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10 Best & Worst Broker-Dealers: Q4 Earnings, 2015

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With weakness in fourth-quarter earnings, profits for most of the S&P 500 firms reporting their results so far are estimated to be down an average 7%, analysts say.

Such a decline is the worst since the third quarter of 2009. According to Bloomberg data, profits fell by about 2% in Q2’15 and 3% in Q3’15.

Factors pulling down results in Q4, as in prior quarters of ’15, include weak energy prices and a strong dollar.

When breaking down the earnings results by sector, financial companies are in the middle of the pack. Their earnings are estimated to have dropped an average of roughly 5% on Q4’15 vs. more than 70% for energy and 25% for materials.

Financial firms are being battered by high market volatility and a sharp slowdown in capital markets activity, according to BNP Paribas. These general conclusions are borne out by results reported by some—but not all—U.S. broker-dealers.

(Related on ThinkAdvisor: 13 Best & Worst Broker-Dealers: Q3, 2015)

Read on to see how 10 players in the brokerage and wealth-management business fared in the October-to-December period of 2015.


Goldman Sachs headquarters in NY. (Photo: AP)

10th Place


Goldman reported a 72% decline in net income applicable to common shareholders to $574 million, or $1.27 per share, vs. $2.03 billion, or $4.38 per share, a year earlier.

The company posted quarterly adjusted earnings of $4.68 a share, compared to $4.38 a share in the year-earlier period.

Revenue for the quarter came in at $7.27 billion, against the comparable year-ago figure of $7.69 billion.

Analysts had expected the investment bank to report adjusted earnings of about $3.53 a share on $7.07 billion in revenue.

The bank said recently that a $5 billion settlement of crisis-era legal claims would reduce earnings in the quarter by $1.5 billion after taxes.

Mark Casady, CEO of LPL Financial.

9th Place


LPL Financial said its net income fell about 45% year over year to $27 million, or $0.28 per share, in the final quarter of 2015.

Fourth quarter 2015 adjusted earnings were $36 million, or $0.37 per share, down about 32% from the year-ago quarter. Revenue dropped about 8% to $1.02 billion.

Analysts had expected adjusted earnings to be $0.51 per share and sales to hit $1.05 billion.

“The market environment was volatile and challenging in 2015, particularly for brokerage sales,” said Chairman & CEO Mark Casady in a statement and CEO. “So we focused on bringing assets onto our platform and executing on our operational, efficiency, and capital plans.”

Total assets on the platform are $476 billion, up 3% from a year ago. Net new assets in Q4 were $3.1 billion. For the full-year 2015, net new assets were close to $17 billion.

Paul Reilly, CEO of Raymond James Financial.

8th Place


Raymond James Financial said it had net income of $106.3 million, or $0.73 per share, down 16% from the year-ago fourth quarter. Net revenues of $1.27 billion, though, improved 2% from the prior year. Both results, however, missed analysts’ estimates.

Weakness in the most-recent results, the company says, was mainly due to lower assets in fee-based accounts at the start of the quarter as a result of earlier equity market declines, along with “an extremely challenging environment for equity investment banking.” Also affecting net income were expenses related to growth, as well as higher increased reserves for legal and regulatory matters in the Private Client Group.

Quarterly net revenues for the Private Client Group were $872.3 million, up 3% from a year earlier. Quarterly pre-tax income of $69.1 million, however, were down 25% year over year.

The number of financial advisors affiliated with or employed by Raymond James hit 6,687 in the United States and overseas. Assets in fee-based accounts grew 9% year over year and now represent more than 40% of the group’s total client assets, or about $190 billion.

Ameriprise Financial Headquarters in Minneapolis.

7th Place


Ameriprise Financial reported fourth-quarter net income of $357 million, or $2.00 per diluted share, down 16% and 10%, respectively, from the fourth quarter of 2014.

The Minneapolis-based company, however, had operating earnings of $441 million up slightly (0.2%) from $440 million last year; its earnings of $2.47 a share topped estimates of $2.35 per share.

(For the full year, net income was $1.6 billion, down 4% from 2014, though earnings per share increased 2% to $8.48.)

“Increased volatility and investor concerns reinforce the importance of the advice and solutions Ameriprise provides to our clients,” Ameriprise chairman and CEO Jim Cracchiolo said in a statement.

The advice and wealth management unit, which includes 9,780 advisors said its revenues for the period rose slightly to $1.27 billion with pre-tax profits dropping slightly to $210 million. Its average yearly level of fees and commissions per advisor stands at $514,000 vs. 496,000 last year.

Wrap-account net flows were $3.1 billion in Q4 and $11.2 b for the full year. They now represent about $180.5 billion of assets out of the unit’s total AUM, which was $447.1 billion as of Dec. 31.  

John Stumpf, CEO of Wells Fargo. (Photo: AP)

6th Place


Wells Fargo says its fourth-quarter profit was nearly unchanged from a year ago at $5.7 billion, or $1.03 per share, and revenue grew less than 1% to $21.6 billion. (Analysts estimated the bank would earn $1.02 in Q4’15.)

The wealth and investment-management unit posted a profit of $595 million, a 15% gain, on a roughly 1% jump in revenue, which totaled $3.95 billion in Q4’15.

The average loan of loans for the unit was $63 billion, up from $55 billion a year ago. The bank says advisor clients had an average of 10.55 cross-sold products in their accounts in the most-recent period, up from 10.49 a year ago.

Client assets stood at $1.4 trillion, down about 2% year over year, with $420 billion in managed accounts and $350 billion in IRAs.

(Wells Fargo’ revenue tied to mortgages and related services improved nearly 10% to $1.66 billion on $47 billion in originations. According to Bloomberg, Wells Fargo’s assets totaled $1.79 trillion at the end of 2015, which topped Citigroup’s $1.73 trillion.)

Brian Moynihan, President and CEO of Bank of America. (Photo: AP)

5th Place


Bank of America said its fourth-quarter profits increased 9% to $3.3 billion, or $0.28 per share, from $3.1 billion, or $0.25 per share, a year earlier. Excluding accounting adjustments and onetime items, its net income was $0.29 a share, topping analysts’ estimates.

Revenue, however, fell short of estimates at $19.5 billion, a jump of roughly 4% from last year.

The bank’s global wealth group, which includes Merrill Lynch, saw its results weaken — with net income falling 9% year over year to $614 million and revenue down nearly 4% to $4.4 billion. Its pretax margin was 21%, while long-term assets flows were $6.7 billion in Q4.

The Merrill Lynch group of advisors includes 14,533 registered reps, up 448 from a year ago but down 30 from the prior quarter. On average, the advisors have annual fees & commissions of $990,000; however, veteran advisors’ average productivity is $1.3 million. With total assets of about $2 trillion, Merrill FAs have about $138 million in assets under management per rep.

JP Morgan Sign on a building in NYC. (Photo: AP)



The bank posted a quarterly profit of $5.4 billion, or $1.32 per share, up 10% from a year ago. Revenue, though, rose just slightly to $22.9 billion from $22.8 million in Q4’14.

JPMorgan’s earnings jump was largely attributed to lower legal expenses.

Chairman and CEO Jamie Dimon said in a statement that the company’s trading and asset management revenues benefited from the fact that “markets were somewhat quieter” in the fourth quarter.

JPMorgan’s consumer and community banking operations include 2,931 financial advisors and 18,000 private bankers. The level of private clients tops 441,000 with some 31,000 accounts.

Sergio Ermotti, CEO of UBS. (Photo: AP)

3rd Place


UBS said it had a fourth-quarter profit of about $958.3 million, up nearly 11% from a year ago thanks to higher net trading income. The latest results included a tax benefit of $722 million, net charges for regulatory and other issues of $368.6 million and a charge of $259.5 million for a debt buyback.

The company’s adjusted operating income increased 3% from last year to $7 billion, while its pre-tax operating profit on an adjusted basis was $761.4 million, an improvement of close to 50% from last year.

Wealth-management operations outside of the Americas, however, experienced a decline in profits of about 27% to $509.9 million, though the asset-management unit’s adjusted operating profit rose 23% to $154.5 million.

The Wealth Management America’s unit, which includes over 7,000 advisors, reported that its pre-tax profits sunk 94% to $13 million, mainly due to $180 million in net charges for litigation, regulatory and related matters. Adjusted profits dropped to $63 million from $287 million.

Net new money inflows for the period approached $17 billion on strong recruiting, though sales or operating income fell by $57 million, or 3%, to $1.87 billion in the quarter especially due to lower managed-account fees..

(Profits excluding special charges were close to $300 million, the company says.)

James Gorman, CEO of Morgan Stanley. (Photo: AP) 

2nd Place


Morgan Stanley reported fourth-quarter net income of $908 million, or $0.39 per share, a big increase from a loss of $1.6 billion, or $0.91 per share, a year earlier—representing a jump of over $2.5 billion in profits. After accounting adjustments, earnings were $0.43 a share, beating estimates.

The wealth group had revenues of $3.75 billion, down from $3.80 billion in the year-ago period. Pretax net income, though, rose to $768 million in the most-recent quarter vs. $736 million in Q4’14; the pretax margin for Q4’15 was $20%.

Client assets were nearly $2 trillion, while fee based assets stood at $795 billion on Dec. 31 — an increase of 3% from Q3’15 and 1% from Q4’14.

The total number of advisors stands at 15,889, representing a 1% increase from the prior quarter and a 1% drop for the year-ago period.

Financial-advisor productivity, which measures advisors’ total yearly fees and commissions, was about $947,000 for 2015; it stood at $944,000 in 2014. Average client assets per rep was $125 million in 2015.


Michael Corbat, CEO of Citigroup. (Photo: AP)

1st Place


Citigroup had net income of $3.3 billion, or $1.02 per share, compared to profits of $344 million, or $0.06 per share, a year before—a whopping improvement of roughly 960%, or close to $3 billion.

Equity analysts, however, say the revenue gains were highly dependent on one-time items.

The banking giant posted adjusted earnings per share of $1.06 and revenues of $18.64 billion for the previous quarter. Analysts had expected Citi to report earnings of about $1.05.

“Overall, we had strong performance during 2015. The $17.1 billion we generated in net income was the highest since 2006, when our company was very different in terms of headcount, footprint, mix of businesses and assets,” CEO Michael Corbat said in a release.

Still, the company’s loans for the quarter fell 4% year over year.

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