“We have a lot of expenses that hit—some seasonal, some self-inflicted wounds—that should not play a part going forward,” said
For one, the firm is continuing to clean up from the mutual fund issues it disclosed earlier this year. The issue was related to some mutual fund share classes running specials, which were buried deep in prospectuses and were easy to miss, Julien said.
“In the December quarter, we took a
But in February, the firm backtracked from previously stated plans to require its advisors to pay the rebates to clients who were incorrectly sold more expensive classes of mutual funds over the past five years. That has resulted in an additional
At the same time, the
The firm’s profit was also affected by fewer days in the quarter, so investment advisory fees were down.
The b/d also added
There was also some seasonality related to information processing expenses, due to the annual printing and mailing of its statement for cash management accounts, 1099s for clients, and annual reports and proxies, all of which added
Business development expenses were also high, with the firm increasing its advertising airtime during the quarter, and ramping up recruiting activity.
The increase in expenses also challenged the firm’s private client group, with pre-tax income of
“These records have been driven by our long-term focus on recruiting and retaining a great group of financial advisors,” said CEO
Advisor headcount grew to 6,384, up 182 over last year and 48 over the fiscal first quarter.
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