From the June 2012 issue of Research Magazine • Subscribe!

Major Firms See Assets, Fees Rise in Q1 ‘12 But Post Mixed Results for FA Headcounts

For the first quarter, Bank of America said the total number of financial advisors rose to 17,512 from 17,308 in the prior quarter and 15,797 in the year-ago quarter. Average trailing 12-month production, or fees and commissions in the quarter, were $905,000 per advisor, up from $881,000 in the fourth quarter of 2011 but down from $1,005,000 in the first quarter of 2011.

The Global Wealth and Investment Management unit, which includes the Merrill Lynch and Merrill Edge advisors, had net income of $547 million, which was slightly above last year’s figure and up sharply from $257 million in the fourth quarter.

Revenue for the unit dropped to $4.4 billion, an increase from $4.2 billion in the prior quarter but down from $4.5 billion a year ago. Merrill reps produced about $3.7 billion in sales for the unit. Client assets stood at roughly $2.2 trillion, with $1.84 billion managed by Merrill Lynch advisors.

Morgan Stanley

Morgan Stanley reported that its advisor force dropped 2% from last quarter and 5% from last year to 17,193, while total assets under management hit nearly $1.75 trillion, a jump of 7% from the previous quarter and a 2% increase from last year. (It had 17,512 advisors in the fourth quarter of 2011 and 18,124 in the first quarter of 2011.)

These reps produced average trailing-12-month fees and commissions of $787,000 and managed average client assets of $101 million; these figures were both up about 5% from the same year-ago period.  

Morgan Stanley’s global wealth-management business, which includes the MSSB joint venture, reported net revenue of $3.4 billion. Its pre-tax profit margin of 11% was up slightly from a year ago and from the previous quarter.

Net income, which excludes Citi’s 49% stake in the MSSB venture, was $193 million, up 5% from last year and a jump of 45% from the previous quarter.

“This quarter is further evidence that Morgan Stanley has rebounded from the financial crisis of 2008 and is in a significantly stronger position,” said Chairman and CEO James P. Gorman, in a statement. “Revenues of $8.9 billion, excluding the impact of [the $2 billion debt valuation adjustment], were higher on both a year-over-year and a quarter-over-quarter basis.”

As for the wealth-management unit, “We are intensely focused on completing the transition of Morgan Stanley Smith Barney to the new, state-of-the-art technology platform this summer,” Gorman said.

Wells Fargo

Wells Fargo saw a rise in assets and a drop in both financial advisors and income. The wealth, brokerage and retirement unit includes 15,134 financial advisors as of March 31. This figure is down 1% from last quarter and from last year, and includes 10,987 advisors in the traditional brokerage channel.

Client assets including deposits for the full unit were $1.4 trillion, of which $1.2 trillion are part of the retail-brokerage operations, a 6% increase from the previous quarter. Wealth, brokerage and retirement had net income of $296 million, a 5% drop from the earlier quarter and a 14% decline from the year-ago period.

Revenues for the unit grew 1% from 4Q, and excluding a gain from the sale of H.D. Vest in the fourth quarter, jumped 6%, the company said, thanks to higher retail brokerage asset-based fees, transaction revenues and securities fees.

Managed-account assets grew 10% from last quarter and 11% from last year, driven by strong net flows and market performance.


UBS said Wealth Management Americas had a record pre-tax profit jump of 34% to $209 million vs. last year, as net new money more than doubled from the previous quarter to $4.6 billion; it was $3.9 billion a year earlier.

Net new money in the Americas unit, which is led by Bob McCann, including income from interest and dividends — a measure widely used by other wirehouse firms — was $9.3 billion vs. $8.6 billion in the earlier quarter and $8.5 billion a year ago.

The number of UBS advisors in the Americas rose to 7,015 as of March 31 from 6,967 on December 31 and 6,811 a year before.

The advisors had total client assets of $851 billion in the first quarter of 2012 vs. $795 billion in the fourth quarter of 2011 and $818 billion in the first quarter of 2011.


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