Revenue generated by the Florida-based firm’s burgeoning brokerage force rose 12% last quarter, but rising legal and compensation costs contributed to an 8% decline in pretax profit at its wealth division.
Executives say key to growth is convincing wealthy customers to concentrate more of their assets at the firm, a core goal of firm’s 2019 compensation plan.
Firm has no plans to pull out of the Broker Protocol, a senior executive said after Merrill Lynch Wealth Management reported its highest third quarter of revenue since being bought by Bank of America.
Sales force across brokerage channels has dropped by over 1,000 since September 2016 when fake bank accounts were disclosed.
The company reported a 16% sequential decline due in part to costs associated with business development, including “significant” recruiting and retention costs, as well as litigation.
Higher fee based income and lower recruiting expenses helped boost profit despite client withdrawals.
As at Merrill Lynch, brokers increased loan sales to wealthy customers in the second quarter but attracted less new advisory account money than in earlier periods.