Wells Fargo saw net income in its wealth and investment management unit surge by 34% year over year to nearly $500 million in its first quarter after recruiting advisors with billions in client assets.
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Wells Fargo reported Tuesday that its net income from wealth and investment management hit $468 million in Q1, up from $349 million a year ago. Those profits were generated on $3.88 billion in revenue, a figure up 14% year over year.
The upward movement was “driven by growth in asset-based fees from increased market valuations as well as higher net interest income due to lower deposit pricing and growth in deposit and loan balances,” Chief Financial Officer Mike Santomassimo said in a call Tuesday with analysts.
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Of that revenue total, the vast majority — $2.5 billion — came from fees generated from managing client assets held in advisory accounts. Such fees are generally prized on Wall Street for their tendency to remain steady over time.
Wells Fargo’s wealth and investment management units ended the first quarter with $2.22 trillion in client assets, up 11% year over year. Of those assets, $1.12 trillion were held in advisory accounts, up 14% year over year.
“Company-wide net asset flows accelerated in the quarter, reaching their highest level in over 10 years,” CEO Charlie Scharf said on Tuesday’s earnings call.
In a presentation, Wells Fargo reported advisor teams with $9 billion in total client assets moved in the first quarter to its Wells Fargo Advisors Advisors Financial Network, or FiNet, which advisors join as independent contractors.
According to press releases, they included:
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Growth prospects with bank-based advisors
Besides FiNet, Wells Fargo has affiliation options for advisors who work as direct employees or out of the firm’s bank branches. Santomassimo told analysts Tuesday that the bank-based affiliation option is poised for growth.
“We’ve got roughly 2,500 advisers across the branch system already,” he said. “And that momentum is just really building.”
Wells Fargo no longer reports a headcount for its advisors. The last time it released a number, in January 2023, it stood at around 12,000 advisors.
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