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October 22, 2008 at 08:00 PM
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 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, which is 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.
Overall, total client assets are down 16 percent, despite a 24 percent drop in the S&P500, 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 vs. 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, due to 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 announced the following corporate results for the third quarter of 2008:
- A net loss of $23.9 billion includes the following on a pre-tax basis: $18.8 billion of goodwill impairment; $4.8 billion credit reserve build to a 3.24 percent reserve-to-loan ratio; $2.5 billion of market disruption losses including $1.2 billion of securities impairments; $310 million principal investing loss;
- The latest results reflect costs relating to previous announcements on the auction rate securities settlement, support of Evergreen money market fund exposure to Lehman Brothers and losses on government sponsored entity preferred stock, amounting to $1.1 billion; and
