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Industry Spotlight > Women in Wealth

Merrill vs. Morgan Stanley: An Earnings-Season Tale of Two Wirehouses

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The second quarter proved to be a bumpy time for some of the largest Wall Street firms.

Bank of America’s profits dropped 52% to $3.53 billion, or $0.37 per share, from $7.35 billion, or $0.74 per share. It set aside some $5.12 billion for loan losses in Q2’20.

That news, reported Thursday, came two days after rival Wells Fargo reported a loss of $2.4 billion, or $0.66 per share, in Q2’20 and a loan-loss provision of $9.57 billion.

Meanwhile, Morgan Stanley’s second-quarter profits soared 45% to $3.20 billion, or $1.96 per share, from $2.20 billion, or $1.23 per share, a year ago. The bank, which doesn’t have large consumer banking operations like BofA and Wells, set aside $246 million for credit losses in Q2’20.

Wealth Unit Performance

The wealth unit of Morgan Stanley had revenues of about $4.7 billion in Q2, up from $4.4 billion in the year-ago period. Its net income, though, fell 10% year over year to $853 million.

BofA’s wealth group had revenues of $4.4 billion in Q2 ($3.6 billion of which came from Merrill), down from $4.9 billion a year ago. Its profits fell by 62% from a year ago to $726 million in the latest quarter.

Merrill Lynch Wealth Management had roughly $2.5 trillion in client assets as of Q2, but Morgan Stanley had nearly $2.7 trillion. With the BofA Private Bank advisors included, though, the overall wealth unit had $2.9 trillion in client assets. 

Financial Advisor Stats

Morgan Stanley’s tally is 15,399 advisors, down by 234 from a year ago. They work with a total of $2.7 trillion in client assets.

Advisors with Morgan Stanley have average trailing 12-month fees and commissions of $1.21 million as of June 30  up 16% from the first quarter and up 8% from year ago.

Bank of America Merrill has 17,888 advisors, up by 380 from last year; these figures include some advisors working on Merrill Edge and other BofA operations. The overall wealth unit has $2.9 trillion of client assets.

The wealth unit’s advisors have average yearly production of $1.07 million, down 6% from the prior quarter and down 1% from the year-ago period.

Veteran Merrill advisors, though, had average annual fees and commissions of $1.38 million in Q2’20 — a drop of about 5% from Q1’20 and 1% lower than in Q2’19.