Page 47 - Investment Advisor March 2021

Meanwhile, the wealth unit’s total result, Morgan Stanley announced a $10 including the average level of yearly
client assets grew 48% year over year to billion buyback program that “we intend revenue per advisor. These figures have
$4 trillion, encompassing $832 billion in to execute in 2021,” he told analysts. been shared quarterly by other wire-
self-directed assets. Advisor-led assets “Our performance and competitive posi- houses, such as Morgan Stanley and
rose 21% from a year ago and 15% from tion serve as hard evidence that Morgan Merrill, for some time.
the prior quarter to nearly $3.2 trillion. Stanley has reached an inflection point.” “Although our financial performance
Morgan Stanley’s financial advisor Although 2021 “will be a transition improved and we earned $3 billion in
headcount grew by 482 from a year year as we absorb two major acquisi- the fourth quarter, our results continued
ago and from 481 in the prior quarter tions, our focus remains on positioning to be impacted by the unprecedented
to 15,950. Morgan Stanley to achieve our long- operating environment and the required
Total net new assets across wealth term strategic targets,” he went on to say. work to put our substantial legacy issues
management for the year was $206 The firm’s “long-term aspiration behind us,” CEO Charlie Scharf said in
billion, up from $98 billion in 2019. and frankly, our belief is that Wealth a statement.
However, fee-based asset
flows slid 3% in Q4 to $24.1 Morgan Stanley “successfully WEALTH AND
billion. Morgan Stanley is INVESTMENT UNIT
no longer releasing average closed our acquisition of For the fourth quarter, the
12-month fees and commis- E-Trade” in 2020, “received an Wealth and Investment
sions (or production) per Management business saw its
advisor. upgrade from Moody’s to A2, total revenue drop 4% year
In the fourth quarter, the over year to $3.8 billion. Net
wealth unit had a 24% year- … and announced our intent to income, however, rose 157%
over-year jump in revenues from the year-ago quarter to
to $10.96 billion, while net acquire Eaton Vance.” $548 million.
income fell 10% to $889 mil- The number of both finan-
lion. For the full year, the —James Gorman, CEO and Chairman cial and wealth advisors in
business grew sales 7% from the fourth quarter stood at
2019 to $10.96 billion, as profits dropped Management will generate a margin 13,513 — versus 14,414 a year ago and
10% to $3.42 billion. over 30% by 2022 and, in that period, we 13,793 in the prior quarter. These advi-
Firmwide, Morgan Stanley’s fourth- expect to range from 26% to 30% as we sors had average yearly fees and com-
quarter revenue jumped 24% to $5.7 continue to work through the E-Trade missions of $1.013 million vs. $1.002
Merrill: Ken Wolter; Morgan Stanley: 4kclips; Wells Fargo: ARTYOORAN
billion, while its net income fell 10% to integration,” he said. million a year ago and $943,000 in the
$802 million. For the full-year 2020, the The company plans to “invest in many prior quarter. In its third-quarter finan-
bank had a 22% increase in net income aspects of our business for growth, but cial report, Wells Fargo reported that it
from the prior year at $11 billion. Total we’ll balance this with discipline,” had 12,908 financial advisors, down 815,
revenues rose 16$ to $48.2 billion. Gorman told analysts. or 6%, from a year ago and 391, or 3%,
Despite challenges in 2020 from from the prior quarter.
the COVID-19 pandemic, Morgan WELLS FARGO POSTS RISE IN Wells Fargo Advisors’ advisor head-
Stanley “delivered record results” last NET INCOME count on Oct. 31 was down by 2,178
year, James Patrick Gorman, its CEO Wells Fargo topped estimates with net advisors, or 14%, from Sept. 30, 2016,
and chairman, told analysts in a con- income of $2.99 billion, or $0.64 per when news of its fake-accounts scandal
ference call. share, for the fourth quarter of 2020, broke widely. The full unit’s headcount
The company “successfully closed a 4% rise from $2.87 billion, or $0.60 is 29,515 vs. 30,229 a year ago.
our acquisition of E-Trade” in 2020, cents per share, a year earlier. Revenue, Total assets for the unit were $2 tril-
“received an upgrade from Moody’s to though, fell by 10% to $17.93 billion in lion as of Dec. 31, 2020, up 6% from
A2, were placed on review for upgrade the quarter from $19.86 billion a year last year. Excluding Asset Management
a second time and announced our intent earlier and missed estimates. operations, assets were $1.4 trillion.
to acquire Eaton Vance,” he noted. The firm also released new figures
Then last month, after the Federal on the performance of its Wealth and Jeff Berman can be reached at jberman@
Reserve’s release of its second stress test Investment Management business, alm.com.

MARCH 2021 INVESTMENT ADVISOR 45