What You Need to Know
- BofA's wealth management unit ended Q1 with 18,600 advisors, down from 18,846 at the end of Q1.
- There are now about 2,000 advisors across the new Merrill training program and legacy training program combined.
- The company still expects 1,000 advisors will graduate each year from the new training program.
Profit in Bank of America’s global wealth and investment management division, which includes Merrill and BofA Private Bank, grew 28% from last year to $1.1 billion in the first quarter ended March 31, the company said Monday.
Revenue in the division, meanwhile, jumped 10% from a year ago to $5.5 billion in Q1, with Merrill revenue increasing 10% to $4.6 billion and Private Bank revenue jumping 13% to $887 million, BofA said.
Merrill client balances were $3.1 trillion, up 7% from a year ago, while Private Bank client balances were up 7% to $598 billion. Consumer investments grew 12% to $477 billion.
“We added nearly 7,800 net new client relationships” in Merrill and Private Bank in Q1, Andy Sieg, president of Merrill Lynch Wealth Management, told reporters during a phone briefing Monday morning.
Merrill added 6,900 net new client relationships in Q1, up 9% from a year ago, as assets under management grew 8% to $1.2 trillion and planning conversations increased 29%.
Private Bank added 830 net new client relationships, up 24% from a year ago, as AUM increased 3% to $334 billion.
Private Bank and consumer investments grew 7%, which the company said drove $38 billion in client balance flows in Q1.
Although the bank’s overall revenue, net of interest expense, increased 2.3% to $23.2 billion, overall income dipped to $7.1 billion from $8.1 billion.
“Across our businesses, ongoing organic growth combined with good expense management drove operating leverage for the third consecutive quarter,” according to Brian Moynihan, BofA CEO.
“Our teammates supported our clients while managing through the impacts of the pandemic, war in Ukraine, and an evolving rate environment,” he said in the bank’s earnings news release. “Our strong first quarter client activity drove results that allow us to deliver for shareholders while continuing to invest in our people, businesses, and communities.”
Demand for Advisors
“We continue to see a high demand for professional financial advice, and this was particularly true during a quarter where we experienced geopolitical uncertainty, accelerated inflation, energy concerns — all of which caused volatile markets and, at times, emotions ran high,” Sieg told reporters.
“Our advisors have helped clients keep the headlines in perspective, resist the temptation to buy high and sell low, and remain focused on long-term goals,” he said. “And all this has led to a strong increase in client discussions around goals and asset allocation.”
Financial planning reports were up almost 30% in Q1 vs. a year ago, which he said is a “great reflection around this engagement by advisors with clients.”
Advisors are also now back in Merrill offices to meet with clients after many of them worked remotely since the start of the pandemic, he added.
The company ended Q1 with 18,600 advisors in the wealth and investment management division, Sieg said. That was down from 18,846 at the end of Q1.