Wealth firms across the indus- try just reported earnings for the first three months of2020. Here are the highlights:
The firm’s Advice & Wealth Managementunit 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 offsetthe decline in short-term interest rates,”the firm said.
Its pretax adjusted operating earningswere $378 million, up 8% from a yearago. “The company’s business continuitycapabilities ensured that advisors havethe tools and information necessary tomeet and exceed client needs in this volatile environment,” it added in a statement.
The business includes 9,878 independent (or franchisee) and employeeadvisors — up 7 from the prior quarterand down 101 from a year ago; 7,726 areindie advisors, and 2,100 are employees. The firm said 80 veteran advisorsmoved their practices to Ameriprise inthe first quarter.
Total client assets for the quarterwere $560 billion; client inflows were$6.1 billion in the quarter, while clientbrokerage cash balances grew almost30% from a year ago to $32.7 billion.
Adjusted operating net revenue (orfees and commissions) per advisor on atrailing 12-month basis were up 8% fromlast year to $680,000.
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 bil-
lion, 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 $8.4billion for Q1’ 20 and $36.2 billion for thepast four quarters.
The number of affiliated advisorstotaled 16,763, up 574 from a year agoand 299 from the prior quarter. Totalclient cash balances were $47.8 billion.
The IBD recently rolled out a newaffiliation model aimed at attractingwirehouse and other employee advisors. “The first team to move to thissolution did so April 1,” said RichSteinmeier, managing director ofBusiness Development.
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, camefrom higher asset management andrelated administrative fees in PrivateClient Group fee-based accounts —which have $384 billion of assets — andhigher brokerage revenue in both PCGand Capital Markets.
PCG advisor headcount jumped 286from last year to hit 8,148 on March31, which is up by 88 from December2019. The number of independentadvisors is 4,772, while employeeadvisors total 3,376.
The unit’s net revenue was up 18%from last year to $1.50 billion, and itspretax income jumped 29% to $170 million. Cash sweep balances were nearly$53 billion.
Private Client Group assets underadministration of $734 billion weakened3% from a year ago. They are roughly52% fee-based.
By Janet Levaux
Wirehouses, BDs & Brokerage Firms
Share Results in the COVID- 19 Crisis
From Ameriprise Financial to UBS, financial groups see cash balances swell.