Bank of America wealth management reports boost in fresh fee-based assets

Fee-based advisory assets at Bank of America’s global wealth and investment management group had net inflows of $21 billion for the three months ending in September, the bank reported Tuesday morning, but the lion’s share, $18 billion, came from the bank’s Merrill Wealth Management group.

Those assets came from new clients plus a shift from brokerage to investment advisory programs, said Lindsay Hans, president and co-head of Merrill Wealth Management during a conference call with reporters Tuesday morning. “There was also cash moving off the sidelines,” she added.

The bank’s global wealth and investment management client balances reached $4.2 trillion at the end of the quarter, up 18% from the same time last year, driven by higher market valuations and positive net client flows, the company reported.

The bank’s global wealth and investment management business reported net income of $1.06 billion for the third quarter, up 2.6% for the same time last year.

Noninterest expenses at the wealth management division of $4.3 billion increased 10%, driven primarily by revenue-related incentives.

Meanwhile, the bank’s financial advisors, including those at Merrill and its private bank, are expanding their relationships with customers, one executive said, particularly into banking. Pushing financial advisors to focus more on banking, a practice known as cross-selling, has been a longstanding criticism of the Merrill Lynch strategy by some in the financial advice industry.

“With a continued increase in banking product usage from our investing clients, the diversity of our revenue base continues to improve,” said Alastair Borthwick, Bank of America’s chief financial officer, Tuesday morning in a separate call with analysts to review Bank of America Corp.’s third quarter earnings. “More than 60% of our wealth clients now have banking products with us and 30% of our revenue is now in net interest income to complement the fees earned in our advice model.”

At the end of last year, Merrill Lynch reported a total of 18,916 client-facing financial advisors across its various business models. In its earnings reports released this year, Bank of America, Merrill's parent company, has so far not reported its financial advisor headcount, a move that its competitors Morgan Stanley and Wells Fargo & Co. have also made.

Competitors of the wirehouses have privately criticized the lack of reporting of the number of financial advisors at those firms, but Merrill Wealth Management executives on Tuesday noted that attrition of experienced financial advisors is below the firm’s historical average.

Earlier this year, InvestmentNews reported that Merrill Lynch had a net drop of 1,043 financial advisors in 2021, the year after Covid-19 brought most broker movement to a standstill.

That fell to a net decline of 703 financial advisors in 2022 and, last year, to a drop of 445, or less than half the amount seen two years earlier.