Wells Fargo saw strong growth in its brokerage business during 2013, as rising markets and higher asset flows upped revenue and profits at the wealth management unit. The division generated $3.4 billion in revenue for the fourth quarter, up from the $3.1 billion during the same period in 2012, while net income of $491 million was nine percent higher than the prior quarter and 40 percent higher than the same time frame last year. For the year, the unit netted $21.9 billion, up 16 percent from 2012, on revenue of $83.8 billion.
The wealth management trend was in contrast to the broader bank, which managed to squeeze out an increase in net profits even as revenue declined. Overall, Wells Fargo posted a 10 percent increase in net income to of $5.6 billion in the fourth quarter, slightly above analysts’ estimates, on revenue of $20.7 billion, which was lower than the $21.9 billion the bank reported in last year's quarter.
The brokerage advisory services, commissions and other fees again generated 22 percent of Wells Fargo’s non-interest income in the third quarter and 16.4 percent of the bank's overall revenue, each up slightly from last year.
The Wealth, Brokerage and Retirement division continues to be a focus for the company, said Chief Financial Officer Tim Sloan. Client assets grew to $1.4 trillion, up 12 percent. Specifically, wealth management client assets of $18 billion were up 7 percent from a year ago and 4 percent from the previous quarter.
The bank attributed the increase to a higher asset-based fees, as well as brokerage transaction revenue.
This increase in net income comes as non-interest expenses were up slightly (one percent over the third quarter) in part due to increased broker commissions.
Headcount within Wells Fargo Advisors’ remained flat again in the fourth quarter with 15,280 advisors.