The latest financial figures show growth in wealth management overall, though firms showed
differences in asset flows and headcount
changes. Here’s a summary of how the
largest industry players performed:
The company had overall net income of
$492 million, or $3.57 per share vs. $462
million, or $3.10 per share, a year earlier. Its revenue grew 2% year over year
to $3.25 billion. The Advice & Wealth
Management unit grew its revenues 8%
over last year to $1.69 million, and its pretax profits were up 7% to $376 million.
Advisors total 9,951, a gain of 45 from
Q2’ 18 but down 28 from Q1’ 19. About
2,200 of these advisors are employees,
with the rest being independent contractors. These reps have average trailing 12-month fees and commissions of
$638,000. Client assets for the business
are $607.5 million, up 7% from a year
ago; it had $4.8 billion net wrap inflows
in Q2’ 19.
LPL Financial: The independent
broker-dealer had a 23% year-over-year
jump in net income to $146 million for
the quarter ended June 30, while earnings per share rose 32% over the year-ago period; sales grew 7% to $139 billion.
The independent broker-dealer had
net asset inflows of $4 billion in the
quarter and $8.5 billion of recruited
assets, bringing its trailing 12-month
total to about $33 billion. Its total assets
grew 7% year over year to $706 billion,
while its advisor headcount is 16,161 —
up 112 from last year but down 28 from
the prior quarter.
According to CEO and President
Dan Arnold, the IBD’s new advisory
oriented and independent employee
models “more than double the size of
our addressable market.” LPL’s Advisor
Sleeve program has attracted $600 mil-
lion from some 1,500 advisors; the ser-
vice lets advisors run custom portfolios
and use LPL for monitoring, rebalancing
and tax management.
The global wealth unit of Bank of
America, which includes Merrill Lynch
and Bank of America Private Bank, grew
its revenue 4% year over year to about
$4.9 billion in the second quarter of
2019, while net income jumped 10.5%
to over $1.07 billion. (BofA overall had
an 8% year-over-year jump in profits
to $7.35 billion in the second quarter.
Earnings per share rose 13% to $0.74
per share, but revenue grew just 2% to
But the Merrill headcount, now at
14,690, is down 130 from a year ago and
71 from the prior quarter. Total client
balances for the broader global wealth
unit are $2.9 trillion vs. $2.75 trillion a
year ago. Asset flows for the quarter in
the global wealth business were $5.3
billion, down about 50% from last year’s
The average level of yearly fees and
commissions per Merrill Lynch FA,
though, grew to $1.08 million from $1.02
million in the year-ago period.
Merrill says it will not be moving into
an RIA channel anytime soon, unlike
rival Wells Fargo and Goldman Sachs.
As for a move into a subscription model,
as Charles Schwab did earlier this year,
BofA’s global wealth unit is “
continuously evaluating pricing strategies,” a
senior leader said, adding that 82% of
its current revenue comes from fees on
assets under management and net interest income tied to deposits and loans.
The bank’s wealth management business — which includes 15,633 advisors — grew net income 9% year over
year to $953 million and sales 2% to
By Janet Levaux
Indie Wirehouse Firms Post Q2 2019 Results
Performance in the most recent quarter included generally positive momentum,
though some firms continue to struggle in recruiting, retention and profits.