Wells Fargo Reports Record Wealth Management Assets
Wells Fargo reported $1.8 trillion in client assets in its wealth and investment management segment, which encompasses Wells Fargo Advisors, the Private Bank, Abbot Downing, Wells Fargo Institutional Retirement and Trust and Wells Fargo Asset Management, the company says. That’s a 9% increase from the year prior, which the firm attributes to continued asset inflows and higher market valuations. Client assets grew across the board, including in its retail brokerage, up 10% from the year prior; its wealth management unit, where assets grew 5%; and its retirement accounts assets, which grew 7%, according to the firm.
But net income in the wealth and investment management segment fell from $653 million in the last quarter of 2016 to $623 million, according to the company. That’s still a 22% increase from the $512 million the unit reported for the first quarter of 2016, however.
In addition, revenue in the first quarter this year grew $119 million from the prior quarter to $4.2 billion, which Wells Fargo attributes to bigger gains in deferred compensation plan investments, net interest income and other fee income.
Wells Fargo’s gains in wealth management assets may come as a surprise to some industry observers. Recruiters have said the bank scandal was hurting Wells Fargo’s advisors. Last fall, Wells Fargo paid $185 million in fines over revelations that its retail branch employees opened up to two million bogus deposit and credit accounts without customers’ knowledge, and industry experts have said that the scandal had tainted the Wells Fargo brand. Close to 200 reps left Wells Fargo Advisors in the last quarter of 2016.
Regulators, meanwhile, are still keeping a close eye on the bank as well as on its financial advisors. Earlier this month, the Occupational Safety and Health Administration ordered Wells Fargo to pay $5.4 million to an unnamed wealth advisor who had reported fraudulent activity at the bank and got fired in retaliation.