Wells Fargo Advisors' profit soars

Wirehouse raked in $544 million, up 25% from the year-earlier quarter

Jul 11, 2014 @ 8:57 am

By Mason Braswell

Wells Fargo Advisors' profit rocketed up in the second quarter , jumping up to $544 million, a 25% increase from the year-earlier quarter.

The wealth, brokerage and retirement unit, which comprises roughly 15,189 advisers divided between employee and independent networks, enjoyed strong growth in revenue, thanks to growth in asset-based fees and a $25 million boost from a reversal for credit losses. For the three months ended June 30, total revenue of $3.6 billion marked an $82 million, or 2%, rise from the previous quarter.

“The strong year-over-year growth reflects strong revenue growth and growth in recurring revenue,” the firm's chief financial officer, John Shrewsberry, said on a call with investors.

An increase in client assets helped boost fee revenue as well. Total assets in the division hit $1.6 trillion, up 12% from the year-earlier quarter.

Approximately $409 billion in client assets were in managed accounts, a 24% increase from last year driven by market performance and “client demand for plan based adviser solutions,” Mr. Shrewsberry said.

The firm also increased its cross-sell ratio on those assets to 10.44 products per household, up from 10.35 a year ago. Average loans were up 12%.

That helped to offset expenses, which continued to rise quarter-over-quarter. Wells Fargo & Co. said that noninterest expenses totaled $2.7 billion, up from $2.5 billion a year ago. The firm attributed the increase to higher deferred-compensation-plan expense, increased broker commissions and “higher other expenses.”

The total number of advisers ticked down about 1% from the year-earlier quarter. Around 11,000 of those are in the employee channel. The other portion consists of bank brokers and advisers in the independent unit, Wells Fargo Advisors Financial Network. The firm does not break out exact numbers for each division.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

How to differentiate from the competition

How does Black Diamond's technology play a role in allowing an advisor firm to differentiate itself from the competition? Bob Conchiglia joins us for a discussion.

Latest news & opinion

Raymond James executives call on industry to keep broker protocol

Also ask firms to pay for the administration of the protocol to 'ensure its longevity and relevance.'

Senate committee approves tax plan but full passage not assured

Several Republican senators expressed reservations about the bill, and the GOP cannot afford too many defections.

House passes tax bill, focus turns to Senate

Tax reform legislation expected to have more of a challenge in upper chamber.

SEC enforcement of advisers drops in Trump era

The agency pursued 82 cases against advisers and firms in fiscal year 2017, down from 98 the previous year.

PIABA accuses Finra of conflicts of interest

Public Investors Arbitration Bar Association report slams self-regulator over its picks for board of governors.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print