Bank of America sees decline in income for wealth group
Despite the broad stock market’s rise over the past year, with the S&P 500 up almost 19% in that time, Bank of America’s Global Wealth and Investment Management group, which includes Merrill Lynch, reported net income Tuesday morning of $1 billion in the quarter that ended in September, a decrease of 13% compared to the same period last year.
The wealth business reported third-quarter revenue of $5.3 billion, a decline of 2%. That decrease was driven by lower net interest income, which was partially offset by higher asset management fees as a result of higher market levels and asset flows from clients, according to the company.
The bank, which does not provide an advisor head count per business line, reported 19,130 client-facing wealth professionals across its various business lines, a year-over-year increase of 289 advisors.
But it appears Merrill Lynch is having a hard time hanging onto its most experienced, and profitable, financial advisors.
According to InvestmentNews data, which tracks brokers and financial advisors joining or leaving the broker-dealer Merrill Lynch Pierce Fenner & Smith Inc., Merrill has seen a net loss of 298 financial advisors this year through the end of September.
Meanwhile, Bank of America CEO Brian Moynihan pointed to the wealth management group as a weak link in the bank’s chain of businesses in a conference call with analysts Tuesday morning.
When asked about the bank’s efficiency ratio, or its ability to use assets to generate income, Moynihan responded: “One of the big differences between us and other companies you can compare us to is the size of our wealth management business relative to the size of the company is large,” according to a transcript of the conference call. “And as
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