Page 46 - Investment Advisor March 2021

BROKER-DEALER BEAT

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.

he number of net new client
households for Merrill Lynch
TWealth Management advisors
fell to 22,000 in 2020 from 35,000 in
2019 — representing a 37% decline.
Despite the dramatic drop-off, the
company called last year’s achievement
“pretty extraordinary given the envi-
ronment,” noting that was “four times
the pre-2017 household acquisition lev-
els.” The additions included 5,000 net
new households in the fourth quarter,
Merrill said.
Also, net client asset flows to Bank of
America’s Global Wealth & Investment
Management (GWIM) unit — which
includes both Merrill Lynch and BofA by 429 in the recent quarter to 17,331 grew 10% to $3.35 trillion.
Private Bank — were down 21% for the as of Dec. 31, 2020. Also, the number of Merrill AUM grew 11% to $1.1 tril-
full-year 2020 at $19.6 billion vs. $24.9 Private Bank advisors slipped by 7 from lion, and its client balances increased
billion a year ago, and fell 7% year over a year ago and by 11 in the prior quarter 10% to $2.81 trillion. Private Bank AUM
year to $7.60 billion in Q4’20. to 1,759, the firm said. grew 9% to $313 billion, the firm said,
Plus, the GWIM business reported Merrill’s average advisor 12-month and client balances increased 11% to
a 16% year-over-year drop in Q4’20 trailing fees and commissions (or pro- $541 billion.
net income to $836 million from $1 duction) level was $1.17 million vs. $1.11 WIM net income fell to $3.1 billion
billion. Revenue fell roughly 4% from million in Q4’19. For the full-year, it was from $4.3 billion for the year, while
a year ago to $4.7 billion. Of that total $1.13 million vs. $1.08 million in 2019. revenue fell 5% to $18.6 billion due to
revenue, $3.9 billion came from Merrill, the impact of low interest rates, it said.
down from $4 billion, while $831 mil- FINANCIAL DETAILS Of that total revenue, $15.3 million came
lion came from the Private Bank, down BofA’s overall results for the last peri- from Merrill GWM, down from $16.1
from $867 million. od were down from the year-ago quar- billion a year earlier, while $3.3 billion
In addition, Merrill is projecting low ter. Total revenues for Q4’20 fell about came from Private Bank, down from
single-digit growth in the number of 10% to $20.1 billion, while net income $3.4 billion.
its advisors annually over the next five dropped about 21% from Q4’19 to $5.5 Merrill: Ken Wolter; Morgan Stanley: 4kclips; Wells Fargo: ARTYOORAN
years, the company reported. It expects billion, or $0.59 per share. MORGAN STANLEY’S NEW CLIENT
to achieve an increased number of advi- However, the company’s Wealth ASSETS SOAR
sors through the rollout of its advisory Management business “finished 2020 The level of new client assets in Morgan
division strategy in 2021, the strength- with record client balances” and assets Stanley’s wealth management busi-
ening of its advisor development pro- under management, the firm reported. ness soared 144% to $66.1 billion in the
gram, and by increasing the overall It’s GWIM division reported that its fourth quarter of 2020 from the year-
success rate of the next generation of total client AUM increased 10% from the ago period, the firm said in January.
Merrill advisors. prior year to $1.41 trillion in Q4’20. Total This figure includes both advisor-led
The number of Merrill advisors fell client balances, which include loans, and self-directed assets.

44 INVESTMENT ADVISOR MARCH 2021 | ThinkAdvisor.com