Q4 Results Posted

Also, the unit had solid loan growth, with average balances up 21% “largely due to growth in nonconforming mortgages and security-based lending.”

Wealth-management client assets stood at $225 billion as of Dec. 31, up 5% from the prior year. These operations also had loan growth improvement, with average balances up 10% year over year.

Wells Fargo had 19,039 registered representatives as of yearend vs. 18,722 as of Sept. 31. This includes 15,187 financial advisors, up from 15,163 in the prior quarter.

Of these total FAs, 10,119 work at Wells Fargo Advisors branch offices, while 3,324 work in bank branches. The remainder—1,744—are independent reps with Wells Fargo Financial Network (FiNet) or First Clearing. The group also includes 3,852 licensed bankers and 74 clearing firms.

In early February, Wells Fargo Advisors named Jim McHale to the post of chief compliance officer. He reports to Bob Mooney, chief compliance officer of Wells Fargo’s Wealth, Brokerage and Retirement.

Before joining Wells Fargo, McHale worked on an enterprise compliance program at E*Trade. Earlier, he was assistant general counsel for the Securities Industry and Financial Markets Association (SIFMA).

“Jim is an exceptional addition to our team,” said Mary Mack, president and head of Wells Fargo Advisors, in a statement. “He has the skills, perspective and leadership required to help WFA thrive in an increasingly complex and demanding regulatory environment.”

UBS

UBS said fourth-quarter results in the group’s wealth-management operations in the Americas included operating income of $1.924 billion in Q4’14, up slightly from $1.919 billion in Q3’14 and an increase of 4% from $1.852 billion in Q4’13.

The company pointed to a drop in fee-based income. “Recurring net fee income decreased by $10 million to $1,187 million, mainly due to lower mutual fund fees partially offset by higher managed-account fees,” it explained in its earnings report. Transaction-based income, though, improved by $7 million to hit $448 million in the fourth quarter, thanks to “slightly higher” client activity.

Still, Wealth Management Americas’ adjusted operating profit before taxes was $217 million, a drop of 15% from the same year-ago period and from the prior quarter.

The Swiss-based firm says the profit drop stemmed from a nearly $30 million jump in personnel expenses, which totaled about $1.4 million in the fourth quarter.

“The increase was mainly due to higher financial advisor compensation … and higher variable compensation expenses,” it said in its earnings report. “Expenses for compensation commitments related to recruited financial advisors increased by $4 million to $187 million.”

UBS has a need to focus on recruitment. Its advisor headcount in the Americas was 6,997 as of Dec. 31, down 1.5% from 7,114 in the third quarter and a decrease of 2% for 7,137 a year ago.

The firm, though, says the drop in reps is “consistent with our stated strategy of retaining and attracting the top producers in U.S. wealth management and keeping our advisor force in the 6,500–7,000 range.

Plus, it says that “more than two-thirds of the advisors who left UBS were in the lowest-producing two quintiles or not ranked at all.”

Of the total veteran advisors recruited in Q4, three-quarters “were ranked in the top two quintiles,” UBS adds.

Average production, or fees and commissions per advisor, stood at $1,091,000 in Q4’14, up 1% from $1,079,000 in Q3’14 and up 5% from $1,042,000 in Q4’13. Averaged invested asset per advisor reached $147 million in Q4, a 3% rise from the earlier quarter and an 8% jump from a year ago.

Total client assets reached $1.032 trillion as of Dec. 31, a jump of 2% from the prior period and 6% from a year ago. Net new money (or NNM) for the period was $5.5 billion vs. $4.9 billion in Q3.

“Including interest and dividends, NNM was $15.9 billion in Q4’14, up 51% from $10.5 billion in Q3’14. The increase in NNM was driven main by advisors with UBS longer than a year (‘same-store advisors’),” UBS said in a statement.