The financials of broker-dealers had a mixed year in 2015, to say the least. The top four broker-dealer firms on this list saw their year-over-year profit growth soar; some even doubled their 2014 net income. Profits at our fifth-ranked firm grew a measly 3.9%, while the rest of the firms suffered shrinking profits.
The biggest independent broker-dealer, LPL Financial (LPLA), was one of the firms that had a tough year. It reported a 45% decline in fourth-quarter profits, citing slow broker sales and weakness in alternative investments as the stock market fell.
LPL's stock fell 34% in February after the earnings report, bottoming out at $16.50. Shares have recovered to about $25 — still down steeply from $42.65 at year end — and shareholders are suing, claiming the firm misled investors to boost stock prices while executing a $250 million share buyback plan that benefited a key private equity investor.
(To see how the firms did in the fourth quarter, check out 10 Best & Worst Broker-Dealers: Q4 Earnings, 2015.)
The real loser, though, was RCS Capital (RCAPQ), the parent company of the Cetera network of 10 broker-dealers. Still struggling to shake off the effects of an accounting scandal in late 2014, the firm was embroiled in a proxy voting scandal late in the year. The firm shut its once-lucrative REIT wholesale unit in December and filed for Chapter 11 bankruptcy in January. Cetera will become a private firm under RCAP's reorganization plan with the bankruptcy court.
(On Monday, RCAP announced it had filed a prepackaged reorganization plan, complete with retention packages for Cetera advisors, that it expects to complete by May.)
Read on to see how 10 players in the brokerage and wealth-management business fared for 2015:
WORST BROKER-DEALER
10th Place
GOLDMAN SACHS (GS)
2014 Net Income: $8.48 Billion
2015 Net Income: $6.08 Billion
Profit Change for Year: Down 28.3%
Stock Price Start 2015: $195.30
Stock Price End 2015: $180.23
9th Place
JPMORGAN CHASE & CO. (JPM)
2014 Net Income: $24.44 billion
2015 Net Income: $21.75 billion
Profit Change for Year: Down 11%
Stock Price Start 2015: $62.18
Stock Price End 2015: $66.03
8th Place
LPL FINANCIAL (LPLA)
2014 Net Income: $178 million
2015 Net Income: $169 million
Profit Change for Year: Down 5.1%
Stock Price Start 2015: $44.84
Stock Price End 2015: $42.65
7th Place
RAYMOND JAMES FINANCIAL (RJF)
2014 Net Income: $502 million
2015 Net Income: $480 million
Profit Change for Year: Down 4.4%
Stock Price Start 2015: $57.68
Stock Price End 2015: $57.97
6th Place
WELLS FARGO (WFC)
2014 Net Income: $23.06 billion
2015 Net Income: $22.89 billion
Profit Change for Year: Down 0.74%
Stock Price Start 2015: $56.24
Stock Price End 2015: $54.36
5th Place
AMERIPRISE FINANCIAL (AMP)
2014 Net Income: $1.56 billion
2015 Net Income: $1.62 billion
Profit Change for Year: Up 3.9%
Stock Price Start 2015: $132.98
Stock Price End 2015: $106.42
4th Place
MORGAN STANLEY (MS)
2014 Net Income: $3.47 billion
2015 Net Income: $6.13 billion
Profit Change for Year: Up 76.7%
Stock Price Start 2015: $39.05
Stock Price End 2015: $31.81
3rd Place
UBS GROUP (UBS)
2014 Net Income: $3.5 billion 2015
Net Income: $6.4 billion
Profit Change for Year: Up 82.9%
Stock Price Start 2015: $17.05
Stock Price End 2015: $19.37
2ndPlace
CITIGROUP (C)
2014 Net Income: $7.31 billion
2015 Net Income: $17.24 billion
Profit Change for Year: Up 135.8%
Stock Price Start 2015: $54.36
Stock Price End 2015: $51.75
BEST BROKER-DEALER
1st Place
BANK OF AMERICA (BAC)
2014 Net Income: $4.83 billion
2015 Net Income: $15.89 billion
Profit Change for Year: Up 229%
Stock Price Start 2015: $17.99
Stock Price End 2015: $16.83
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