Insurance and wealth advisory companies began reporting second quarter earnings this week. Here is a roundup from the companies with the most important wealth advisory and insurance segments.
Ameriprise Financial reported second-quarter net income of $415 million, an increase of 11 percent compared to the year-ago period, on revenue of $3.1 billion.
Net income came to $2.23 per share and earnings, adjusted for nonrecurring costs, were $2.33 per share, the company also reported Wednesday.
An average estimate for six analysts surveyed by Zacks Investment Research was for $2.27 per share.
The company, a major player in the advice and wealth management segment, maintains an important presence in the life and annuity business. However, company executives pointed to the robust performance of the advice and wealth management division for a strong second quarter.
“We posted new records for client assets and advisor productivity from strong client net inflows in fee-based investment advisory accounts, client acquisition and experienced advisor recruiting,” chairman
and CEO James Cracchiolo said in a news release.
In the quarter, 93 experienced advisors moved their practices to Ameriprise and the company ended the first half of the year with 9,721 advisors, the company also said.
In an earnings call Thursday, Cracchiolo called it one of the company’s best recruiting quarters and that the recruiting pipeline “also looks strong.”
At the end of the second quarter, client assets and flows increased to $453 billion as advisors drew $3.3 billion in net inflows, the company also said.
Raymond James Financial
Raymond James Financial reported third-quarter net income Wednesday of $133.2 million, an increase of 9 percent compared to the year-ago period, on revenue of $1.32 billion, which also jumped by 9 percent compared to a year ago.
The financial advisor and broker/dealer said it had net income of 91 cents per share diluted, meeting analysts’ expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for 91 cents per share.
“We continue to benefit from very robust financial advisor retention and recruiting results, which has helped us achieve quarter-end records for both client assets under administration and financial assets under management,” CEO Paul Reilly said in a news release.
The company earnings money primary from four business segments: the Private Client Group, capital markets, asset management and banking. The Private Client Group is the company’s most important revenue generator by far.
The number of Private Client Group financial advisors increased by 256 over last year’s quarter ended June 30, the company said. Raymond James Financial employs and army of 6,507 advisors.
“We still have fantastic retention, said Reilly in a conference call with analyst Thursday. Recruiting of new advisors and the company’s employed advisors have helped the company gather $475.4 billion in assets, an increase of 5 percent over the year-ago period.
Charles Schwab one of the largest registered investment advisors (RIAs) in the U.S. and an early adopter of automated investment platforms, reported second-quarter net income of $353 million, an increase of 9 percent compared to the year-ago period.
Second-quarter earnings of 25 cents per share diluted edged past analysts’ forecast of 24 cents a share due to $17 million in proceeds from a residential mortgage-based securities portfolio, the company also said.
Revenue hit $1.57 billion, an increase of 6 percent compared to the year-ago period, the company also reported. Analysts surveyed by Zacks Investment Research forecast revenue of $1.55 billion.
“Our contemporary full-service investing model continues to appeal to clients and prospects, and helped us achieve strong quarterly operating results in the face of sideways equity markets and continuing low interest rates,” CEO Walt Bettinger said in a news release.
Client assets under the management of independent registered investment advisors or enrolled in the company’s retail advisory solutions segment rose 6 percent to $1.26 trillion as the number of brokerage, banking and retirement plan participates rose, the company said.
Schwab Intelligent Portfolios, the company’s automated investment service for retail clients launched in March, reached $3 billion in assets and more than 39,000 accounts by the end of June, the company also reported.
Institutional Intelligent Portfolios, Schwab’s automated investment platform for advisors, was launched June 23.
Principal Financial Group
Principal Financial Group reported second-quarter net income Thursday of $241.1 million, a drop of 21 percent compared with the year-ago period.
The company delivered net income of 81 cents per share diluted, compared to $1.03 a share diluted in the year-ago quarter, as the company suffered $82.8 million in capital losses and unfavorable foreign exchange rates.
Second-quarter operating revenue rose 34 percent to $3.4 billion from higher sales and fee income, the company also said. Analysts had forecast revenue of $2.6 billion.
Operating earnings were flat at $323.9 million in the quarter, compared to $323.1 million in year-ago period, due to foreign exchange values, the company also reported.
After adjusting for foreign exchange rates and other items, operating earnings per share diluted were $1.09, the company said. A survey of nine analysts by Zacks Investment Research forecast operating earnings of $1.04 per share.
Principal Financial was benefiting from a diversified business model and strong distribution partnerships, which helped push cash flows up by 71 percent to $17.6 billion, and $540 billion in assets under management. This set a record, chairman and CEO Larry D. Zimpelman said in a news release.
The company suffered $70.2 million in losses on derivatives and “related activities used for hedging financial risks” due to strong annuity sales and rising interest rates, the company also said.
Wells Fargo, the consumer banking giant with a widespread retail brokerage and wealth management unit, reported second-quarter net income of $5.7 billion, flat from the year-ago period, on revenue of $21.3 billion.
Earnings per common share diluted were $1.03, in line with analysts’ estimates.
The banks’ wealth, brokerage and retirement unit reported net income of $602 million, an increase of 11 percent compared to the year-ago period.
Second-quarter revenue generated by the wealth, brokerage and retirement segment increased 5 percent to $3.7 billion from the year-ago period due to the growth in asset-based fees and net interest income, the company also said.
Wells Fargo Advisors is the nonbank affiliate of Wells Fargo & Co., which does business in retail banking, wholesale banking and brokerage and wealth management.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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