The number of net new client households for Merrill Lynch Wealth Management advisorsfell to 22,000 in 2020 from 35,000 in
2019 — representing a 37% decline.
Despite the dramatic drop-off, thecompany called last year’s achievement“pretty extraordinary given the environment,” noting that was “four timesthe pre-2017 household acquisition levels.” The additions included 5,000 netnew households in the fourth quarter,Merrill said.
Also, net client asset flows to Bank ofAmerica’s Global Wealth & InvestmentManagement (GWIM) unit — whichincludes both Merrill Lynch and BofAPrivate Bank — were down 21% for thefull-year 2020 at $19.6 billion vs. $24.9billion a year ago, and fell 7% year overyear to $7.60 billion in Q4’ 20.
Plus, the GWIM business reporteda 16% year-over-year drop in Q4’ 20net income to $836 million from $1billion. Revenue fell roughly 4% froma year ago to $4.7 billion. Of that totalrevenue, $3.9 billion came from Merrill,down from $4 billion, while $831 million came from the Private Bank, downfrom $867 million.
In addition, Merrill is projecting lowsingle-digit growth in the number ofits advisors annually over the next fiveyears, the company reported. It expectsto achieve an increased number of advisors through the rollout of its advisorydivision strategy in 2021, the strengthening of its advisor development program, and by increasing the overallsuccess rate of the next generation ofMerrill advisors.
The number of Merrill advisors fell
by 429 in the recent quarter to 17,331
as of Dec. 31, 2020. Also, the number of
Private Bank advisors slipped by 7 from
a year ago and by 11 in the prior quarter
to 1,759, the firm said.
Merrill’s average advisor 12-monthtrailing fees and commissions (or production) level was $1.17 million vs. $1.11million in Q4’ 19. For the full-year, it was$1.13 million vs. $1.08 million in 2019.
BofA’s overall results for the last period were down from the year-ago quarter. Total revenues for Q4’ 20 fell about10% to $20.1 billion, while net incomedropped about 21% from Q4’ 19 to $5.5billion, or $0.59 per share.
However, the company’s WealthManagement business “finished 2020with record client balances” and assetsunder management, the firm reported.
It’s GWIM division reported that its
total client AUM increased 10% from the
prior year to $1.41 trillion in Q4’ 20. Total
client balances, which include loans,
Merrill AUM grew 11% to $1.1 tril-
lion, and its client balances increased
10% to $2.81 trillion. Private Bank AUM
grew 9% to $313 billion, the firm said,
and client balances increased 11% to
WIM net income fell to $3.1 billionfrom $4.3 billion for the year, whilerevenue fell 5% to $18.6 billion due tothe impact of low interest rates, it said.Of that total revenue, $15.3 million camefrom Merrill GWM, down from $16.1billion a year earlier, while $3.3 billioncame from Private Bank, down from$3.4 billion.
MORGAN STANLEY’S NEW CLIENT
The level of new client assets in MorganStanley’s wealth management business soared 144% to $66.1 billion in thefourth quarter of 2020 from the year-ago period, the firm said in January.This figure includes both advisor-ledand self-directed assets.
By Jeff Berman
Merrill Reports Sharp Drop in New Clients
as Asset Flows Weaken
Morgan Stanley hails good growth; Wells Fargo sees net income bump.