After a brutal first half of the year that saw the S&P 500 decline into bear market territory by 20.6%, it looks as if the brokerage industry got some relief as the stock market had a great July, with the S&P gaining 9.1% last month.
That turned into a significant bump in a assets for major broker-dealers Raymond James Financial Inc. and LPL Financial.
On Wednesday, Raymond James Financial reported close to $1.19 trillion in client assets under administration at the end of last month, an increase of 6% from the end of June. Likewise, LPL Financial reported last week that total advisory and brokerage assets at the end of July were $1.12 trillion, an increase of 5.6% compared to the end of June.
Both Raymond James and LPL are industry bellwethers, so their reports signal better times ahead, potentially, for wealth management firms over the remainder of the year.
"Client assets increased over the preceding month driven by equity market appreciation and strong adviser retention and recruiting across our multiple affiliation options,” Paul Reilly, chairman and CEO of Raymond James Financial, said in a statement.
Asset levels are of key importance to broker-dealers, who typically charge clients quarterly fees based on the level of assets in clients' accounts at the end of the prior quarter. So regardless of the market volatility over the three months during the quarter, if clients' assets are higher at the end of the quarter than at the start, the broker-dealer can generate more fee revenue from those accounts.
Of course, there's no way to tell where asset levels will be on Sept. 30, when broker-dealers will assess clients' quarterly fees. But the strong July is certainly a plus, and it also helps advisers who may be considering changing broker-dealers.
"The market bounce-back erased the hesitation some advisers may have had about moving to a new firm," said Jodie Papike, president of Cross Search, a recruiting firm. "A lot of the asset level was recaptured, which means clients are feeling more optimistic. So advisers talking to clients about making a move to a new firm won’t be hampered by the market, like they might have been earlier in the year."
While industry statistics pointing to a succession crisis can cause alarm, advisor-owners should be free to consider a middle path between staying solo and catching the surging wave of M&A.
New joint research by T. Rowe Price, MIT, and Stanford University finds more diverse asset allocations among older participants.
With its asset pipeline bursting past $13 billion, Farther is looking to build more momentum with three new managing directors.
A Department of Labor proposal to scrap a regulatory provision under ERISA could create uncertainty for fiduciaries, the trade association argues.
"We continue to feel confident about our ability to capture 90%," LPL CEO Rich Steinmeier told analysts during the firm's 2nd quarter earnings call.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
