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13 Best & Worst Broker-Dealers: Q2 Earnings, 2020

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In the second quarter of 2020, one bank  which owns one of the four wirehouse broker-dealers  set aside nearly $10.5 billion for credit losses, while another had provisions of close to $9.6 billion for potential loan losses, more the doubling the $3.8 billion it put aside in the prior quarter.

The two firms, though, reported dramatically different profits for the period ending June 30.

According to FactSet, the broader financial sector reported the fourth-largest year-over-year earnings decline of all 11 industry sectors as of July 31: -53%, which — if the figure remains at this level after all firms report Q2 2020 earnings — would represent the biggest earnings drop for banks and other financial firms since Q4 2008.

By segment, the largest declines have been in consumer finance (-118%), banking (-77%) and insurance (-38%). Capital markets (+10%) is the sole segment reporting year-over-year earnings growth for the quarter so far, FactSet says.

About a week after FactSet released its analysis, Goldman Sachs revised its second-quarter results to reflect the fact that the bank had increased its litigation reserves by some $2 billion in order to help it resolve probes over its role in Malaysia’s 1MDB investment fund scandal. This pushed it out of the third-best spot.

FA Headcount, Assets

Overall, the four wirehouses — Merrill Lynch, Morgan Stanley, UBS and Wells Fargo — saw their combined headcount shrink by 558 financial advisors over the past 12 months. They now have a total of 52,995 advisors in the Americas, and these FAs work with $8.4 trillion of client assets.

The other non-wirehouse broker-dealers tracked by ThinkAdvisor — and that publicly disclose their respective headcounts — have a total of 41,467 advisors. Four of the largest — LPL Financial, Ameriprise Financial, Raymond James and Stifel — have combined client assets of nearly $2.6 trillion. — Related on ThinkAdvisor: