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Wirehouses Post Q3’14 Results

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Bank of America’s Global Wealth and Investment Management unit, which includes Merrill Lynch and U.S. Trust, reported net income of $813 million vs. $720 million in the third quarter of 2013 and $726 million in the prior quarter. Revenue increased about 1% from the year-ago quarter and 7% from Q2’14 to nearly $4.7 billion.

The group’s pre-tax margin was 27.4%, up from the year-ago margin of 25.5%, marking the seventh straight quarter over 25%. Client balances increased 8% from the year-ago quarter to $2.46 trillion.

Third-quarter 2014 long-term assets under management (AUM) flows were $11.2 billion. AUM was $888 billion. GWIM says it “successfully completed the national rollout” of Merrill Lynch One, an investment-management platform with a single view of clients’ holdings across their accounts. As of Sept. 30, 2014, the platform included over $157 billion of AUM.

As for its advisor headcount, BofA says it has some 15,868 advisors—up from 15,560 in the prior quarter and 15,624 a year earlier. Excluding advisors in the consumer and business-banking segments, the group includes 14,000 registered reps, an increase of 155 from last quarter.

As of Sept. 30, 47.3% of Merrill Lynch advisors “had 50% or more of their client assets under a fee-based relationship,” the group reports.

Merrill Lynch advisors had average yearly fees and commissions of $1.077 million as of Sept. 30, 2014, up from about $1.06 million as of June 30, 2014, and $1.0 million as of Sept. 30, 2013. Veteran advisors have annual production of about $1.4 million.

Morgan Stanley

Morgan Stanley’s Wealth Management net revenues were nearly $3.8 billion in the third quarter, a 9% jump from a year ago and a 2% increase from the prior quarter. Net income improved 17% year over year and 6% from Q2’14 to $501 million. This bumped the group’s pretax margin up to 22% vs. 21% in Q2’14 and 19% in Q3’14.

As for advisor headcount, Morgan Stanley had 16,162 registered reps as of Sept. 30, a slight drop from 16,316 in Q2’14 and 16,517 in Q3’13. Advisors have an average asset level of $124 million. Their average yearly production level (or fees and commissions) stands at $932,000 vs. $908,000 as of June 30 and $848,000 a year earlier.

Fee-based asset flows for the quarter were $6.5 billion, down nearly 50% from the prior quarter and almost 60% from last year. Securities-based lending, though, grew close to 50% from last year to $20.3 billion in Q3’14, while residential real estate loans improved roughly 60% year over year to $14.3 billion.

Morgan Stanley advisors’ fee-based assets of $768 billion represented about 38% of total client assets, which topped $2.0 trillion at quarter-end.

Wells Fargo

Wells Fargo’s Wealth, Brokerage and Retirement unit reported net income of $550 million, up 22% from last year and 1% from the prior quarter; its revenue increased about 7% year over year to nearly $3.6 billion.

The retail brokerage group’s client assets jumped 8% from the prior year, reaching $1.4 trillion in the third quarter, and managed account assets increased 17% to $409 billion. The bank also reported strong loan growth; average balances grew 19% year over year in first mortgage and security-based lending.

Wells Fargo said it had a total of 18,772 registered representatives as of Sept. 30—up from 18,661 in the prior quarter. Its level of client assets is $1.4 trillion.

Of this group, 15,163 are financial advisors, down from 15,189 as of July 30. The majority of these reps—10,178 work at Wells Fargo Advisors branch offices. About 3,210 work in bank branches, with the remainder—1,774—working as independent Wells Fargo Financial Network (or FiNet) reps.

The group also includes 3,609 licensed bankers and 76 clearing firms. The number of bankers rose from 3,472 in the prior quarter, while the number of clearing firms declined by one.


In the Americas, UBS’ wealth-management business had total sales in Q3’14 of $1.92 billion, up 10% from a year ago. Profits improved about 17% year over year to $254 million.

In the United States, Canada and Latin America, UBS’ operations included 7,114 financial advisors, down five from the prior quarter and down 23 from a year ago.

The Americas reps brought in $4.8 billion in net new assets vs. outflows of $2.5 billion last quarter and inflows of $2.1 billion in Q3’13. Including interest and dividend income, the group had new assets of about $10.5 billion, vs. $3.2 billion in the prior quarter and $7.5 billion in Q3’13.

Yearly revenue per advisor in the Americas (or average annual fees and commissions) stands at $1.079 million, up 1% from $1.068 million in 2Q’14 and up 9% from $994,000 in 3Q’13. Invested assets per FA are currently $143 million, unchanged from the prior quarter and 11% higher than a year ago.

Total client assets for the UBS Americas’ wealth unit are $1.067 trillion, down 1% for the quarter but up 10% year over year. Invested assets total $1.016 trillion.

The group says that loans extended to advisors as part of recruiting deals are about $3 billion, while other loans to advisors total $388 million. These figures were roughly flat compared with the prior period.