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.