From the June 2014 issue of Research Magazine • Subscribe!

Wirehouse Fees & Commissions: Who’s on Top?

One big firm surpasses its rivals by a very comfortable margin when it comes to both advisor productivity and average AUM

Executives at the wirehouse broker-dealers tend to focus their public speeches and interviews on how they are cutting costs and raising profits, while staying competitive.

However, a close look at the four firms’ wealth management results shows one clear leader when it comes to average fees and commissions per advisor, a statistic that industry observers keenly watch, in the first quarter of 2014. In addition, this same wirehouse beats rivals on another important metric: average client assets per rep.

Wirehouse advisor performance, Q1 2014. Source: Company Earnings ReportsAs of March 31, financial advisor productivity, or yearly fees and commissions, at Bank of America Merrill Lynch (BAC) was $1.3 million per experienced advisor (advisors who have gone through a roughly 3.5-year practice development training program or were hired as experienced advisors).

Total FA productivity, including those who haven’t finished the training program but excluding those in Consumer Business & Banking and with U.S. Trust, is roughly $1.06 million in the first quarter, up from $1.04 in the fourth quarter of 2013 and $971,000 in the first quarter of 2013. “As of March, 45% of our advisors had 50% or more of their client assets under a fee-based relationship,” the bank said in a statement.

The total level of client assets in Merrill Lynch accounts was $1.95 trillion vs. $1.92 trillion in the prior quarter and $1.81 trillion a year ago, and the group's revenue for Q1 was $3.76 billion, compared to $3.70 billion in Q4’13 and $3.68 billion in Q1’13.

With some 13,725 reps, average client assets under management at Merrill is roughly $142 million.

Morgan Stanley, Wells, UBS

In the most recent quarter, Morgan Stanley (MS) had 16,426 advisors, unchanged from the prior quarter. These reps had average yearly fees and commissions (or production) of $881,000 — putting them in the No. 2 spot.

Average client assets per Morgan Stanley rep is $118 million.

UBS Wealth Management Americas' (UBS) advisor headcount is 7,113, down slightly from 7,137 in Q4’13 and up 1% from 7,065 in Q1’13.

Annualized revenue per financial advisor stands at roughly $1,037,000, compared with $1,042,000 in Q4’13 but up 8% from $961,000 in Q1’13. Invested assets per financial advisor increased to $139 million, up 2% from $136 million in Q4’13 and up 10% from $126 million in Q1’13.

As of Q1’14, Wells Fargo Advisors (WFC) has 15,146 registered reps — down 134 from the prior quarter.  It also has total client assets of $1.4 trillion, which includes assets managed by licensed bankers.

The bank does not release its production-per-rep data. Taking its overall asset figure and dividing that by its rep headcount, the average asset level per advisor comes to about $92 million.

IBD Comps

In the first quarter, independent broker-dealer LPL Financial (LPLA) reported that its operations include 13,726 affiliated advisors.

Average fees and commissions per rep are about $252,000 vs. $254,000 in the prior period and $230,000 a year earlier. Average assets managed by advisors jumped 13.5% to $33 million per rep vs. $29.5 million a year ago.

Ameriprise Financial (AMP) says it has 9,704 affiliated reps; 2,155 reps are employee advisors, while the remaining 7,549 are independent. Average annualized fees and commissions per advisor were $454,000 on March 31, a jump of 15% from last year's $395,000. 

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Check out 12 Best & Worst Broker-Dealers: Q1 Earnings, 2014 on ThinkAdvisor.

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