while meeting client needs and diversifying our funding sources, have a higher relative cost than other alternatives therefore reducing our net interest margin and yields on RJBDP balances.

Previous wording

Combined net interest income and RJBDP fees from third-party banks was $651 million and $689 million for the three months ended March 31, 2025 and 2024, respectively. The 6% decline compared with the prior-year quarter was primarily due to lower short-term interest rates, which more than offset a favorable impact from growth in average interest-earning assets.

Current wording

Combined net interest income and RJBDP fees from third-party banks was $656 million and $672 million for the three months ended June 30, 2025 and 2024, respectively. The 2% decline compared with the prior-year quarter was primarily due to lower short-term interest rates and lower average RJBDP balances swept to third-party banks, which more than offset favorable impacts from growth in average interest-earning assets and a slight increase in net interest margin.

Previous wording

Combined net interest income and RJBDP fees from third-party banks was $1.32 billion and $1.39 billion for the six months ended March 31, 2025 and 2024, respectively. The 5% decline compared with the prior-year period was primarily due to lower short-term interest rates, which more than offset a favorable impact from growth in average interest-earning assets and average RJBDP balances swept to third-party banks.

Current wording

Combined net interest income and RJBDP fees from third-party banks was $1.98 billion and $2.06 billion for the nine months ended June 30, 2025 and 2024, respectively. The 4% decline compared with the prior-year period was primarily due to lower short-term interest rates and, to a lesser extent, lower average RJBDP balances swept to third-party banks, which more than offset a favorable impact from growth in average interest-earning assets.

Previous wording

As of March 31, 2025, December 31, 2024, and March 31, 2024 PCG AUA included assets associated with firms affiliated with us through our RCS division of $185.6 billion, $188.2 billion, and $160.8 billion, respectively, of which $158.5 billion, $160.2 billion, and $134.5 billion, respectively, were assets in fee-based accounts. Based on the nature of the services provided to such firms, revenues related to these assets in the PCG segment are included in “Account and service fees.” The growth in RCS client assets from March 2024 is partially due to transfers into RCS from our other financial advisor channels. We may continue to experience transfers to our RCS division; however, consistent with our experience in recent fiscal years, we would not expect these financial advisor transfers to significantly impact our results of operations.

Current wording

As of June 30, 2025, March 31, 2025, and June 30, 2024 PCG AUA included assets associated with firms affiliated with us through our RIA and custody services (“RCS”) division of $201.6 billion, $185.6 billion, and $167.2 billion, respectively, of which $173.9 billion, $158.5 billion, and $140.6 billion, respectively, were assets in fee-based accounts. Based on the nature of the services provided to such firms, revenues related to these assets in the PCG segment are included in “Account and service fees.” The growth in RCS client assets over time is partially due to transfers into RCS from our other financial advisor channels. We may continue to experience transfers to our RCS division; however, consistent with our experience in recent fiscal years, we would not expect these financial advisor transfers to significantly impact our results of operations.

Previous wording

PCG AUA as of March 31, 2025 decreased 1% and PCG assets in fee-based accounts decreased slightly compared with December 31, 2024 due to market-driven depreciation, partially offset by net new assets. PCG assets in fee-based accounts continued to be a significant percentage of overall PCG AUA due to many clients’ preference for fee-based alternatives versus transaction-based accounts and, as a result, a significant portion of our PCG revenues is more directly impacted by market movements.

Current wording

PCG AUA and PCG assets in fee-based accounts as of June 30, 2025 increased 7% and 8%, respectively, compared with March 31, 2025, and increased 11% and 15%, respectively, compared with June 30, 2024 due to market-driven appreciation and net new assets, reflecting the favorable impact of our advisor recruiting and retention. PCG assets in fee-based accounts continued to be a significant percentage of overall PCG AUA due to many clients’ preference for fee-based alternatives versus transaction-based accounts and, as a result, a significant portion of our PCG revenues is directly impacted by market movements.

Previous wording

The “Average yield on RJBDP - third-party banks” in the preceding table is computed by dividing annualized RJBDP fees from third-party banks, which are net of the interest expense paid to clients by the third-party banks, by the average daily RJBDP balances at third-party banks. The average yield on RJBDP - third-party banks for the three and six months ended March 31, 2025 decreased from the prior year largely as a result of decreases in the Fed’s short-term benchmark interest rate, as well as the impact of growth in RJBDP balances offering enhanced rates to clients which reduced the yield earned from third-party banks on such balances. See “Management’s Discussion and Analysis - Net interest analysis” for further information.

Current wording

The “Average yield on RJBDP - third-party banks” in the preceding table is computed by dividing annualized RJBDP fees from third-party banks, which are net of the interest expense paid to clients by the third-party banks, by the average daily RJBDP balances at third-party banks. The average yield on RJBDP - third-party banks for the three and nine months ended June 30, 2025 decreased from the corresponding prior-year periods largely as a result of decreases in the Fed’s short-term benchmark interest rate. For the nine-month period, the decrease also reflected the impact of growth in RJBDP balances offering enhanced rates to clients which reduced the yield earned from third-party banks on such balances. See “Management’s Discussion and Analysis - Net interest analysis” for further information.

Previous wording

Total clients’ domestic cash sweep and ESP balances decreased 3% compared with December 31, 2024, primarily due to a decrease in RJBDP balances and, to a lesser extent, ESP deposits. PCG segment results can be impacted by not only changes in the level of client cash balances, but also by the allocation of client cash balances between the RJBDP, the CIP, and the ESP, as the PCG segment may earn different amounts from each of these client cash destinations, depending on multiple factors.

Current wording

Total clients’ domestic cash sweep and ESP balances decreased 4% compared with March 31, 2025, primarily due to seasonal declines related to client tax payments as well as quarterly asset management fee billings. PCG segment results can be impacted by not only changes in the level of client cash balances, but also by the allocation of client cash balances between the RJBDP, the CIP, and the ESP, as the PCG segment may earn different amounts from each of these client cash destinations, depending on multiple factors.

Previous wording

Net revenues of $2.49 billion increased 6%, while pre-tax income of $431 million decreased 3%.

Current wording

Net revenues of $2.49 billion increased 3%, while pre-tax income of $411 million decreased 7%.

Previous wording

Asset management and related administrative fees increased $174 million, or 14%, primarily due to higher assets in fee-based accounts at the beginning of the current quarter compared with the prior-year quarter resulting from market-driven appreciation and net new assets, due to the favorable impact of our advisor recruiting and retention.

Current wording

Asset management and related administrative fees increased $98 million, or 7%, primarily due to higher assets in fee-based accounts at the beginning of the current quarter compared with the prior-year quarter resulting from market-driven appreciation and net new assets, due to the favorable impact of our advisor recruiting and retention.

Previous wording

Brokerage revenues increased $12 million, or 3%, primarily due to higher client activity in the current quarter.

Current wording

Brokerage revenues increased $11 million, or 3%, primarily due to higher client activity in the current quarter.

Previous wording

Account and service fees decreased $36 million, or 7%, primarily due to a decrease in RJBDP fees. RJBDP fees paid to PCG from our Bank segment and third-party banks decreased despite an increase in overall RJBDP balances, primarily driven by a

Current wording

Account and service fees decreased $30 million, or 6%, primarily due to a decrease in RJBDP fees. RJBDP fees paid to PCG from third-party banks and our Bank segment decreased despite an increase in average RJBDP balances, primarily driven by a reduction in the average RJBDP third-party bank yield. RJBDP fees from third-party banks decreased by a greater amount than RJBDP fees from our Bank segment as average balances swept to third-party banks declined due to a higher allocation of balances to our Bank segment. Partially offsetting the overall decline in total RJBDP fees, mutual fund service fees increased primarily due to higher average mutual fund assets.

Previous wording

Compensation-related expenses increased $135 million, or 8%, primarily due to higher commission expense resulting from higher compensable revenues, including asset management and related administrative fees and brokerage revenues, as well as an increase in compensation costs to support our growth and annual salary increases.

Current wording

Compensation-related expenses increased $87 million, or 5%, primarily due to higher commission expense resulting from higher compensable revenues, including asset management and related administrative fees and brokerage revenues, as well as an increase in compensation costs to support our growth and annual salary increases.

Previous wording

Asset management and related administrative fees increased $459 million, or 19%, primarily due to higher assets in fee-based accounts at the beginning of each of the current-year billing periods compared with the prior-year periods resulting from market-driven appreciation and net new assets, due to the favorable impact of our advisor recruiting and retention.

Current wording

Asset management and related administrative fees increased $557 million, or 15%, primarily due to higher assets in fee-based accounts at the beginning of each of the current-year billing periods compared with the prior-year periods resulting from market-driven appreciation and net new assets, due to the favorable impact of our advisor recruiting and retention.

Previous wording

Account and service fees decreased $55 million, or 5%, primarily due to a decrease in RJBDP fees. RJBDP fees paid to PCG from our Bank segment and third-party banks decreased primarily due to a decrease in the average RJBDP third-party bank yield largely due to the impact of lower short-term interest rates, as well as the impact of growth in RJBDP balances offering enhanced rates to clients which reduced the yield the PCG segment earned on such balances. These decreases were partially offset by higher average RJBDP balances. Partially offsetting the decline in total RJBDP fees, mutual fund service fees increased, primarily from higher average mutual fund assets.

Current wording

Account and service fees decreased $85 million, or 5%, primarily due to a decrease in RJBDP fees. RJBDP fees paid to PCG from third-party banks and our Bank segment decreased primarily due to a decrease in the average RJBDP third-party bank yield. RJBDP fees from third-party banks decreased by a greater amount than RJBDP fees from our Bank segment as average balances swept to third-party banks declined due to a higher allocation of balances to our Bank segment. These decreases were partially offset by higher average RJBDP balances. Partially offsetting the decline in total RJBDP fees, mutual fund service fees increased primarily due to higher average mutual fund assets.

Previous wording

Compensation-related expenses increased $397 million, or 12%, primarily due to higher commission expense resulting from higher compensable revenues, including asset management and related administrative fees and brokerage revenues, as well as an increase in compensation costs to support our growth and annual salary increases.

Current wording

Compensation-related expenses increased $484 million, or 10%, primarily due to higher commission expense resulting from higher compensable revenues, including asset management and related administrative fees and brokerage revenues, as well as an increase in compensation costs to support our growth and annual salary increases.

Previous wording

Net revenues of $876 million increased 33% and pre-tax income was $110 million, compared with a pre-tax loss of $14 million for the prior-year period.

Current wording

Net revenues of $381 million increased 15%, while the segment pre-tax loss was $54 million, compared with a pre-tax loss of $14 million for the prior-year quarter.

Previous wording

Brokerage revenues increased $39 million, or 32%, including higher client activity in fixed income and equity securities.

Current wording

Brokerage revenues increased $17 million, or 14%, due to higher client activity in fixed income and equity products.

Previous wording

Compensation-related expenses increased $22 million, or 9%, primarily due to the increase in revenues.

Current wording

Compensation-related expenses increased $19 million, or 8%, primarily due to the increase in revenues.

Previous wording

Brokerage revenues increased $25 million, or 10%, primarily due to an increase in both fixed income and equity securities.

Current wording

Brokerage revenues increased $42 million, or 11%, primarily due to an increase in both fixed income and equity securities.

Previous wording

Compensation-related expenses increased $85 million, or 18%, primarily due to the increase in revenues.

Current wording

Compensation-related expenses increased $104 million, or 14%, primarily due to the increase in revenues.

Previous wording

Non-compensation expenses increased $8 million, or 4%, primarily due to higher business development expenses and communications and information processing expenses largely to support our growth, partially offset by lower professional fees.

Current wording

Non-compensation expenses increased $80 million, or 27%, primarily due to the aforementioned $58 million reserve increase in the current quarter, as well as higher business development expenses and communications and information processing expenses largely to support our growth, partially offset by lower professional fees.

Previous wording

Fees for our managed programs are generally collected quarterly. Approximately 75% of these fees are based on balances as of the beginning of the quarter (primarily in AMS), approximately 10% are based on balances as of the end of the quarter, and approximately 15% are based on average daily balances throughout the quarter.

Current wording

Fees for our managed programs are generally collected quarterly. Approximately 75% of these fees are based on balances as of the beginning of the quarter (primarily in AMS), approximately 15% are based on balances as of the end of the quarter, and approximately 10% are based on average daily balances throughout the quarter.

Previous wording

Net revenues of $5.03 billion increased 10% and pre-tax income of $893 million increased 1%.

Current wording

Net revenues of $291 million increased 10% and pre-tax income of $125 million increased 12%.

Previous wording

Asset management and related administrative fees increased $36 million, or 15%, driven by higher financial assets under management and assets in non-discretionary asset-based programs at AMS, primarily due to market-driven appreciation in asset values and net inflows to PCG fee-based accounts.

Current wording

Asset management and related administrative fees increased $26 million, or 10%, driven by higher financial assets under management and assets in non-discretionary asset-based programs at AMS, primarily due to market-driven appreciation in asset values and net inflows to PCG fee-based accounts.