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Technology > Investment Platforms > Turnkey Asset Management

Wirehouses Share Q2 Results

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UBS advisors in the Americas continue to improve their individual results and surpassed a key wirehouse rival when it comes to average fees and commissions per rep as of Q2’14.

“Wealth Management Americas delivered record revenues on invested assets that exceeded $1 trillion for the first time. Financial advisor productivity also reached an all-time high,” said UBS Group CEO Sergio Ermotti, on a call with shareholders.

However, UBS Wealth Management Americas also saw its client flows reverse course after 15 quarters of positive momentum, an indication of just how competitive the business remains.

In the period ending June 30, UBS Americas said the level of client assets topped $1 trillion for the first time. Net new money, though, turned negative; the unit had outflows of $2.5 billion “mainly due to client withdrawals associated with seasonal income tax payments,” the company said in a report.

“The quarter’s results need to be put in the context of WMA very strong net new money track record, with nearly $60 billion of net inflows over the last 16 quarters,” Ermotti explained on the call.

On average, UBS advisors in the United States and Latin America are producing more than their wirehouse rivals. They had $1.07 million in yearly fees and commissions as of June 30—outpacing advisors at Merrill Lynch (BAC), $1.06 million, and Morgan Stanley, $908,000.

Of course, there’s always room to grow: Merrill Lynch says that its experienced reps produce some $1.34 million in yearly fees and commissions on average.

In terms of average client assets per rep, the Merrill Lynch advisors are slightly ahead at an estimated $144.5 million. But the UBS reps are very close behind at $143 million.

Morgan Stanley’s advisors have about $123 million in average client assets, while those at Wells Fargo are averaging about $92 million.

Net asset flows in Q2 at Morgan Stanley were $12.5 billion vs. $12 billion at Merrill Lynch. Both wirehouses saw a slowdown in wealth-management flows from the prior quarter.

As for the total headcount of branded financial advisors, Morgan Stanley has 16,316; Wells has 15,189 (including some who work in banks); Merrill has about 13,485, while Bank of America-Merrill Lynch has a total of 15,560 reps, when those at U.S. Trust are included.

UBS Americas includes 7,119 FAs. The unit had operating income of $1.9 billion in Q2’14 and a pre-tax profit of $238 million ($246 million after adjustments).

“Consistent with our investor update message, we want to be the firm of choice for high-net-worth and ultra-high-net-worth clients and the financial advisor that serves them. That’s why high-quality advisors will always be central to the success of this business,” Ermotti shared.

“Therefore, our focus on FA retention remains relentless, and FA recruiting will continue to be highly selective,” he said.

Morgan Stanley’s wealth unit had pre-tax income of $767 million on net revenues of $3.7 billion. BofA’s wealth group reported pre-tax income of $1.15 billion on net revenues of $4.56 billion; Merrill’s sales represented $3.80 billion or about 83% of the broader group’s results, which includes the operations of U.S. Trust.

Wells Fargo’s Wealth, Brokerage and Retirement unit reported net income of $544 million and revenue of $3.6 billion; the retail brokerage had client assets of $1.4 trillion, and wealth-management assets were $221 billion.


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