Merrill vs Morgan: Q2 Earnings, Wealth Results

The two wirehouses share their advisor tallies, profits, fee-based assets and more in their latest reports

Making comparisons between two companies can often be a bit tricky. Such is the case when looking at the second-quarter results of Bank of America-Merrill Lynch and Morgan Stanley.

Still, looking at the numbers does shed light on how the firms are performing in different areas.

Which group has more money?

Merrill Lynch advisors have about $2.2 trillion as of June 30, 2017, vs. $2.24 trillion at Morgan Stanley.

But when assets at US Trust are combined with those of Merrill, the Bank of America Global Wealth & Investment Management group, the unit has some $2.62 trillion.

(Related: 13 Best & Worst Broker-Dealers: Q1 Earnings, 2017)

Which group has more advisors?

Morgan Stanley has 15,777 in its advisor ranks vs. 14,811 at Merrill Lynch. If Merrill’s consumer banking advisors — which number 2,206 — are included, its ranks swell to 17,017.

Merrill says it added 254 reps in the latest quarter and is up 231 from a year ago, while Morgan Stanley says its headcount was flat vs. the earlier period and is down 132 from a year ago.

How about average fees and commissions?

Morgan Stanley’s advisors have 12-month-trailing production of $1,050,00 as of June 30 vs. $1,040,000 for Merrill’s Thundering Herd. But Merrill also shares the performance of its veteran advisors (which excludes the production of the 3,000 reps in its training program): $1,350,000.

Morgan Stanley says the average level of assets per advisor is $142 million. Merrill doesn't provide that figure. 

Which firm is better in terms of total revenues, net income and profit margins?

Morgan Stanley Wealth Management had sales of $4.15 billion in Q2’17 vs. $3.87 billion for Merrill Lynch and $4.70 billion for BofA Global Wealth (which includes US Trust).

Net income before taxes was $1.29 billion for the BofA wealth group vs. $1.06 billion at Morgan Stanley. (Merrill Lynch’s specific net income figures are not released by Bank of America.)

This gives the BofA wealth group a pre-tax margin of 28% vs. 25% at Morgan Stanley.

Post-tax net income at BofA’s wealth group was $804 million (up 14% from last year) vs. $665 million at Morgan Stanley (up 29% from a year ago).

What about fee-based assets?

Bank of America Global Wealth & Investment Management has fee-based assets of $991 billion vs. $960 billion for Morgan Stanley.

As a percent of total assets though, Morgan Stanley is at 43% fee-based vs. 38% for the BofA wealth group.

How about asset flows?

In the second quarter, BofA wealth had net client inflows $27.5 billion. Morgan Stanley shares only its fee-based flows, which it said were $19.9 billion in Q2’17.

What about loans?

BofA says its wealth-management group clients had a total of $156.3 billion in loans and leases, which include margin receivables.

Morgan Stanley Wealth Management clients’ loan balances stood at $77 billion as of June 30.

And net interest income?

BofA wealth’s total was $1.60 billion in Q2’17 vs. $1.01 billion at Morgan Stanley.

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