AssetMark adds advisors while hitting multiple all-time earnings highs in Q2

August 3, 2023 10:40 AM

AssetMark financial advisors continue to secure quarterly earnings wins for the Concord, California-based turnkey asset management program and outsourced investment technology firm.

The firm saw its second quarter 2023 net income climb 29.7% to $32.9 million from the $25.3 million it brought in one year before. Overall platform assets and assets from engaged advisors were also up year over year.

In a prepared statement released alongside the financials on Aug. 2, CEO Natalie Wolfsen said the company continues to grow, adding that the firm's new producing advisors helped lock down all-time highs in revenue, adjusted EBITDA, adjusted net income and adjusted EPS — each of which increased by more than 20% year over year.

"We ended the quarter with over $100 billion of platform assets, an all-time high," Wolfsen said. "Our 2023 Net Promoter Score was a record 72, eclipsing our previous record by 5 points — a powerful testament to the value we bring to our over 9,300 advisors.

"The first half of the year has been outstanding, and I am excited to deliver what we have planned for advisors in the second half of 2023."

To see the key takeaways from AssetMark's earnings statements for financial advisors and other wealth management professionals, scroll down our slideshow.

Advisors on the platform

The total number of advisors working with AssetMark rose by a net 632 representatives to 9,323 by the end of Q2 2023. The new total represents a year-over-year increase of 7.3%. The number defined by the firm as "engaged advisors" with at least $5 million across its platforms was 3,032, up 13.9%, or 369 advisors, year over year. More than 2,700 new households and 188 new producing advisors joined the AssetMark platform in the second quarter, pushing the total number of households to 247,934 by the period's end.

Platform assets

Assets managed on AssetMark's platform rose 22.7% year over year to $100.8 billion. Quarter over quarter, platform assets were up 4.7% due to market impact net of fees of $2.9 billion and quarterly net flows of $1.7 billion.

At $93.1 billion, assets from engaged advisors were up 24.2% from $75 billion one year ago. Production lift, a measure of the annualized organic growth of the practices, was 20.2% in the second quarter, up from 17.4% in the first quarter of 2022. Assets under custody also saw a bump year over year to $74 billion from the $63 billion recorded at the end of the previous quarter.

Firm leaders said the production lift results are a sign that AssetMark advisors "continued to grow organically and increase wallet share on our platform."

The bottom line

AssetMark recorded net income for the quarter of $32.9 million, or 44 cents per share. Adjusted net income for the quarter was $41.2 million, or 55 cents per share, on total revenue of $183.2 million.

Adjusted EBITDA for the quarter was $60.4 million, or 33% of total revenue, and year-to-date annualized net flows as a percentage of beginning-of-year platform assets were 7.3%.

The results fell shy of some Wall Street expectations. The average estimate of four analysts surveyed by Zacks Investment Research was for earnings of 57 cents per share. The posted revenue of $183.2 million also missed analysts' expectations of $184 million.

AssetMark Financial shares have increased 25% since the beginning of the year, and have experienced a climb of 45% over the past 12 months.