One of the industry’s largest clearing and custody firms suffered an outflow of $10 billion in the second quarter, tied to an M&A deal.
The negative net new assets for BNY’s Pershing reported in the megabank’s July 15 earnings statement came from “the deconversion of a client that was acquired by a self-clearing competitor,” Chief Financial Officer Dermot McDonogh said in prepared remarks on the company’s call with analysts, according to a transcript by The Motley Fool. He didn’t say which wealth management client dropped Pershing or for what acquiring firm, and representatives for the company said it doesn’t disclose exiting customer relationships as a matter of policy.
So it wasn’t clear whether the losses stemmed from further deconversions related to JPMorgan Chase’s acquisition of First Republic in 2023, the substantial deals struck by LPL Financial or another self-clearing firm’s moves. Regardless, that outflow was less than half of the $23 billion in losses sustained by Pershing in the second quarter of 2024, and Pershing nevertheless collected $513 million in investment services fees — up 8% from the year-ago period. In fact, the segment of BNY that houses Pershing reeled in a profit margin of 49% for the quarter. The firm’s representatives pointed out that Pershing’s revenue and client accounts increased as well.
To see the main takeaways for financial advisors from the second quarter of 2025 for Pershing and BNY’s Investment and Wealth Management segment, scroll down the page. For analysis of the firm’s first-quarter results, click here. And to read FP sister publication American Banker’s coverage of BNY’s overall earnings, follow this link.
Pershing assets under custody or administration
Client holdings at the brokerages and RIAs using Pershing as their clearing and custody firm rose 8% year over year to $2.8 trillion. Average active clearing accounts ticked up 4% to 8.4 million, while daily trades generating a fee surged 19% to 334,000.
Investment and Wealth Management client assets
The direct wealth management client assets at BNY jumped 10% from the year-ago period to $339 billion, based largely on the appreciation of their value over the past 12 months, according to the firm.
Pershing revenue
The topline for Pershing climbed 11% year over year to $739 million, based on asset appreciation, client trading and other investments and rising net interest income.
The BNY segment that includes Pershing, the megabank’s Market and Wealth Services business, generated pretax income of $851 million on revenue of $1.74 billion for a margin of 49%. The profit soared by 21% from the same period in 2024, while revenue expanded by 13% and the margin increased by 3 percentage points.
Investment and Wealth Management profit
BNY’s asset and wealth management unit produced pretax profit of $148 million on revenue of $801 million for a margin of 19%. Compared to the same three months in 2024, the income slipped 1%, revenue dropped 2% and the margin grew by 1 percentage point.
In the BNY wealth management unit specifically, the higher asset values only partially offset some shifts in product choices and lower net interest income, according to the firm.
Remark
“Our role as a financial services platforms company at the heart of the world’s capital markets combined with our diversified business model positions us for a wide range of economic scenarios,” CEO Robin Vince said in a statement. “Our results in the first half of the year underscore BNY’s potential to create value for clients and shareholders, and we are entering the second half of the year with the momentum that comes from consistent execution and delivery.”
