Bank of America and Morgan Stanley beat analysts' expectations in the fourth quarter, with Merrill Wealth boasting $22.9 billion in revenue, a 9% year-over-year increase, and net income rising 13% in its wealth division. Morgan Stanley.
On Merrill's fourth-quarter earnings call for its wealth business, Merrill Wealth Co-CEOs Lindsay Hans and Eric Schimpf detailed highlights, including the firm reaching $3.6 trillion in client balances by the end of the year, a 12 % from year to year. growth. The firm landed nearly 24,000 new relationships in 2024, with 72% of those holding more than $500,000 in assets, compared to 60% in 2023.
Hans also provided more details about the firm newly announced advisory group for financial advisors working with extremely high net worth clients, which the web office defined as clients with more than $10 million in assets. Hans said the firm had been mapping growth in this client segment for more than two decades, and advisers would benefit from another team to help them deliver customized portfolios.
“We think of this as a single point of contact for advisors to access all the capabilities at Merrill and Bank of America,” she said. “So think custom lending services, trust and estate planning, philanthropy, art services and more.”
Advisor and Merrill client interest in alternative investments continued unabated, with an 11% increase in advisor alt adoption through the end of 2024 compared to the end of 2023. Clients with alts in their portfolios nearly tripled in the past five years, and the firm is expected to equate its 2024 expansion of 50 new solutions to its alts platform to 2025, according to Hans.
She also briefly discussed the impact of the Los Angeles fires on clients and employees, noting that Merrill has financial advisors and client associates (and, by extension, clients) in the affected regions. Hans said that in addition to making sure employees and their families were safe, counselors were updating clients' records if they evacuated so counselors across the country could contact them quickly.
“So this sounds very basic, but again, (we) put the health, safety and security of our customers and families first,” she said. “Then, as things develop, (we're) offering a lot to our advisors to make sure we're able to answer the questions that come in from clients at this point, which, as you can imagine … span the whole spectrum depending on the client's situation. “
Morgan Stanley earnings showed the firm's fourth-quarter net interest income held steady, with Wirehouse reporting that “higher yields in the investment portfolio and increased lending” had outweighed lower average deposits.
In an Oct. call describing the firm's earnings for the third quarterMorgan Stanley Chief Financial Officer Sharon Yeshaya had said the firm expected net interest income to be “modestly down” in the fourth quarter due to lower rate expectations.
However, according to its latest earnings, NII grew from $1.77 billion to $1.88 billion quarter over quarter.
“Looking ahead to 2025, the combination of a more stable deposit mix, higher loan balances and rate outlook suggests that the first quarter should not deviate materially from our fourth quarter results,” Yeshaya said on the call. of the company's income for the fourth quarter. Thursday.
Morgan Stanley's wealth management division saw net income of $7.5 billion, up 13% year over year. Asset management revenue hit a record high, with total net revenue growing 8% from 2023. Total client assets stood at about $6.2 trillion, up 4% quarter-over-quarter and 21% more than last year.
Client assets led by financial advisors increased 2% from the previous quarter. However, in an analysis for Wolfe Research, analyst Steven Chubak argued that the firm's leading asset performance indicators were “more mixed” than it appeared. While sweeper deposits and NII fared better than expected, overall net new assets fell short of the firm's target (which Chubak defined as inflows of $56 billion versus a desired target of $80 billion for the quarter).