Is the bull back? Merrill brokerage biz soars as BofA earnings sag

Is the bull back? Merrill brokerage biz soars as BofA earnings sag
Bank of America's Global Wealth and Investment Management division — and specifically the Merrill Lynch brokerage operation — continue to benefit from improving markets.
APR 20, 2011
Bank of America's Global Wealth and Investment Management division — and specifically the Merrill Lynch brokerage operation — continue to benefit from improving markets. During BofA's first-quarter earnings call today, bank executives called it “one of [the division's] strongest quarters since the acquisition of Merrill Lynch,” which closed just over two years ago. BofA's global wealth and investment unit, which is comprised of Merrill Lynch, U.S. Trust and other Bank of America retirement services operations, posted record revenues of $4.49 billion and net income of $531 million — 22% better than the fourth quarter of 2010. Revenues at Merrill Lynch rose 18% from the same quarter last year to $3.54 billion. Meanwhile, BofA reported in the earnings call that its overall revenue declined 16% since the fourth quarter, while profits dropped 36% to just over $2 billion. Merrill Lynch's successful quarter seems to have been the result of both gains in client asset bases and an overall increase in new recruits. Total client asset balances at Merrill Lynch were up 7% to $1.55 trillion over the first quarter of last year. They were down 2%, however, to $345 billion at U.S. Trust. The retention bonuses paid to Merrill Lynch advisers at the beginning of last year, meanwhile, appear to be paying some dividends, with the firm experiencing near-record-low turnover rates. The firm added 184 net new financial advisers in the quarter, giving it a total of 15,695 as of March 31. It's the seventh consecutive quarter the firm has increased the number of financial advisers on staff. The Merrill Lynch advisers also continued to become more productive, earning an average annualized $931,000 in fees and commissions during the quarter. That's up 2% from the previous quarter and 14% better than the first quarter of 2010. The number of advisers at U.S. Trust essentially remained flat, with the unit adding two “client-facing professionals” to give it a total of 2,313. The firm does not disclose production figures for U.S. Trust advisers. Competitors Morgan Stanley Smith Barney LLC and Wells Fargo & Co. will report results next week and UBS Wealth Management will report April 26.

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