Good evening, and welcome to Raymond James Financial's Fiscal 2024 Third Quarter Earnings Call. This call is being recorded and will be available for replay on the company's Investor Relations website. I'm Kristie Waugh, Senior Vice President of Investor Relations. Thank you for joining us. With me on the call today are Paul Reilly, Chair and Chief Executive Officer, and Paul Shoukry, President and Chief Financial Officer. The presentation being reviewed today is available on Raymond James Investor Relations website. Following the prepared remarks, the operator will open the line for questions. Calling your attention to Slide two. Please note that certain statements made during this call may constitute forward-looking statements. These statements include, but are not limited to, information concerning future strategic objectives, business prospects, financial results, industry or market conditions, anticipated timing and benefits of our acquisitions, and our level of success in integrating acquired businesses, anticipated results of litigation and regulatory developments, and general economic conditions. In addition, words such as believes, expects, anticipates, intends, plans, estimates, projects, forecasts, and future or conditional verbs such as may, will, could, should, and would, as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements. Please note that there can be no assurance that actual results will not differ materially from those expressed in these statements. We urge you to consider the risks described in our most recent form 10K and subsequent forms 10Q and forms 8K, which are available on our website. Now I'm happy to turn the call over to Chair and CEO, Paul Reilly. Paul?

Thank you, Kristie, and good evening. Thank you for joining us today. Last week, Paul and I attended our Summer Development Conference for our employee advisors. It’s exciting to spend time with so many advisors who embody our client-first culture. We hear firsthand what makes Raymond James a great place for advisors who value the breadth of our technology and product platform so they can effectively serve their clients, and importantly, a firm that provides advisors the tools they need to grow their businesses. Paul and I appreciate the passion and dedication of the thousands of advisors who continue to serve their clients day in and day out. Turning to our quarterly results, we once again delivered strong results in the quarter. Our diverse and complementary business combined to generate record results for the first nine months of the fiscal year. We continue to invest in our businesses, our people, and our technology to help drive growth across all of our businesses. Beginning on slide four, the firm reported record fiscal third quarter net revenues of $3.23 billion, an increase of 11% over the prior year quarter, primarily due to higher asset management and related administrative fees. Quarterly net income available to common shareholders was $491 million, or $2.31 per diluted share. Excluding expenses related to acquisitions, adjusted net income available to common shareholders was $508 million, or $2.39 per diluted share. We generated strong returns for the quarter with an annualized return on common equity of 17.8% and an annualized adjusted return on tangible common equity of 21.9%, a great result, particularly given our strong capital base. During the quarter, we repurchased 2 million shares of common stock for $243 million, bringing our fiscal year-to-date total to 5.1 million shares for $600 million. Moving to Slide five, client assets grew to record levels during this quarter, driven by rising equity markets and solid advisor retention and recruiting in PCG. Total client assets under administration increased 2% sequentially to $1.48 trillion. Private client assets and fee-based accounts grew to $821 billion, and financial assets under management to $229 billion. Domestic net new assets during the quarter were $16.5 billion, representing a 5.2% annualized growth rate on the beginning of the period domestic PCG assets. Our robust technology capabilities, client-first values, and long-established multi-affiliation options continue to retain and attract high-quality advisors to the platform. This quarter, we recruited to our domestic independent contractor and employee channels financial advisors with approximately $92 million of trailing month production and $13.4 billion of client assets at their previous firms. Including RCS, we recruited client assets of $14.9 billion, making this our best quarter since 2021 in terms of recruited assets. Fiscal year-to-date, trailing 12-month production of recruited advisors is up 33%, and related client assets are up 52% over the prior nine-month period. These results do not include our RIA and custody services business, RCS, which also continues to have recruiting success and finishes the quarter with $167 billion of client assets under administration. We continue to experience growth in RCS from external joins as well as from internal transfers. This quarter, we reported record financial advisors of 8,782, and that does not include internal transfers to RCS of nearly 50 advisors, primarily all from one firm. While transfers to RCS lower the firm's advisor count, the client assets typically remain with the firm. Looking at fiscal year-to-date results, domestic net new assets were $47.7 billion, representing a 5.8% annualized growth rate on the beginning of the period domestic private client group assets, a strong result compared to the peer group. Total clients' domestic sweep and enhanced savings program balances ended the quarter at $56.4 billion, down 3% from March of 2024. We are pleased to see cash balances remain relatively flat in the quarter following fee billings paid in April. Bank loans grew 2% over the preceding quarter to a record $45.1 billion, primarily due to higher securities-based loans, as demand for C&I loans remains muted. Moving on to Slide six, private client group generated record quarterly net revenues of $2.42 billion and pre-tax income of $441 million. Year-over-year, results were bolstered by higher PCG assets under administration due to strong equity markets and net new assets brought into the firm. The capital market segment generated quarterly net revenues of $330 million and a pre-tax loss of $14 million. Net revenues grew 20% compared to a year-ago quarter, primarily due to higher debt and equity underwriting revenues. Sequentially, revenues increased 3%, primarily driven by the higher affordable housing investment revenues. Pre-tax loss in the capital market segment of $14 million reflects weak M&A results and the impact of amortization of deferred compensation granted in preceding quarters, which totaled approximately $20 million this quarter. While the timing of closings remains difficult to predict, we are still optimistic about our healthy pipeline and new business activity in M&A. We continue to expect investment banking revenues to improve along with an industry-wide gradual recovery. The asset management segment generated pre-tax income of $112 million on record net revenues of $265 million. Results were largely attributable to higher financial assets under management compared to the prior year quarter due to market appreciation and net inflows into PCG fee-based accounts. The bank segment generated net revenues of $418 million and pre-tax income of $115 million. The bank segment net interest margin of 2.64% declined just two basis points compared to the preceding quarter. Looking at the fiscal year-to-date results on Slide seven, we generated record net revenues of $9.36 billion and record net income available to common shareholders of $1.46 billion, up 9% and 12% respectively over the previous record set in the prior year. Additionally, we generated strong annualized return on common equity of 18.2% and annualized adjusted return on tangible common equity of 22.5% for the nine-month period. On slide eight, the strength of the PCG and asset management segment for the first nine months of the year primarily reflects the strong organic growth in PCG along with robust equity markets. And now, I'll turn the call over to Paul Shoukry for his remarks. Paul?

Thank you, Paul. First, I just want to echo Paul's comments earlier on how great it was to attend our summer development conference last week, as well as our elevate conference earlier in the quarter and visiting several branches over the past few months. We truly have a fantastic group of financial advisors and associates who put their clients first each and every day. Now turning on to Slide 10, consolidated net revenues were a record $3.23 billion in the third quarter, up 11% over the prior year and up 4% sequentially. Asset management and related administrative fees grew to $1.61 billion, representing 17% growth over the prior year and 6% over the preceding quarter. This quarter, PCG domestic fee-based assets increased 3%, which will be a tailwind for asset management and related administrative fees in the fiscal fourth quarter. Brokerage revenues of $532 million grew 15% year-over-year, mostly due to higher brokerage revenues in PCG. I'll discuss account and service fees and net interest income shortly. Investment banking revenues of $183 million increased 21% year-over-year and 2% sequentially. Compared to the prior year quarter, third quarter results benefited primarily from stronger debt and equity underwriting revenues. However, M&A and advisory revenues remained subdued. Moving to Slide 11, clients' domestic cash sweep and enhanced savings program balances ended the quarter at $56.4 billion, down 3% compared to the preceding quarter and representing 4.3% of domestic PCG client assets. So far in the fiscal fourth quarter, domestic cash sweep balances have declined about $1.25 billion, as cash inflows have partially offset quarterly fee billings of approximately $1.5 billion. Turning to Slide 12, combined net interest income and RJBDP fees from third-party banks was $672 million, down 2% from the preceding quarter. The bank segment net interest margin was relatively flat at 2.64% for the quarter, while the average yield on RJBDP balances with third-party banks decreased 18 basis points to 3.41%. The decline in third-party yield was primarily due to a mixed shift towards higher yielding sweep offerings. Based on spot rates at the end of the third quarter and current balances, we would expect NII and RJBDP third-party fees to be flat or perhaps down nominally in the fiscal fourth quarter. But of course, we are always monitoring the competitive environment, which has been notably dynamic in this space over the past few weeks. This guidance does not factor any incremental changes we may make to sweep rates based on these competitive dynamics or other factors. Moving to consolidated expenses on Slide 13, compensation expense was $2.09 billion and the total compensation ratio for the quarter was 64.7%. Excluding acquisition-related compensation expenses, the adjusted compensation ratio was 64.4%. Non-compensation expenses of $494 million increased 6% sequentially, largely due to a favorable legal and regulatory net reserve release of $32 million in the preceding quarter that did not recur in the current quarter. Generally, non-compensation expenses grew this quarter, as expected, to support growth across the businesses. For the fiscal year, we still expect non-compensation expenses, excluding provisions for credit losses, unexpected legal and regulatory items, or non-GAAP adjustments to be around $1.9 billion, consistent with our previous guidance. Slide 14 shows a pre-tax margin trend over the past five quarters. This quarter, we generated a pre-tax margin of 20% and adjusted pre-tax margin of 20.7%, a strong result, especially given the challenging market conditions impacting capital markets. These results are in line with the targets provided at our recent Analyst and Investor Day meeting in May. On Slide 15, at quarter end, our total assets were $80.6 billion, a 1% sequential decrease, as loan growth was offset by declines in cash balances and the continued runoff of the securities portfolio in the bank segment. Liquidity and capital remain very strong. RJF corporate cash at the parent ended the quarter at $2.1 billion, well above our $1.2 billion target. With a Tier 1 leverage ratio of 12.7% and total capital ratio of 23.6%, we remain well capitalized. Our capital levels continue to provide significant flexibility to continue being opportunistic and invest in growth. Slide 16 provides a summary of our capital actions over the past five quarters. During the quarter, the firm repurchased 2 million shares of common stock for $243 million at an average price of $122 per share. As of July 19, 2024, approximately $945 million remained under the board's approved common stock repurchase authorization. Going forward, we expect to continue to offset share-based compensation dilution and to be opportunistic with incremental repurchases. Given our present capital and liquidity levels, we currently expect to increase the pace of buyback activity, as we are committed to maintaining capital levels in line with our stated targets. Lastly, on Slide 17, we provide key credit metrics for our bank segment, which includes Raymond James Bank and Tri-State Capital Bank. The credit quality of the loan portfolio is solid. Criticized loans as a percentage of total loans held for investment ended the quarter at 1.15%, down from 1.21% in the preceding quarter. The bank loan allowance for credit losses as a percentage of total loans held for investment ended the quarter at 1%. The allowance percentage has trended lower, largely due to a loan mix shift towards more securities-based loans and residential mortgages, which account for 34% and 20% of the total loan portfolio, respectively. The bank loan allowance for credit losses on corporate loans as a percentage of corporate loans held for investment was 2% at the quarter end. We believe this represents an appropriate reserve, but we continue to closely monitor economic factors that may impact our loan portfolios. Now, I'll turn the call back over to Paul Reilly to discuss our outlook. Paul?

Thank you, Paul. I am pleased with our strong results this quarter, and looking forward, we are well-positioned with record levels of assets and bank loans starting off the fiscal fourth quarter. And while there is still economic uncertainty, I believe we are in a position of strength to drive growth over the long term across all of our businesses. In the private client group, next quarter's results will be positively impacted by the 3% sequential increase of assets and fee-based accounts. Our advisor recruiting activity remains robust, and I am encouraged by a record number of large teams in the pipeline. We are focused on being a destination of choice for current and prospective advisors, which we believe over the long-term should continue to drive industry-leading growth. In the capital market segment, we continue to have a healthy M&A pipeline and good engagement levels. But our expectations are for a gradual recovery and are heavily influenced by market conditions, and we expect activity to pick up over the next few quarters. And in the fixed income business, although we've seen some improvement in depository, results are still lagging historical levels. Depository clients continue to experience flat to declining deposit balances and have less cash available for investing in securities, putting pressure on the brokerage activity. We hope once rates and cash balances begin to stabilize and grow, we will start to see an improvement. Overall, despite some near-term headwinds, we believe the investments we've made in the capital markets business have us well-positioned for growth once the market and the rate environment become conducive. In the asset management segment, we remain confident that strong growth of assets and fee-based accounts in the private client group segment will drive long-term growth of financial assets under management. In addition, we expect Raymond James Investment Management to help drive further growth over time. In the bank segment, we remain focused on fortifying the balance sheet with diverse funding sources and prudently growing assets to support client demand. We have seen securities-based loan payoffs decelerate and demand for these loans increase as clients get more comfortable at the current level of rates. Corporate growth has been muted as market activity remains low. However, with ample client cash balances in capital, we are well-positioned to lend once activity increases within our conservative risk parameters. In addition to driving organic growth across our businesses, we also remain focused on corporate development efforts. While we prefer to deploy capital through M&A, we plan to increase the pace of buybacks as we continue to look for opportunities that may meet our disciplined M&A parameters. I expect you have several questions related to the industry news regarding cash sweep changes that have occurred over the past few weeks. We have been monitoring these emerging developments closely like you have, and frankly probably have some of the same questions. We are prepared to attempt to answer any questions you may have. In closing, we are well-positioned entering the fourth quarter with strong competitive positioning in all of our businesses and a solid capital and liquidity base to invest in future growth. I want to thank our advisors and all of our associates for their continued dedication to providing excellent service to their clients. Thanks for all you do. That concludes our prepared remarks. Operator, will you please open the line for questions?

Thank you. Your first question comes from the line of Michael Cho with JP Morgan. Your line is open.

Hi. Good evening. Thanks for taking my question. I will go ahead and start with a regulatory piece. Paul, you mentioned, you talked through the interesting comment in RJBDP, kind of doesn't include potential considerations to maybe changes in rates on sweep cash. You mentioned competition. Again, how would you characterize the current changes in the competitive environment from your view, from your seat? And is there a way to frame the magnitude or even type of response by running a game, whether it's either competition or regulatory on the spot? Thanks.

Yes, let me start. The other Paul, the two Pauls here, but let me start by saying first. People are talking about, well, what's the difference to this program, that program? Our sweep programs are very, very different. So I want to set a stage first that if you look at our sweep programs, we offer from 25 to 300 basis points; the programs that people have been talking about offer one basis point to 50 basis points. So we start off with a whole different value proposition. We have $3 million of FDIC per individual or $6 million joint in the sweep. We have also in our programs, very competitive money market funds or institutional class available to everyone irrespective of the size of investments. And you can see how those have grown dramatically. We have enhanced savings program, again, offering high rates and up to $50 million of FDIC insurance, which you've also seen grow. And our advisors and clients, if you look at the shift, have taken appropriate actions to invest the money. So I don't know what's happening in some of the other programs. I can tell you ours are well thought through, we think are very compliant. And as we look at the announcements and changes, they're not very specific yet, right? So we've prided ourselves, subject to criticism, even from this group, maybe at times for having such high sweep rates. But we've done it because we believe both it's the right thing to do. And it's regulatory, that was compliant with what we understand. So we're going to have to look at movements and each of the movements have been a little different. We don't know totally what they apply to. So, we don't see anything that we know of today that's forcing us to change rates, but we meet weekly and we're going to be competitive. So that was more of an unknown comment, Paul saying, if things happen, we're going to adjust. But as of today, we're looking at stuff, but with no current plans.

Okay, great. No, thanks for the clarification and some of the thoughts there. I guess just for my second question, I just want to zoom out and ask a broader business question and kind of trajectory for Raymond James ahead. I mean, as you talk through you continue to hit record assets, record revenue, record bank loans, and I realize you have some margin targets out there for the broader company. And clearly there's some aspects and nuances happening in real-time as you just talked through, Paul. But I'm just curious, how would you frame the trajectory for operating leverage in the business, as this backdrop continues to reach record levels for Raymond James despite maybe some rate normalization ahead?

Yes, I think that, you know, the operating leverage, as we grow assets, we believe we can accomplish it. There were, you know, a number of factors. We certainly have the whole industry has had a strong equity market, maybe until the last week or two, but in cash spreads have also continued to support the businesses. But we believe that as we grow, and especially our use of technology in the back office, and I know that's one of Paul's key focuses as we transition over this next year to double down on that, we believe we can get operating leverage and still be able to keep our very high levels of support. So our advisors and our latest survey gave us a 95% satisfaction rate, almost 60% net promoter score on service. So we believe that's a hallmark, but we believe with technology, we can make it better and easier for them as we continue to spend more money on that part of the service and the reason better service, but also much better leverage.

Hey, good afternoon, Paul and Paul, how are you?

Good, Devin.

Good. I'll ask another one on the advisory cash rates. Sounds like some of what's going on in the industry is news to you guys as well as you're following along. And so, I guess just what I'd love to know if you can, like what percentage of fee-based accounts is in cash at the kind of the lowest rates? And then, just also trying to understand competitive reasons that could drive kind of a change in your thinking, because obviously one of the firms that's moved, you made their changes in April, which I'm assuming you guys probably, as you evaluate frequently, you probably saw that then. So just trying to think about what else could competitively change your view, especially now that the vast majority, if not all of the yield-seeking cash has already been moved on to those higher yielding alternatives for customers as advisors should have already done?

Yes. So if you look at our advisory sweeps, we'll just focus on those. It's about 2.5% of those assets are in cash and to us that's frictional cash. You can't find an institutional portfolio or anyone that doesn't have some cash in it at those levels for trading, for paying fees, for whatever you do in them. So we view that as frictional or spending cash. The average cash amount in those accounts are $8,900. I mean, so I don't know where you go to a bank and get kind of our sweep rates at that amount of cash. So the other thing, if you look at those accounts and you can tell the shift, because before rates started moving, it was just cash in those accounts. Total money markets, CDs and treasuries are $22,600 for those accounts. I'm sorry, the money markets, CDs, treasuries combined are $22,600 in the account. So you can see it's much more invested, certainly on higher yield instruments. So, we believe that at $8,900, 2.5%, that's a very low rate of cash to have sitting for transactions. So, we think it's, you know, we're putting clients' money to work with those numbers.

Right. Exactly. So I guess that's kind of my, I guess the root of the question that you've already seen that move. It’s a very small amount that you are playing a higher rate than some other programs, as you mentioned already. So competitively from here, we don't know exactly every action that's happened, but just the catalyst to actually make meaningful change after you're already in the position that you're in as you just described, Paul?

I think the forces that could be happening if there was a squeeze on cash in the industry, where would you get the cash? You would offer higher rates to get it out of treasuries and money market funds and whatever. I think that cash has seemed to have stabilized pretty much everywhere. Starting to anyway, who knows where that goes? We have a very clear buffer still for operating our business. But I think a demand for cash or if rates go up, you start to see, that would pressure. But if rates go down and there's plenty of cash, I don't see what really squeezes that outside of following the market as rates fall. So I don't see anything else barring some unusual thing in the industry.

Yes, that's very helpful. Thank you, Paul. I have a quick follow-up regarding loan growth, and it's great to see the demand for securities-based loans that you mentioned. I'm curious if, as you observe a change in appetite and comfort levels with current rates, you expect this trend to continue and support further loan growth. That's the essence of my question.

Hello, Devin. Paul Shoukry here. It was encouraging to see the growth in securities-based loans this quarter. I believe this improvement is largely due to the slowdown in payoffs and paydowns since interest rates began to rise, which had previously hindered loan growth in the SBL portfolio. As that pressure has eased, borrowers are becoming more accustomed to the new interest rate levels and are starting to use their lines of credit and borrow more from their SBL accounts. We are cautiously optimistic that this trend may persist moving forward. In the long term, we remain very positive about the growth potential of securities-based loans, viewing it as an appealing product for clients. While we anticipated some challenges due to the rapid increase in rates as clients adjusted, we are increasingly optimistic about continued growth in that area.

All right. Thanks so much.

Thanks, Devin.

Hi, good evening, Paul and Paul. I have a detailed question regarding advisory sweeps. There has been some speculation that at least one competitor may be facing regulatory scrutiny regarding cash disclosure, which is noted in their filings. Consequently, we and others are examining these cash disclosures more closely. Your disclosures indicate that Raymond James shares a portion of the revenue from sweep options with the advisor. While you have a strong reputation for prioritizing clients, as conflicts are scrutinized more intently, is there a concern that this compensation method for advisors might create an inherent conflict? How should we consider this moving forward?

No, that's a great question. Let me explain the disclosure first. In advisory accounts, cash payments to advisors are no different from those for any other asset class. For example, if an advisor has a million-dollar account charging 1%, they earn $10,000 in fees regardless of whether there’s cash or not, and this remains the same whether there is 5% cash or zero cash. There are no indirect incentives, trips, rewards, or points. Advisors have no incentive in advisory accounts other than to act in the best interest of their clients. I assure you, there is nothing from the home office that prompts advisors about this, as they are expected to do the right thing for their clients. We also have supervision in place to ensure compliance. We have a dedicated group of advisors, and their actions confirm they are operating appropriately. The disclosure addresses some limited matters on the brokerage side. For instance, we have had fundraising programs like the ESP program, where advisors can be rewarded for directing clients to high-rate money market accounts, but they receive no compensation on low-rate accounts. Their only incentive is to guide clients toward these higher-rate accounts, with no earnings on low-rate accounts. Therefore, brokerages may view it as a more favorable option if investors choose high-rate accounts. This approach does incur higher costs for us, so we see no conflict in this arrangement. The limited disclosures are there to clarify this, as regulators prefer to have a clear understanding of the compensation structure, even though it is a nuanced scenario, primarily focused on high-rate programs.

No, that's really helpful, very fulsome response, Paul, so thank you. One point I just wanted to clarify, because you specifically mentioned it's not part of the advisor program, which is consistent with what we saw too. But it also notes that you don't share comp directly with the financial advisor, but the aggregate amount of cash gets credit to the overall payout rate and can cause your FA to receive higher comp on transactions and other unrelated activities. It's vague, I don't know what those activities could be, but if you could provide some context around that as well, just give in the focus on this issue?

Yes, when considering the focus on cash, that's the only aspect I can think of where there’s any compensation related to cash, either directly or indirectly. It’s limited to those very small investment vehicles like ESP that we've introduced into brokerage. Beyond that, there’s nothing else. Advisors have opportunities related to asset growth and bringing in new assets, but those are unrelated to cash. If they do bring in new assets, we have a program that can benefit advisors, but it does not revolve around cash.

All right, I understand. That's very helpful, color. If I could just squeeze in one more quickly, just Paul Shoukry, on the flat spread revenue guide was a bit better than we had anticipated, so certainly nice to hear. I was just hoping you can unpack some of the factors to support the flat spread revenue quarter on quarter, just given there's been some upward pressure on funding costs, tail end of sorting, but still some incremental sorting, however modest. So I was hoping you could provide some context on what some of the key assumptions are underpinning that?

Yes. So kind of offsetting some of the funding cost pressures that you're describing there is a loan growth that we experienced throughout the quarter and the continued asset growth that we would hope to experience going forward, so that's, we said flat or maybe down nominally, but that's what's driving that guidance.

Thanks, good evening. I guess one more question on this, just in terms of the competitive backdrop. Does your evaluation period, does this imply that you need to see additional changes across the industry for you to potentially react, or are you still digesting these most recent moves and need to get more color on what they exactly were?

I think are we digesting? Sure, we're watching, but I mean, I don't. Again, we don't anticipate anything. We, you know, as you learn things, you might make tweaks here or there, but we're just going to have to see what plays out as what we know today. But we'll talk about it in our next cash meeting, but we have no plans going in to make changes at this point, but that doesn't mean we won't.

Understood. And then just in terms of the backlog around recruiting, you mentioned record backlog of large teams, that's a comment I think you've been making for several quarters. So just curious if there's additional context thinking, given the strong net new assets in the quarter, the funding, kind of bringing onboarding that you're seeing versus the replenishment of that backlog, if there's any other additional color that would be helpful?

Yes, we've been, the recruiting is actually backlog has been picking up. It's extremely strong. I've said the last few quarters, we're not surprised by it anymore, but we were surprised by the large number of $5 million, $10 million, even $20 million teams. It's continuing and we continue to get new ones, both joining, committed and in the pipeline that I think we're competing very, very well for. So the recruiting activity remains strong and we're still very optimistic on it. And I think we're we don't see anything right now that's slowing down the pace, so that's been really good news for us.

Good morning, Paul and Paul. Sorry. Good afternoon. It's been a rather long day. Sorry about that. I'm going to I'm going to start with another question somewhat related to this sweep. Is it possible for you to identify what portion of your advisory assets or the advisory assets, I should say, on the Ray J platform where Ray J is considered a fiduciary?

There's so many words. There's so many terms in fiduciary, right? There's a risk of fiduciary, there's best interest, there's, you know, and they all have different responsibilities and rules and everything else. So I don't know the best number we could give.

I mean, what we could say is that within fee-based, all fee-based accounts, we have about $15 billion of cash sweep balances and that excludes the custody business. And then, within that, to Paul's point, it's very, there's some risk of fiduciary, there's some other types of programs within that, but that's all fee-based accounts. Some of those accounts are managed by us, some are overseen by advisors with discretion, and others are managed by advisors without discretion who need to get client approval for everything. That's the total number if you look at it.

Thank you for the question. I would like to revisit the industry discussion regarding changes in sweeps. I am curious about how you envision the potential evolution of customer payment methods for services, moving away from cash sweeps over time. How might customers pay differently for services in a future scenario, say 10 or 20 years from now? Additionally, how could you capture the economic value for the services provided? What other methods might be available to extract value?

There are many potential ways to evolve the payment structures for services, and it's difficult to predict exactly how that will happen. Historically, growth and income have come from fees and other charges, but those have decreased in importance over time. Asset-based fees are increasingly common, particularly in comparison to broker-dealer pricing, and various factors, including regulatory considerations, will influence future developments. Performance fees could also be a possibility. While there are discussions about consulting or hourly rates, many clients prefer not to receive detailed bills akin to those from lawyers or accountants, particularly because the relationship with an advisor encompasses much more than just investment advice. Advisors play a significant role in clients' lives through providing guidance, and while payment methods may shift, the importance of these relationships won't diminish. In some countries, such as the UK and Australia, clients face direct charges which makes fee structures very transparent. The industry will continue to adapt in this competitive and mature environment, as we've already had to adjust to changes like zero interest rates and fluctuating rates. Looking forward a decade, it feels like a long time—perhaps due to my age—but I'm confident that adjustments will be made as necessary.

Yes, I mean, the initiative itself, we have some levers on and around, largely rate, right? So to the extent that we want to continue bringing in cash from the outside, rate is a big lever. We actually just announced that we're reducing the rate on the high-yield portion of the program that brings in the new cash from the outside, because we have pretty big buffers now with over $17 billion of cash swept to third-party banks that we can reposition and bring on to fund our own bank over time. So, it really just depends on how much of the initiative that we want to continue to pull in that we actually, again, just announced that we're reducing the rate. It's still very attractive, higher than 5%. But we're not going to, again, declare the completion of any type of trend until we have several quarters of history. Otherwise, it's just speculation.