Merrill Lynch’s retail brokerage arm turned in another strong quarter, as fee-based revenue continued to climb to record levels. Merrill Lynch Global Private Client saw its revenues increase by 13 percent to $3.3 billion from $2.9 billion in the year-ago quarter. The pretax profit margin for the entire Global Wealth Management division was 27.9 percent, up from 23.7 percent in the prior-year period, driven by the impact of the investment in BlackRock and prudent expense controls.
Merrill also continued to manage attrition among its financial advisors. Advisor headcount rose to 16,200 at the end of June, reflecting an increase of 270 financial advisors for the quarter. And turnover among financial advisors remained near historical lows, particularly among top-producing financial advisors. “We had net positive recruiting against all our major competitors,” said Jeff Edwards, Merrill’s chief financial officer, on the conference call. “And we had the lowest turnover between our top two quintiles of financial advisors on record.”
Merrill’s strong quarter was driven by strength in its fee-based accounts. Client assets in products that generate annuitized revenues now stand at $668 billion, up 19 percent from the second quarter of 2006, and total client assets in GWM accounts were a record $1.7 trillion, up 14 percent. Net inflows of client assets into annuitized-revenue products were $12 billion for the second quarter, and total net new money was $9 billion.