Credit agency cites anti-money laundering fine in evaluation of Raymond James

Raymond James Financial Inc. gets generally positive marks in a new evaluation from Moody’s Investors Service, although the credit agency has a few cautions about the St. Petersburg-based financial services firm.

Raymond James’ (NYSE: RJF) financial performance is strong and stable, Moody’s said in June 6 report affirming the company’s Baa2 debt rating and a positive rating outlook. A Baa2 rating reflects moderate credit risk.

The positive outlook indicates the company’s creditworthiness continues to show signs of upward momentum, Moody’s said, citing Raymond James’ strong track record, solid capital and liquidity profile and three recent deals that will give it more high-net worth clients and broader geographic presence. Raymond James bought Mummert & Co. in Germany last week, and has deals pending for a 3Macs, a Canadian investment firm, and for the US Private Client Services unit of Deutsche Bank.

Growth has also led to Raymond James’ debut on the Fortune 500 list. The company, with $5.3 billion in revenue last year, was No. 482 on the list released June 6.

The deals also heighten the challenges Raymond James faces as it grows, Moody’s said. A $17 million fine by federal regulators for weakness in anti-money laundering controls “is a clear indication that the firm needs to enhance its risk management and compliance frameworks to support its expanding and diverse mix of activities,” Moody’s said in a ratings report.

The Department of Labor’s final rule on fiduciary standards for retirement account advisors will present implementation challenges to Raymond James and to the industry as a whole and will lead to high costs for technology and compliance, Moody’s said.

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