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February 24, 2012 at 07:00 PM
Bank of America said in mid-January that it had net income of $2 billion, or $0.15 per share, for the fourth quarter of 2011 vs. a net loss of $1.2 billion, or $0.16 per share in the same year-ago period, meeting analysts’ expectations. Revenue, net of interest expense, grew 11% to $25.1 billion on a fully taxable-equivalent basis.
As of Dec. 30, BofA employed 17,308 financial advisors, an increase of 214 from the previous quarter and 1,697 over the previous year. Much of the growth came from the hiring of Merrill Edge advisors, who serve client households with $250,000 or less in investable assets. The company says that its advisor force has grown for 10 consecutive quarters.
In terms of net new assets, the global wealth operations of BofA had inflows of $5.49 billion in the fourth quarter vs. inflows of $1.92 billion in the third quarter and outflows of $2.4 billion in the year-ago period, which included flows associated with the sale of Columbia Management (on May 1, 2010).
For the full year, net new assets totaled $15.68 billion vs. outflows of $27.63 billion in 2010. Average sales (or fees and commissions) per advisor were $873,000 in 2011, up from $850,000 in 2010, excluding Merrill Edge advisors. For the quarter, however, average production per rep totaled $819,000 — a drop from $854,000 in the previous quarter and $913,000 a year earlier.
The global-wealth operations had net income of $249 million, which dropped $98 million from the third quarter and $70 million from the year-ago period due to lower market-driven revenue and higher expenses, the company said.
The unit also reported slightly reduced revenue for the quarter, both sequentially and for the year, which it blamed on lower investment and brokerage income “driven by suppressed 3Q11 market levels and lower transactional activity.” For the year, sales were $17.38 billion, a 7% jump from 2010.
Client account balances increased 3.5% during the quarter to $2.14 billion thanks to higher 4Q11 market levels and strong AUM flows, according to BofA. Assets held by Merrill Lynch clients totaled roughly $1.5 trillion, an increase of 3% from the third quarter and a drop of 1.3% from the same period of 2010.
Morgan Stanley
Morgan Stanley reported a loss from continuing operations of $227 million, or $0.14 per share, vs. net income of $871 million, or $0.44 per share, for the same period a year ago — topping analysts’ forecasts. The loss was tied to a $1.7 billion legal settlement and issues related to MBIA and credit-default swaps.
The company, led by James Gorman, said its revenue for the period fell to $5.7 billion from $9.9 billion in the previous quarter and $7.7 billion a year ago. Much of the decline was reported by the institutional-securities unit.
Its wealth-management unit saw its flows of net new assets drop about 60% from both the third quarter and the year-ago period to $6 billion. Flows in fee-based asset accounts were down 51% sequentially and 61% year over year to $4.9 billion.
Morgan Stanley, which says it moved to streamline the job descriptions of advisors and staff at its legacy Morgan Stanley and Smith Barney channels, had a pre-adjusted total of 17,156 financial advisors as of Dec. 30 — and 17,649 advisors after accounting for the adjustment.
Overall, its advisor force shrunk about 1% for the quarter (or by some 140 FAs) and declined roughly 5% for the full year (a drop of about 800 FAs). Morgan Stanley has instituted a series of job cuts in the past few years, which included the firing of low-producing reps.
The average yearly sales (or fees and commissions) per advisor were about $745,000 as of Dec. 30, a 1% increase from the earlier quarter and year-ago period.
Total assets in the wealth-management unit were $1.65 billion, a 5% jump for the quarter and 1% drop from the fourth quarter of 2010. Per advisor, assets under management are about $95 million, a slight increase from the earlier and year-ago periods.
“In 2011, Morgan Stanley’s wealth-management unit had global fee-based asset flows of $42.5 billion and net new assets of $35.8 billion, the highest for both since the inception of the Morgan Stanley Smith Barney joint venture,” the company said in a press release. “The year’s pre-tax margin improved to 10% from 9% a year ago,” it added.
In early 2011,Citi said its latest results included $43 million from brokerage and asset management sales, down from $136 million a year ago, largely reflecting a decline in the equity contribution from the Morgan Stanley Smith Barney joint venture.
