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Wirehouses, IBDs, Brokerage Firms Post Q1 Results

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Wealth firms across the industry just reported earnings for the first three months of 2020. Here are the highlights:

Ameriprise Financial

The firm’s Advice & Wealth Management unit brought in about $1.7 billion of revenue, up 9% from a year ago, thanks to “strong client activity and higher average equity markets that more than offset the decline in short-term interest rates,” the firm said.

Its pretax adjusted operating earnings were $378 million, up 8% from a year ago. “The company’s business continuity capabilities ensured that advisors have the tools and information necessary to meet and exceed client needs in this volatile environment,” it added in a statement.

The business includes 9,878 independent (or franchisee) and employee advisors — up 7 from the prior quarter and down 101 from a year ago; 7,726 are indie advisors, and 2,100 are employees. The firm said 80 veteran advisors moved their practices to Ameriprise in the first quarter.

Total client assets for the quarter were $560 billion; client inflows were $6.1 billion in the quarter, while client brokerage cash balances grew almost 30% from a year ago to $32.7 billion.

Adjusted operating net revenue (or fees and commissions) per advisor on a trailing 12-month basis were up 8% from last year to $680,000.

LPL Financial

The independent broker-dealer said its net income rose slightly from last year to $156 million, while earnings per share jumped 7% to $1.92. Total revenues improved 7% from last year to $1.5 billion, with commissions up 9% to about $503 million and advisory revenues (or fees) up 28% to $579 million.

Its assets fell 2% from a year ago to $670 billion, though fee-based (or advisory) assets, jumped 3% to $322 billion. Net new asset inflows in the period were $12.5 billion; recruited assets were $8.4 billion for Q1’20 and $36.2 billion for the past four quarters.

The number of affiliated advisors totaled 16,763, up 574 from a year ago and 299 from the prior quarter. Total client cash balances were $47.8 billion.

The IBD recently rolled out a new affiliation model aimed at attracting wirehouse and other employee advisors. “The first team to move to this solution did so April 1,” said Rich Steinmeier, managing director of Business Development.

Raymond James

The firm had a 35% year-over-year drop in net income to $169 million for the period ending March 31 — mainly due to the bank loan loss provision of $109 million tied to the coronavirus fallout. Revenue, though, rose 11% from a year earlier to $2.07 billion.

This growth, the firm says, came from higher asset management and related administrative fees in Private Client Group fee-based accounts — which have $384 billion of assets — and higher brokerage revenue in both PCG and Capital Markets.

PCG advisor headcount jumped 286 from last year to hit 8,148 on March 31, which is up by 88 from December 2019. The number of independent advisors is 4,772, while employee advisors total 3,376.

The unit’s net revenue was up 18% from last year to $1.50 billion, and its pretax income jumped 29% to $170 million. Cash sweep balances were nearly $53 billion.

Private Client Group assets under administration of $734 billion weakened 3% from a year ago. They are roughly 52% fee-based.

Merrill Lynch

Its advisor headcount grew to 17,646. That’s up 111 from a year ago and 188 from the prior quarter. At the same time, the average 12-month fees and commissions per advisor were $1.14 million vs. $1.04 million in Q1’19 and $1.1 million in Q4’19.

But this type of growth may be unlikely for Q2’20, based on the impact of restricted recruiting, face-to-face meetings with clients and prospects due to the coronavirus and market-related issues.

The wealth unit’s revenue was $4.936 billion, up $116 million from a year ago and $23 million from Q4’19. The pre-tax margin, though, fell to 23% vs. 29% last year and 28% in the prior quarter.

Morgan Stanley

The firm’s wealth unit saw its revenue fall by 8% from a year ago to $4.04 billion. Its net income weakened 6% to $864 million, but it had a pretax margin of 26%in Q1’20.

Morgan Stanley has 15,432 advisors, down 36 from the prior quarter and 276 from a year ago. Their average yearly fees and commissions are $1.05 million, about 12% less than the prior quarter and 7% from a year ago.

Total assets for the wealth unit are $2.4 trillion; clients hold about 23% of their assets in cash and short-term securities. Average assets per advisor in Q1’20 were $155 million vs. $175 million in Q4’19 and $158 million in Q1’19.

Fee-based assets are roughly $1.13 trillion. Flows of these assets in the first quarter were $18.4 billion vs. $24.9 billion in the prior quarter and $14.8 billion in the year-ago period.

Stifel Financial

The firm had net income of about $82 million, or $1.07 per share, on net revenues of $913 million vs. $97 million, or $1.22share, on net revenues of $770 million a year ago.

Global Wealth Management brokerage revenues were nearly $180 million, a 17% increase compared with the first quarter of 2019 and a 3% increase jump from the fourth quarter of 2019.

The firms’ advisor headcount is 2,224, up from 2,222 in the prior quarter and 2,160 last year. It has 2,130 employee advisors, and 94 independent FAs. They work with $277 billion of client assets, down 8% from a year ago; fee-based assets account for $94 billion, off last year’s figure by 6%.

“The next few months have a high level of uncertainty, which can drive a wide range of economic outcomes. Longer term, we believe the world and our economy will overcome this pandemic,” said Chairman and CEO Ron Kruszewski.

TD Ameritrade

The firm’s net income in the latest quarter fell 11% to $446 million from a year ago; revenues, though, grew 2% to $1.48 billion; it had net interest revenue of $332 million, down 8% from last year, and total client assets of $1.2 trillion at the end of the period.

Its net new assets, or NNA, in the first three months of 2020 were $45 billion. They were split between retail investors, 58%, and RIA-affiliated clients, 42%. That’s up from about $20 billion a year ago and $29 billion in the prior quarter.

Wells Fargo

The bank’s Wealth and Asset Management unit said its financial advisor headcount dropped by 378 year over year and 62 from the prior quarter to 13,450 as of March 31, 2020. (The firm had 15,086 registered reps on Sept. 30, 2016, when it began making headlines for its fake-accounts scandal.)

The unit’s profits fell 20% year over year to $463 million as of March 31; they were up 82% from the earlier period. Assets weakened 12% from last year to $1.6 trillion on lower market returns and outflows from the Correspondent Clearing business, Wells Fargo said. Referrals from community bank clients, though, rose 16% from last year to $2.8 billion.


The bank’s Global Wealth Management unit saw its net income improve 41% over last year to $1.22 million, and its operating income grew 14% to $4.55 million. In the Americas, profits before taxes rose 16% from a year ago, or $52 million, from Q1’19 to $380 million. Revenue grew $222 million from last year to $2.4 billion.

The unit’s total assets stand at $1.23 trillion, with net new money of $3.3 billion in the first quarter. Its advisor headcount, though, for the U.S. and Latin America dropped 294 from last year and 44 from the prior quarter, ending the quarter at 6,496.

Charles Schwab

The brokerage firm’s net income was $795 million, down 18% from a year ago. Revenues weakened 4% from Q1’19 to hit $2.6 billion. Net interest revenue fell 6% from a year ago to $1.57 billion; asset management and fee revenue grew 10% to $827 million; and trading revenue declined 13% to $188 million.

The Advisory Services unit had assets of about $1.65 trillion, down 3% from last year, while Investor Services had $1.85 trillion, for a year-over-year decline of 2%.

The firm recently said its flagship Impact conference, set to take place Nov. 10-13, is going to be held as a virtual event. Bernie Clark, head of the firm’s Advisor Services unit, said the firm’s $26 billion merger with rival TD Ameritrade is on track: “We fully expect [government] approval in the second half of the year.”

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


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