(Adds decline of brokerage revenue)
By Elizabeth Dilts
NEW YORK, April 18 Bank of America's
wealth business reported revenue climbed 3 percent to $4.6
billion in the first quarter this year from last year on higher
client assets under management and fees, Bank of America Chief
Financial Officer Paul Donofrio said Tuesday.
The results come amid the backdrop of the bank's decision to
break from its wealth management peers and wind down its
commissions-based retirement business and the departure of 145
financial advisers from Merrill Lynch's "thundering herd."
The firm committed to ending its IRA accounts last year in
preparation for the U.S. Labor Department's fiduciary rule that
takes effect on June 9 and requires firms to eliminate potential
conflicts of interest for advisers managing client's retirement
"These solid results were produced in a period of change for
the industry as firms and clients anticipate new fiduciary
standards and other market dynamics such as the shift between
active and passive investing," Donofrio said on a call with
The bank's Global Wealth and Investment Management division,
which includes Merrill Lynch and U.S. Trust, reported long-term
assets under managed rose to $29.2 billion in the three months
ended March 31 from $18.9 billion in the fourth quarter last
The unit's pretax profit margin, a key metric that can show
growth across business segments, rose to 27 percent from 26
percent a year earlier.
Overall, the second-largest U.S. bank's total revenue rose
about 7 percent to $22.45 billion, beating the estimate of
Last month, Merrill Lynch partly walked back its statement
that it would completely end commissions-paying retirement
accounts after the fiduciary rule was delayed by 60 days from
the original implementation date of April 10.
Nonetheless, the portion of advisers with more than half of
their clients enrolled in fee-based accounts, which pay an
adviser a flat-fee rather than a commission, continued to rise
this quarter, up 2 percent to 66 percent of advisers compared to
the prior quarter.
Brokerage and other non interest income fell $83 million
over last year as the firm moves away from commissions-paying
Donofrio acknowledged that transactional revenue continued
to decline, but said it was offset by higher assets under
management and fees.
Merrill Lynch revenue rose 5 percent to $3.78 billion from
the prior quarter on higher asset management fees and net
interest income. The firm's total number of advisers fell to
14,484 from 14,629 in the fourth quarter last year.
(Reporting By Elizabeth Dilts; Editing by Bernard Orr)