Yet despite the success in its advisory business, Wells Fargo saw a drop in earnings since the fourth quarter. In its first quarter results released yesterday, the bank reported a net income of $2.5 billion and revenue of $21.4 billion, down 1% since the fourth quarter but up 2% over the first quarter of 2009.
Wells Fargo said its Wealth, Brokerage and Retirement division—which includes its advisory and retirement businesses—reported net income of $282 million, up $298 million from prior quarter, and up $106 million, or 60%, from prior year. The bank noted that the fourth quarter results were affected by Wells Fargo’s auction-rate securities settlement last year (see “Wells Fargo Agrees to $1.4M Buyback of ARS”). Revenue in the unit was $2.9 billion, up 10% from the prior quarter, and up 16% from the first quarter of 2009.
In its retail brokerage division, including Wells Fargo Advisors, client assets increased $1.1 trillion, up 22% from the prior year.
Broker headcount was up 160 advisers over the fourth quarter to 15,119, according to news reports. That number compares to brokerage rivals Morgan Stanley Smith Barney’s 18,140 reps and Bank of America Merrill Lynch’s 15,005 reps. Wells Fargo said earlier this year that it hoped to add 1,000 new brokers in 2010 (see “Wirehouses Plan Retention, Recruitment for 2010”). The firm also boasted that brokers who joined the firm were two times more productive than those who left the firm.
Morgan Stanley Smith Barney and Bank of America Merrill Lynch also reported an increase in client assets and steady recruitment of advisers in the first quarter (see “Merrill Profits Fall as Assets Shift to BofA Retail Division” and “MSSB Bolsters Revenue for Morgan Stanley”).
In its Wealth Management Group, serving affluent and high-net-worth clients, Wells Fargo saw strong deposit growth, with average balances up 38% from prior year.
Wells Fargo’s institutional retirement plan assets of $232 billion increased $60 billion, or 35%, from 2009. Individual retirement account (IRA) assets of $248 billion increased $54 billion, or 28%, from 2009.