The financial services industry has been seemingly dominated by the rise in the number of RIAs, especially over the last few years. As a result, the major wirehouses, while still firmly established and prevalent, were more or less considered on the endangered or soon-to-be-extinct list following the impact of the Great Financial Crisis.
While it might be too soon to officially say that wirehouses are making a complete comeback, the four big names of Merrill, Morgan Stanley, UBS, and Wells Fargo, have recently all disclosed unprecedented achievements in terms of revenues, earnings, financial advisors, new households, and assets.
Merrill has made big strides so far in 2023, welcoming nearly 200 new advisors in the first two quarters, elevating their total advisor headcount to over 19,000. On top of the addition of new advisors, they’ve also added 26,000 new client relationships, surpassing the prior year’s figure by over 100%. Their recent earnings report also highlighted the fact that they’ve boasted 26 consecutive quarters of business growth.
At the same time, Morgan Stanley has continued to post record revenues in its wealth division. Their most recent report shows that the second quarter brought net revenues of $6.7 billion, marking a 16% increase compared to a year ago. They also added $89.5 billion in net new assets in Q2, contributing to a total of $199 billion for the first half of 2023. This puts them close to the combined net new assets of Charles Schwab’s retail brokerage and RIA custody divisions, which totaled $222.7 billion.
Rounding out the big four, the wealth divisions of UBS and Wells Fargo have both recently made notable progress in their results, despite challenges stemming from banking and other brand-related concerns associated with their respective parent companies. UBS has reported an increase of almost 90% in their wealth management revenues, while also announcing their plans to expand their wealth management operations in the US. Meanwhile, Wells Fargo has seen an uptick in new advisors for the first time in several years.
Wirehouses may continue to lose talent to the independent space, as we’ve seen a great deal of in the last decade, but their recent successes have turned some heads. With some of the structural changes being made by these big names, wirehouses might make a more significant resurgence.