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Indie Wirehouse Firms Post Q2 2019 Results

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The latest financial figures show growth in wealth management overall, though firms showed differences in asset flows and headcount changes. Here’s a summary of how the largest industry players performed:

Ameriprise Financial

The company had overall net income of $492 million, or $3.57 per share 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.

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

LPL Financial: The independent broker-dealer had a 23% year-over-year jump in net income to $146 million for the quarter ended June 30, while earnings per share rose 32% over the year-ago period; sales grew 7% to $139 billion.

The independent broker-dealer had net asset inflows of $4 billion in the quarter and $8.5 billion of recruited assets, bringing its trailing 12-month total to about $33 billion. Its total assets grew 7% year over year to $706 billion, while its advisor headcount is 16,161 — up 112 from last year but down 28 from the prior quarter.

According to CEO and President Dan Arnold, the IBD’s new advisory oriented and independent employee models “more than double the size of our addressable market.” LPL’s Advisor Sleeve program has attracted $600 million from some 1,500 advisors; the service lets advisors run custom portfolios and use LPL for monitoring, rebalancing and tax management.

Merrill Lynch

The global wealth unit of Bank of America, which includes Merrill Lynch and Bank of America Private Bank, grew its revenue 4% year over year to about $4.9 billion in the second quarter of 2019, while net income jumped 10.5% to over $1.07 billion. (BofA overall had an 8% year-over-year jump in profits to $7.35 billion in the second quarter. Earnings per share rose 13% to $0.74 per share, but revenue grew just 2% to $23.08 billion.)

But the Merrill headcount, now at 14,690, is down 130 from a year ago and 71 from the prior quarter. Total client balances for the broader global wealth unit are $2.9 trillion vs. $2.75 trillion a year ago. Asset flows for the quarter in the global wealth business were $5.3 billion, down about 50% from last year’s $10.4 billion.

The average level of yearly fees and commissions per Merrill Lynch FA, though, grew to $1.08 million from $1.02 million in the year-ago period.

Merrill says it will not be moving into an RIA channel anytime soon, unlike rival Wells Fargo and Goldman Sachs. As for a move into a subscription model, as Charles Schwab did earlier this year, BofA’s global wealth unit is “continuously evaluating pricing strategies,” a senior leader said, adding that 82% of its current revenue comes from fees on assets under management and net interest income tied to deposits and loans.

Morgan Stanley

The bank’s wealth management business — 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 revenues were $10.2 billion, down 3% from last year. And its profits fell 10% to $2.2 billion, or $1.23 per share.

Overall, the company’s advisor headcount rose by one 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 from $1.19 million in the prior quarter. The average level of assets per advisor is $164 million, and total assets in the wealth unit are $2.6 trillion.

As for net fee-based asset flows, they stood at $9.8 billion for Q2’19; this is down about 35% from both Q2’18 and 1Q’19. Morgan Stanley’s fee-based asset level is about $1.16 trillion and represents 45% of total assets.

Raymond James

The firm 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. According to Chairman and CEO Paul Reilly: “Recruiting activity remains strong across all of our affiliation options.”


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. 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.

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

Wells Fargo

The bank had a 19% jump in net income to $6.2 billion; earnings improved about 33% to $1.30 per share, but revenue was flat at $21.6 billion. As for the wealth operations, total assets under management fell 1% to $1.9 trillion. The unit had a 35% boost in net income, though, to $602 million.

The firm lost 3% of its advisors vs. Q2’18. It now has 13,799 — down 29 from the prior quarter, 427 from last year and 1,287 from Sept. 30, 2016 (when news of its fake-accounts scandal spread).

“Advisor headcount at [Wells Fargo Advisors] stabilized as we had our best recruiting quarter since 2016 in terms of both the number of hires and the associated production,” according to a statement.

Fees and commissions, or productivity, of veteran recruits from rivals rose 84% year to date, the group says, vs. the first half of 2018. “Advisor attrition has dropped, our pipelines are robust, and the recruiting activity levels of our local managers are very high,” it added.

Separately, Wells Fargo named Jim Hayes as the new head of Wells Fargo Advisors, with prior WFA leader David Kowach now set to lead the firm’s Community Banking unit.

Hays has been with Wells Fargo since late 2005 and most recently led its newly formed Private Wealth Financial Advisors group, which includes advisors grouped in hubs that serve high-net-worth clients. Earlier, he led both Wells Fargo’s Private Client Group and Wealth Brokerage Services. He started his career at Merrill Lynch in mid-1997.

Wells Fargo also hired Julia Wellborn as head of Private Wealth Management, a division of its Wealth & Investment Management unit. In this new role, the former head of wealth management at Comerica Bank will lead the Private Bank and Abbot Downing; the Private Bank administers $209 billion in client assets and deposits while Abbot Downing administers $45 billion in assets and deposits.

Janet Levaux is editor-in-chief of Investment Advisor. She can be reached at [email protected].