Paul Reilly: Yes. I don’t know if I have those exact numbers, I will say, we didn’t see $10 million teams a year or two to go. Now we see $20 million and $30 million teams that are — the batting average is pretty good, but there’s a lot of competition. We are not the highest payer, but we still we are still doing really, really well. Yes, we have a lot in the door. But right now, when we say in the pipeline, they’re not committed. We are in the middle of — we are right there neck and neck, and I think we have a pretty good read on who will come in or not or who are close and you stay at it. So — but it’s a large number, and we are actually honestly a little surprised. I think it’s — it’s both the growth of our firm and our platform, the high net worth initiatives that we’ve had and what we’ve built really since Alex Brown has joined us with their help being a place for people in the high net — ultra-high net worth feel very comfortable.
And then our technology and our systems and culture, it’s all combined to add it to a place where, frankly, if you’d asked us a couple of years ago, we would say we wouldn’t have told you would expect $10 million, $20 million, $30 million teams, multiple teams at one time. So our job is to get them in the door, right? So the good ones. So that’s what we work hard on.
Operator: Your next question comes from the line of Mark McLaughlin from Bank of America. Your line is open.
Mark McLaughlin: Good evening, guys. Thanks for taking my question. For my first one, I was curious, how do you view your use of transition assistance and loans to financial advisors? I know some of your competitors use that a lot in terms of generating growth. How do you view your competitivity in that space?
Paul Reilly: Yes. First, everyone uses them. So if you want to recruit with zero transition system [indiscernible] you might bring some people in but not much. I mean advisors feel there’s a value to their practices and want a fair return on those. So that is part of recruiting for all the firms. Not so much in the RIA channel, but certainly in the employee and independent channel. We’ve consistently since my time and before have not been the highest on purpose. And — we want — we’ve always said it’s part of self-selection that we want people to come because they believe it’s the right place, not for the highest check. Now having said that in the last few years, transition as systems has gone up. So we’ve had to make adjustments, but I mean we are rarely ever the highest offer. I mean, we rarely match the highest offer, and we still have a very good batting average. So but that’s part of the business.
Operator: Your next question comes from the line of Alex Blostein from Goldman Sachs. Your line is open.
Alexander Blostein: Hey, good evening, guys. Thanks for taking the question. I — Paul, I was wondering if you could just expand a little bit on the comment earlier to Bill’s point around building excess capital position and the fact that the last time you guys were over 12% Tier 1 leverage you went out and did a significant number of deals. So maybe articulate a little bit more what the M&A pipelines look like for the business today? And what areas within Raymond James look most interesting from an inorganic perspective?
Paul Reilly: Yes. Well, honestly, there’s a lot of opportunities in all of our business segments. We’ve been — we think there’s inorganic opportunities. The challenge is you just don’t know, somewhere on the market, many we keep in touch with and say, is this a good time for you to look at teaming with us versus competing with us. And I think during the last year with everything going on, discussions are up. Now when you can close those or when they’re actionable or — and frankly, in this market, we are just suffer a little bit from what our own M&A business does, that the sellers’ price expectations adjust much slower than the buyers do. So just taking our industry with cash sorting right? We’ve always said conservatively, we’d expect cash sorting to continue, which it has over the last year.
And many people are saying, well, cash sorting is over, and this should be our — this should be the EBITDA you value us on. So we just say no, we don’t think so. And so part of that sometimes solves over timing or part of that people say, well, at this valuation, we are not going to sell, and that happens in all the segments. But the number of dialogues are up, the interest, I mean, sustained dialogue, and some we walk from. Some they walk from some we just say, hey, maybe it’s not the right timing price wise, and that was no different than the dynamic a few years ago and then all of a sudden, for we were after for a while and to, we came out of the blue [ph] almost, so we found all closed. So we can’t predict that timing and don’t want to even try because there’s nothing concrete to predict it.
But when there’s enough activity, we want to make sure you have enough capital that if that time does come that you can execute.
Operator: Your next question comes from the line of Michael Cyprys from Morgan Stanley. Your line is open.
Michael Cyprys: Hi. Good evening. Thanks for taking the question. I wanted to come back to some of your comments on the recruiting backdrop. I was hoping you might be able to elaborate a bit on the competitive environment today versus, say, 6 or 12 months ago for recruiting? And how you might expect that to evolve if rates come down over the next year or two?
Paul Reilly: Recruiting, my 15th year, I think, in this role. I mean, since I’ve been everybody told me recruiting was going to slow down, and it’s just picked up. There the aging advisor there’d be no more advisors left and we see teams in their 40’s that have bigger books than we’ve ever seen before. So I think the recruiting potential is going to stay there. I think we have a unique value proposition given our size on one hand with — in our A ratings across the three rating agencies, our capital. On the other hand, allowing independents and freedom advisors to own their books so they can leave as they want to leave. The technology platform and well, we think is second to none, and that’s what the industry awards would say.
So you got to keep competing. And it hasn’t slowed down yet. Probably the biggest change in the competitive landscape has been RIA roll-ups that pay prices that we can’t quite figure out and it’s a bet on aggregating and being able to go to market at some point, even though those private multiples are much higher than the public multiples. So that’s a new competitor. It’s kind of lead price. Now people are selling their firms versus having people still kind of owning their businesses. So that’s the newest dynamic. And in an area which is I call a new competitor. But again, the advisors choice, right, how do they want to practice, that they want to own their business and get all the support of a leading technology for a great place if they want to sell their business at a pretty high multiple to roll up, so we are trying to aggregate and then monetize later.
I mean that’s certainly a viable market option that wasn’t really there in 3 years.
Operator: There are no further questions at this time. Mr. Paul Reilly, I turn the call back over to you for some final closing remarks.
