Merrill and Bank of America’s other wealth management units have reported a surge in revenue to an all-time high in the first quarter, despite a slight decrease in new asset inflows.
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Bank of America announced that revenue for its Global Wealth and Investment Management business, which includes Merrill Lynch and its private bank, reached a record of $6.71 billion in the first quarter, marking an 11.6% increase year over year. The majority of this revenue came from $4.2 million in fees charged on assets under management, showing a 15% year-over-year growth. Net income for Bank of America’s wealth units also rose by 32% to $1.33 billion.
Although there was a 15% decline in net asset inflows into the firm’s advisory accounts, amounting to $20.4 billion, Merrill Lynch executives had previously aimed to bring in between $135 billion and $150 billion in new assets annually.
During a call with analysts, Bank of America CEO Brian Moynihan expressed confidence in the direction of the firm’s wealth management team, stating that they are making progress in driving key metrics to desired levels.
Doubling Advisor Recruiting from a Year Ago
Moynihan highlighted the success of Bank of America’s wealth divisions in recruiting advisors, with the first quarter seeing approximately twice the number of new recruits compared to the same period last year. The firm has recently intensified its focus on advisor recruitment after a period of reduced efforts to attract advisors from competitors.
Moynihan also noted the firm’s success in advisor retention, stating that advisor attrition rates have decreased significantly.
Despite the decrease in net inflows, the wealth units’ assets under management saw a 14% year-over-year increase to $2.1 trillion in the first quarter. Total client balances at Merrill Lynch, which encompass investments, deposits, and loans, rose by 9% to $3.8 trillion. Additionally, total balances at the private bank increased by 13% to $757 billion.
Sources: Here
