Morgan Stanley’s wealth management business helped the firm top analysts’ estimates for earnings in the second quarter. The group — which includes 15,633 advisors — grew net income 9% year over year to $953 million and sales 2% to $4.41 billion.
Still, the firm’s overall results were hurt by weakness in its institutional securities business. It reported total revenues of $10.2 billion, down 3% from last year. And its profits fell 10% to $2.2 billion, or $1.23 per share.
“Wealth management produced record profits before taxes [of $1.24 billion] and a margin of 28.2% [at] the top end of guidance,” Chairman and CEO James Gorman said on a call with equity analysts Thursday.
This performance “illustrates the resilience of the model. Higher asset levels and strong loan balance growth more than offset the effects of lower interest rates,” he said.
Overall, the company’s advisor headcount rose 1 from a year ago but is down 75 from the prior quarter.
Average yearly fees and commissions per advisor of $1.13 million are up slightly from $1.11 million a year ago and down somewhat from $1.19 million in the prior quarter. Merrill’s average production level for its 14,690 FAs is $1.08 million overall, and $1.4 million for veteran advisors.