By Kenneth Corbin

Bank of America's wealth management business posted increases in revenue, assets under management (AUM), and the number of ultrawealthy clients its advisors serve in the second quarter, while profitability ticked down slightly.

At Merrill Wealth Management, the full-service advisory business, client balances, including investments, deposits, and loans, were up 10% from a year ago at $3.7 trillion. The number of clients with $10 million or more in assets was up 13% from the second quarter in 2024.

BofA's Global Wealth and Investment Management division, which includes the company's private bank for very wealthy clients, reported total revenue of more than $5.9 billion for the quarter, up 7% from a year earlier. That increase was primarily the result of higher AUM fees driven by rising market valuations and the inflow of new assets to the firm.

The division reported net income of just under $1 billion in the second quarter, down marginally from the first quarter of 2025 and the year-earlier period.

On a conference call with reporters, Merrill executives said they were pleased with how the firm and its advisors handled the April market volatility that followed the White House tariff announcement. Merrill Lynch strategists continue to believe that a recession is unlikely, and the firm was a net buyer of equities in the period, a time when many others were selling.

Still, the market upheaval did have an impact on net new asset flows, which were $14.3 billion for the second quarter, a 40% drop from the first quarter's $24 billion, but up from $10.8 billion in the fourth quarter of 2024.

"There was volatility in the market," said Lindsay Hans, president and co-head of Merrill Wealth Management. "In periods such as that, you're going to see some clients wait, especially when it comes to deploying new money. While we didn't see clients liquidating and moving off, we did see clients wait a little bit longer [to add money to their accounts]."

Hans also noted that the interest rate environment has made cash investments more attractive, so more clients have been holding money in Treasury bills and money-market accounts that don't show up in Merrill's AUM count. Then there is also the seasonality of tax payments coming due in the second quarter that affect balances in investment accounts, she said.

The new client accounts that Merrill opened during the second quarter primarily belong to investors with significant investible assets. Seventy-eight percent of the new clients Merrill signed up in the second quarter are investing at least $500,000 with the firm. In the second quarter of 2024, clients with $500,000 or more comprised 71% of new account openings.

Overall, Bank of America reported a solid quarter, topping Wall Street's forecast for earnings per share but falling short of the expectation for overall revenue. The stock was down about 1.5% to around $45 per share in midday trading Wednesday.

Eric Schimpf, the other president and co-head of Merrill, said his division's advisor teams continue to tap into other parts of Bank of America to engage with clients beyond wealth management.

"Advisor teams broadened their relationships with existing clients, including lending and banking activity," Schimpf said. "For the 10th consecutive quarter, the number of Merrill clients with a Bank of America checking or savings account grew, and today over 62% of Merrill clients have a banking and lending relationship with Bank of America."

Like other large brokerage houses, Merrill Lynch no longer discloses how many advisors it employs, though Schimpf said the firm's recruiting efforts are strong and the attrition rate of older advisors leaving is "well below" its historical average.

CIO's view. Chris Hyzy, the chief investment officer for Merrill Lynch and Bank of America Private Bank, sees several trends taking shape that could buoy stocks in the next year. Those include deregulatory efforts that could invite more mergers and acquisitions, a coming capital expenditure boom that could lift multiple industries, and significant advances in industries such as robotics and cybersecurity. Taken together, he said those trends and others should improve corporate profit margins and efficiency, brightening prospects for market performance next year.

"We expect [economic] growth to pick up in 2026 after a short soft patch here in the fall, and financial conditions to become easier in the medium term," Hyzy said. "Therefore, we continue to remain bullish overall."

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

July 16, 2025 13:52 ET (17:52 GMT)

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