In the third quarter, Wachovia reports that the number of Series 7 brokers has stayed flat at 14,635. The number of bank, or Series 6, brokers, stands at 4,447, up 3 percent from the second quarter. The company says that it has seen "growth in high-producing [Series 7] FAs offset by lower-producing FA attrition."
Overall, the segment including registered representatives -- capital management -- reports that it had a loss of $499 million on $1.36 billion total revenue.
The amount of annualized revenue per broker is now $522,000, down some 9 percent from the second quarter and 24 percent from a year ago. Broker client assets stand at $1 trillion, a 9 percent fall from the previous quarter but a 24 percent jump from the same period of 2007. And managed account assets stand at $171 billion, an increase of 9 percent, which the company attributes to the A.G. Edwards acquisition and $7.7 billion in net inflows.
Total client assets are down 16 percent, despite a 24 percent drop in the S&P 500, according to the company.
Retail brokerage core deposits, also called FDIC sweep deposits, rose 75 percent year over year and included $23 billion from the A.G. Edwards deal and solid growth. Annuity sales have expanded 36 percent vs. 2007.
Total assets under management were $209.1 billion as of September 30, down 27 percent from December 31, 2007, driven by net outflows of $40.6 billion as well as $25.0 billion in lower market valuations, according to the company.
In terms of fees and other income, they are down $1 billion from the second quarter, but include some $931 million of market-disruption losses. Wachovia also reports that commissions are down 17 percent from the earlier period, as a result of lower retail-brokerage transaction revenue. Fiduciary and asset-management fees have declined 4 percent on declines in AUM, including lower market valuations.
With its merger with Wells Fargo set to take place later this year, Wachovia Corporation announced a loss of $23.9 billion. The company also says its integration of A.G. Edwards in St. Louis has been proceeding smoothly and is over 50 percent complete.
In addition, Wachovia announced that "its retail brokerage business increased in both the number and quality of financial advisors and generated solid cross-sales with other Wachovia businesses."
Robert K. Steel, CEO and president, explains, "Although this has been a challenging quarter, Wachovia's underlying businesses remain solid and our franchise exceptionally attractive. We look forward to the opportunities that lie ahead as we join forces with Wells Fargo."
Janet Levaux, MBA/MA, is the managing editor of Research; reach her at email@example.com.