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Wirehouses Post Q1’15 Results

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The wirehouse broker-dealers recently issued their first-quarter financial performance. Morgan Stanley Wealth Management said its net income improved 27% from the prior quarter to $535 million; however, this represents a drop of 71% from last year (when the group had an unusual income-tax benefit).

The number of advisors with the firm stands at 15,915, down from 16,076 in Q4’14 and 16,426 in Q1’14. The average level of yearly fees and commissions per rep, though, has improved to $959,000 vs. $944,000 in the earlier period and $878,000 in the year-ago quarter.

Client assets total $2.05 trillion, with fee-based assets representing 39% of AUM. Fee-based flows were $13.3 billion in Q1’15 compared with $20.8 billion in Q4’14 and $19.9 billion in Q1’14. On a per-rep basis, assets were $129 million in Q1’15 vs. $126 million in Q4’14 and $118 million in Q1’14.

UBS said its Americas wealth management unit made a profit of $293 million in Q1’15, up 26% from Q4’14 and 3% from Q1’14. Revenues for the unit were $1.9 billion. Client assets reached $1.05 trillion.

Assets per advisor stand at $150 million, while yearly fees & commissions per rep are $1.09 million per year as of March 31. This production level is flat from the prior quarter but up 5% from Q1’14.

Net new money flows were $4.8 billion in Q1’15, down from $5.5 billion in the prior period but more than double the $2.1 billion of Q1’14.

The advisor headcount in the Americas is 6,982 vs. 6,997 in the earlier quarter and 7,113 in year-ago period.

In related news, UBS Americas says the head of its advisor operations, Bob Mulholland, is retiring. He will be replaced by Brian Hull, who joined UBS from Merrill Lynch in November 2009.

Wells Fargo’s Wealth, Brokerage and Retirement reported revenue for Q1’15 of $3.73 billion, a 7% improvement from last year and a 2% increase from the prior quarter. Net income jumped 18% from the prior year and 9% from the earlier period to $561 million.

These operations include 15,314 financial advisors and $1.4 trillion of client assets under management, of which $455 billion are in managed accounts—a 12% year-over-year increase.

Bank of America’s Global Wealth and Investment Management unit had Q1 net income of $651 million, down nearly 11% from a year ago and roughly 8% from the prior period. Revenue dropped slightly year over year and from the earlier quarter to $4.5 billion.

Total client balances increased 5% from last year to about $2.5 trillion, and assets under management stand at $917 billion. First-quarter 2015 net flows of assets under management were $13.2 billion vs. $9.1 billion in Q4’14 and $15.0 billion in Q1’14.

Excluding advisors in Consumer Banking, its FA force numbers 14,183—a jump of 103 from the prior quarter and an increase of 458 from last year. The average yearly level of fees and commissions is $1.04 million as of Q1’15, down slightly from Q4’14 and Q1’14. The firm notes that veteran FA productivity is roughly $1.4 million.

The firm says asset management fees were nearly $1.7 billion in the most recent period. The thundering herd has 50% or more of its client assets in a fee-based relationship.


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