Meanwhile, the wealth unit’s totalclient assets grew 48% year over year to$4 trillion, encompassing $832 billion inself-directed assets. Advisor-led assetsrose 21% from a year ago and 15% fromthe prior quarter to nearly $3.2 trillion.
Morgan Stanley’s financial advisorheadcount grew by 482 from a yearago and from 481 in the prior quarterto 15,950.
Total net new assets across wealthmanagement for the year was $206billion, up from $98 billion in 2019.
However, fee-based assetflows slid 3% in Q4 to $24.1billion. Morgan Stanley isno longer releasing average12-month fees and commissions (or production) peradvisor.
In the fourth quarter, thewealth unit had a 24% year-over-year jump in revenuesto $10.96 billion, while netincome fell 10% to $889 million. For the full year, thebusiness grew sales 7% from
2019 to $10.96 billion, as profits dropped
10% to $3.42 billion.
Firmwide, Morgan Stanley’s fourth-quarter revenue jumped 24% to $5.7billion, while its net income fell 10% to$802 million. For the full-year 2020, thebank had a 22% increase in net incomefrom the prior year at $11 billion. Totalrevenues rose 16$ to $48.2 billion.
Despite challenges in 2020 fromthe COVID- 19 pandemic, MorganStanley “delivered record results” lastyear, James Patrick Gorman, its CEOand chairman, told analysts in a conference call.
The company “successfully closedour acquisition of E-Trade” in 2020,“received an upgrade from Moody’s toA2, were placed on review for upgradea second time and announced our intentto acquire Eaton Vance,” he noted.
Then last month, after the Federal
Reserve’s release of its second stress test
result, Morgan Stanley announced a $10
billion buyback program that “we intend
to execute in 2021,” he told analysts.
“Our performance and competitive position serve as hard evidence that MorganStanley has reached an inflection point.”Although 2021 “will be a transitionyear as we absorb two major acquisitions, our focus remains on positioningMorgan Stanley to achieve our long-term strategic targets,” he went on to say.
The firm’s “long-term aspirationand frankly, our belief is that Wealth
Management will generate a marginover 30% by 2022 and, in that period, weexpect to range from 26% to 30% as wecontinue to work through the E-Tradeintegration,” he said.
The company plans to “invest in manyaspects of our business for growth, butwe’ll balance this with discipline,”Gorman told analysts.
WELLS FARGO POSTS RISE IN
Wells Fargo topped estimates with netincome of $2.99 billion, or $0.64 pershare, for the fourth quarter of 2020,a 4% rise from $2.87 billion, or $0.60cents per share, a year earlier. Revenue,though, fell by 10% to $17.93 billion inthe quarter from $19.86 billion a yearearlier and missed estimates.
The firm also released new figures
on the performance of its Wealth and
Investment Management business,
“Although our financial performance
improved and we earned $3 billion in
the fourth quarter, our results continued
to be impacted by the unprecedented
operating environment and the required
work to put our substantial legacy issues
behind us,” CEO Charlie Scharf said in
For the fourth quarter, theWealth and InvestmentManagement business saw itstotal revenue drop 4% yearover year to $3.8 billion. Netincome, however, rose 157%from the year-ago quarter to$548 million.
The number of both financial and wealth advisors inthe fourth quarter stood atWells Fargo Advisors’ advisor headcount on Oct. 31 was down by 2,178advisors, or 14%, from Sept. 30, 2016,when news of its fake-accounts scandalbroke widely. The full unit’s headcountis 29,515 vs. 30,229 a year ago.
Total assets for the unit were $2 trillion as of Dec. 31, 2020, up 6% fromlast year. Excluding Asset Managementoperations, assets were $1.4 trillion.
Jeff Berman can be reached at firstname.lastname@example.org.
Morgan Stanley “successfully
closed our acquisition of
E-Trade” in 2020, “received an
upgrade from Moody’s to A2,
… and announced our intent to
acquire Eaton Vance.”
—James Gorman, CEO and Chairman