Client assets at Merrill Wealth Management reached a record $4.5 trillion in the first quarter of 2024, up 14% over the same time period last year, according to company earnings.
That was despite a slowdown in net new clients compared to the "outsized growth" in the first quarter of 2023.
The wirehouse's first quarter earnings, which showed Merrill Lynch Wealth Management and Merrill Lynch Private Wealth Management generated $5.6 billion in revenue, up 5% year over year, and net income of $1 billion, also marked the one-year point for Lindsay Hans and Eric Schimpf, presidents and co-heads of Merrill Wealth Management, leading the network.
Hans said the higher revenue and profit were driven by increased asset management fees from $25 billion in AUM flows and higher market valuations.
In 2023, Merrill had a record year of 40,000 net new clients, breaking 2019’s record of around 35,000. In the first quarter of 2024, the wealth businesses added 7,300 net new clients. Hans said this was in line with the previous two quarters but down year-over-year.
Schimpf said a year ago, interest rates were attractive to clients. He also pointed to the regional banking crisis, which he said benefited the wirehouse because of “clients coming to a stronger balance sheet and relationship with us.”
The firm recorded over 150,000 net new clients in the past five years, with over 600 locations across the country managing a record $3.3 trillion in client money.
In the first quarter, Merrill Lynch Wealth Management nearly doubled the new assets generated from inbound referrals from other parts of the company compared to a year ago. The Bank of America consumer bank serves around 69 million customers.
“Many of these have the wealth and complexity to be served by a Merrill financial advisor,” said Hans. “If we were to convert a third of those, we would double the business at Merrill.”
The firm crossed the 50% mark for Merrill Lynch Wealth Management clients with an existing Bank of America relationship. Adding in clients with a lending relationship bumps that up over 60%. Some markets have seen 70% penetration.
“We fully anticipate those ticking upwards,” said Schimpf.