Bank of America said it had a net loss of $8.8 billion, or $0.90 per share, for the second quarter, compared with net income of $3.1 billion, or $0.27 per share, in the year-ago period. Revenue fell to $13.23 billion from $29.15 billion a year ago as the company settled mortgage-related issues.
Total sales for the global-wealth-and-investment management (GWIM) unit, led by Sallie Krawcheck, were nearly $4.5 billion in the second quarter vs. $4.2 billion a year ago and $4.5 billion in the first quarter of 2011. Total client balances were $2.20 trillion, up from $2.05 trillion a year ago and down slightly from $2.23 trillion in the first quarter of 2011.
Net income for GWIM was $506 million, up from $329 million in the year-ago quarter but down from $533 million in the previous quarter. Return on equity for the group rose to 11.54 percent in the most-recent period vs. 7.27 percent last year and 12.06 percent in earlier quarter.
The number of Merrill Lynch advisors rose to 16,241 in the second quarter, up from 15,299 last year and 15,695 in the first quarter. Sales (or fees and commissions) per advisor on a trailing-12-month basis totaled $894,000 in Q2 vs. $843,000 last year and $931,000 in Q1.
Revenues for all Merrill Lynch advisors were $3.494 billion, up from $3.138 billion a year ago and down from $3.540 billion in the first quarter.
Total client balances for Merrill Lynch were $1.54 trillion in the second quarter, up from $1.40 trillion a year ago but a slight drop from $1.55 trillion in the first quarter of 2011.This means that average assets per advisor are now about $95 million.
Bank of America says that — as part of its expansion of the mass-affluent-investor Merrill Edge platform — it has hired 70 financial solutions advisors (FSA) to be added to banking centers in the New York region. This hiring is part of BofA's plan to double the number of Merrill Edge advisors to 1,000 by year-end.
Morgan Stanley
Morgan Stanley reported a net loss of $0.38 per share for the second quarter vs. a gain of $0.80 a year ago. Revenue was $9.3 billion vs. $8 billion a year ago. Earnings per share for Q2 included a negative adjustment of about $1.7 billion, or $1.02 per share, related to Morgan Stanley's conversion of preferred stock, held by Mitsubishi UFJ Financial Group, into common stock.
In global wealth management, continued cuts to the advisor force contributed to improvements in both average revenue (or fees and commissions) per advisor and average assets under management per FA. The wealth unit, led by James Gorman, had net revenues of $3.5 billion, client assets of $1.7 trillion and 17,638 advisors worldwide. Net new assets for the quarter were $2.9 billion with net flows in fee-based accounts of $9.7 billion.
Net revenues for the global wealth unit were $3.5 billion, up 13 percent from a year ago and 1 percent from the previous quarter. Average trailing-12-month FA productivity (or fees and commissions) was $785,000 — up 16 percent from last year and 2 percent from the first quarter. Assets per advisor in the second quarter averaged $97 million, a jump of 17 percent from last year and unchanged from the previous period.
The firm's FA headcount of 17,638 was down 440 from the same year-ago period and 162 from March 30, as the brokerage firm continues to "prune underperformers," it said in a statement.
Positive net new assets were $2.9 billion, representing an $8.4 billion turnaround from 2Q10, when net asset outflows totaled $5.5 billion. The latest quarter's net inflows, though, were down from the $11.4 billion experienced in the first quarter.
Net income for the unit, after taxes of $138 million and a non-controlling interest allocation to Citigroup of $4 million, was $180 million, topping last year's results by 64 percent and down 2 percent from the first quarter.
Wells Fargo
Wells Fargo reported record net income of $3.9 billion, or $0.70 per share, for the second quarter of 2011, up from $3.1 billion, or $0.55 per share, a year ago and a slight increase from $3.8 billion, or $0.67 per share, for the first quarter of 2011. Revenue was about $20.39 billion, compared with $20.33 billion in first quarter 2011 and $21.39 billion in the same year-ago quarter.
The Wealth, Brokerage and Retirement group — which includes Wells Fargo Advisors — had net income of $333 million in the June quarter, up from $270 million a year ago but down slightly from $339 in the March quarter.
Revenue for the group was $3.1 billion, up 8 percent from the year-ago period and down 2 percent from first quarter 2011 due to lower brokerage transaction revenue, according to the company.
Wells Fargo Advisors, led by David Carroll, says it is the nation's third-largest brokerage business with 15,194 financial advisors and about 3,800 bankers — for a total number of 18,989 licensed professionals. Nearly 11,100 financial advisors work in the traditional brokerage channel of Wells Fargo Advisors. The firm's in-bank brokerage channel employs 2,708 FAs and 3,795 licensed bankers located in Wachovia and Wells Fargo bank stores.
In the prior quarter, Wells Fargo had 200 more licensed professionals or 19,194 FAs, 15,236 traditional FAs and 3,958 licensed bankers. At the end of 2010, WFA had 19,574 advisors — with 15,188 in non-bank channels and 4,386 in banks. Year over year, Wells Fargo says the number of traditional FAs is up 1 percent.
For the retail brokerage operations, client assets of $1.2 trillion were up 12 percent from the prior year. Managed account assets increased $62 billion, or 31 percent, from a year ago "driven by strong net flows and solid market gains," according to Wells Fargo.
Average assets per FA are roughly $63 million, including the bank advisors; excluding this group, average AUM is $80 million per FA. Average annualized sales or production per FA based on the latest quarter's results stands at $653,000 vs. $669,000 in the previous quarter. Excluding bank reps, this figure is roughly $816,000 vs. $840,000 in Q1.
During the second quarter, the company announced the sale of H.D. Vest Financial Services.
