Client assets at Merrill Wealth Management reached a record $4.5 trillion in the first quarter of 2024, up 14% from the same period last year, according to company earnings.
This was despite a slowdown in net new customers compared to “big growth” in the first quarter of 2023.
The first quarter earnings of the wires, which showed Merrill Lynch Wealth Management and Merrill Lynch Private Wealth Management generated $5.6 billion in revenue, up 5% year over year, and net income of $1 billion, also marked one year point to Lindsay Hans and Eric Schimpf, presidents and co-CEOs of Merrill Wealth Management, who run the network.
Hans said the higher revenue and profit were driven by increased asset management fees from $25 billion in AUM flows and higher market valuations.
In 2023, Merrill had a record year 40,000 net new customersbreaking the 2019 record of around 35,000. In the first quarter of 2024, wealth businesses added 7,300 net new customers. Hans said this was in line with the previous two quarters, but down year-on-year.
Schimpf said a year ago, interest rates were attractive to customers. He also told about regional banking crisis, which he said benefited the wire because of “customers coming in on a stronger balance sheet and relationship with us.”
The firm signed up over 150,000 net new clients in the past five years, with over 600 locations nationwide managing a record $3.3 trillion in client money.
In the first quarter, Merrill Lynch Wealth Management nearly doubled the new assets generated by inbound referrals from other parts of the company compared to a year ago. Bank of America's consumer bank serves approximately 69 million customers.
“Many of them have the wealth and complexity to be served by a Merrill financial advisor,” Hans said. “If we converted a third of them, we'd double the business at Merrill.”
The firm surpassed the 50% limit for Merrill Lynch Wealth Management clients with an existing Bank of America relationship. Adding customers with a credit relationship increases over 60%. Some markets have seen 70% penetration.
“We fully anticipate those growing,” Schimpf said.