10 Best & Worst Broker-Dealers: 2015 Earnings

The financials of broker-dealers had a mixed year in 2015, to say the least. The top four broker-dealer firms on this list saw their year-over-year profit growth soar; some even doubled their 2014 net income. Profits at our fifth-ranked firm grew a measly 3.9%, while the rest of the firms suffered shrinking profits.

The biggest independent broker-dealer, LPL Financial (LPLA), was one of the firms that had a tough year. It reported a 45% decline in fourth-quarter profits, citing slow broker sales and weakness in alternative investments as the stock market fell.

LPL’s stock fell 34% in February after the earnings report, bottoming out at $16.50. Shares have recovered to about $25 — still down steeply from $42.65 at year end — and shareholders are suing, claiming the firm misled investors to boost stock prices while executing a $250 million share buyback plan that benefited a key private equity investor.

(To see how the firms did in the fourth quarter, check out 10 Best & Worst Broker-Dealers: Q4 Earnings, 2015.)

The real loser, though, was RCS Capital (RCAPQ), the parent company of the Cetera network of 10 broker-dealers. Still struggling to shake off the effects of an accounting scandal in late 2014, the firm was embroiled in a proxy voting scandal late in the year. The firm shut its once-lucrative REIT wholesale unit in December and filed for Chapter 11 bankruptcy in January. Cetera will become a private firm under RCAP’s reorganization plan with the bankruptcy court.

(On Monday, RCAP announced it had filed a prepackaged reorganization plan, complete with retention packages for Cetera advisors, that it expects to complete by May.)

Read on to see how 10 players in the brokerage and wealth-management business fared for 2015:

WORST BROKER-DEALER

10^th Place

GOLDMAN SACHS (GS)

2014 Net Income:  $8.48 Billion
2015 Net Income:  $6.08 Billion

Profit Change for Year:  Down 28.3%

Stock Price Start 2015:  $195.30
Stock Price End 2015:  $180.23

9^th Place

JPMORGAN CHASE & CO. (JPM)

2014 Net Income:  $24.44 billion
2015 Net Income:  $21.75 billion

Profit Change for Year:  Down 11%

Stock Price Start 2015:  $62.18
Stock Price End 2015:  $66.03

8^th Place

LPL FINANCIAL (LPLA)

2014 Net Income:  $178 million
2015 Net Income:  $169 million

Profit Change for Year:  Down 5.1%

Stock Price Start 2015:  $44.84
Stock Price End 2015:  $42.65

7^th Place

RAYMOND JAMES FINANCIAL (RJF)

2014 Net Income:  $502 million
2015 Net Income:  $480 million

Profit Change for Year:  Down 4.4%

Stock Price Start 2015:  $57.68
Stock Price End 2015:  $57.97

6^th Place

WELLS FARGO (WFC)

2014 Net Income:  $23.06 billion
2015 Net Income:  $22.89 billion

Profit Change for Year:  Down 0.74%

Stock Price Start 2015:  $56.24
Stock Price End 2015:  $54.36