Results for Bank of Americas Global Wealth and Investment Management division ticked down slightly in the third quarter as seasonally low market activity cut into revenue.
The group, which includes Merrill Lynch and the ultra-high net worth brokerage U.S. Trust, posted revenue of $4.39 billion, down from a record $4.50 billion in the second quarter but still up 8% from last years quarter. Merrill Lynch accounted for $3.65 billion of that revenue, down from $3.74 billion in the second quarter. U.S. Trust bought in $730 million, which was $10 million less than the previous quarter, but is up from $656 million in the third quarter last year.
[Global Wealth and Investment Management] produced another strong performance which, although slightly off last quarters record-setting pace due to reduced market activity and seasonality, far surpasses our results from a year ago, a spokesperson said in an emailed statement on earnings for the unit.
Compensating for the lower market activity, the firm increased its assets and fee-based revenue. Client balances at Merrill Lynch, which also include clients assets, loans and deposits custodied at other divisions of the bank, rose $54 billion to $1.853 trillion. Assets at U.S. Trust leapt up more than $10 billion and recovered from a slight dip in the second quarter to hit $363 billion.
The firm improved its fee-based revenue on those assets as well. Asset management fees for the entire Global Wealth and Investment Management division hit a record $1.7 billion.
Asset management fees achieved a record while our brokerage income did decline from the second quarter due to reduced market activity, Bank of Americas chief financial officer, Bruce Thompson, said in a conference call.
Both Merrill Lynch and U.S. Trust also continued to benefit from cross-selling of products and services from the bank to wealth management clients. Client loan balances in the Global Wealth segment rose 2% in the quarter to a record $117.2 billion, which was up 11% from $106 billion in the second quarter last year.
Client engagement remains quite strong, Thompson said on the call. We continue to provide more banking products to both our Merrill Lynch and U.S. Trust clients.
Headcount at Merrill Lynch continued to trend down, although the firm said that retention of top producers remained high. After having 15,302 advisors in the year-ago quarter, the firm said it had 14,039 advisors as of the end of June, 2013. Merrill Lynch shed 133 advisors in the third quarter of this year alone, primarily off-target advisors and those from its training program.
There were 279 private client advisors at U.S. Trust at the end of the third quarter, up more than 10% from a year ago.
Average financial advisor productivity at Merrill Lynch slipped slightly from the second quarter to $1 million, as experienced advisor productivity remained at $1.3 million, the firm said.
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