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Wealth Units at Raymond James, Ameriprise & UBS Boost Profits: Q2 Earnings

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Paul Reilly, chairman and CEO of Raymond James

Raymond James Financial, Ameriprise Financial and UBS reported higher profits and client assets in their U.S.-based wealth operations for the quarter ending June 30. But only Raymond James saw its headcount rise from results in both the prior year and earlier quarter.

Late Wednesday, Raymond James reported total revenues of $1.93 billion, up 5% over the prior year; its net income was $259 million, or $1.80 per share, versus $232 million, or $1.55 per share.

Its Private Client Group had a 6% year-over-year jump in sales and pretax net income to $1.35 billion and $140 million, respectively. Assets under administration grew 9% from last year and 4% from the prior quarter to $787.4 billion; fee-based assets stood at $398 billion.

Raymond James’ advisor headcount was 7,904 as of June 30, an increase of 185 from a year ago and 42 from March 30. Some 4,700 of these advisors are independent contractors, while the rest are employees.

“We generated a solid net increase in the number of financial advisors during the quarter as we remain focused on retaining and attracting high-quality financial advisors,” according to Chairman and CEO Paul Reilly. “Recruiting activity remains strong across all of our affiliation options.”

 Ameriprise Earnings

The firm had overall net income of $492 million, or $3.57 per share in Q2’19 vs. $462 million, or $3.10 per share, a year earlier. Its revenue grew 2% year over year to $3.25 billion.

The Advice & Wealth Management unit grew its revenues 8% over last year to $1.69 million, and its pretax profits were up 7% to $376 million.

Client assets for the business are $607.5 million, up 7% from a year ago and 3% from the prior quarter. It had $4.8 billion net wrap inflows in Q2’19.

Advisors total 9,951, a gain of 45 from Q2’18 but down 28 from Q1’19. About 2,200 of these advisors are employees, with the rest being independent contractors.

These reps have average trailing 12-month fees and commissions of $638,000.

“Our comprehensive advice-based approach and leading capabilities drove Ameriprise client assets and advisor productivity to record highs in the second quarter,” according to Chairman and CEO Jim Cracchiolo, who added that the recently announced sale of the firm’s car and home insurance business should close in the fourth quarter.

UBS’ Developments

The global bank had a 1% drop in total revenue from last year to $7.53 billion. Net income, though, rose 1% to $1.39 billion, or $0.37 per share, from $1.38 billion, or $0.36 per share in the year-ago quarter.

UBS’ Americas Wealth Management unit had pretax income of $363 million, up 7% from last year and 10% from the prior quarter — a level similar to that of Ameriprise. But this business works with assets of $1.321 trillion, up 4% from Q2’18 and 2% from Q1’19.

The firm had net outflows in the Americas of $8.3 billion, which it said was due to “seasonal income tax payments.”

As for the number of advisors in the Americas, UBS had 6,689 as of June 30 — down 248 from last year and 101 from the prior quarter.

These advisors have an average of $1.349 million in yearly fees and commission and $197 million in client assets.

“Wealth Management Americas continues to lead industry innovation in the U.S. and delivered several records in the quarter,” the firm said in its quarterly report. “We have the most productive advisors in the industry and continue to selectively attract and hire top quartile advisors.”

The Swiss-based bank cautioned that “operational and supervisory changes for UBS’ US broker-dealers” are expected as part of the implementation of Regulation Best Interest and its disclosure and compliance requirements.

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