Slideshow How Ameriprise, Raymond James and Stifel stack up: Who fared best?

Published
  • August 16 2016, 2:28pm EDT

A challenging time for some of the largest wealth management firms

The wealth management business experienced serious headwinds over the last quarter, with profits and revenues on the decline for most of the fastest-growing firms in the industry. Stifel proved to be the exception, with its wealth management unit posting double-digit growth on both line items.

Ameriprise and Raymond James, on the other hand, were underperformers.

Click through our slideshow to see how all three were left standing in the second quarter.

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How Ameriprise, Raymond James and Stifel stack up Q1

A huge jump for one brokerage

Stifel led the pack in revenue growth for the second consecutive quarter this year. The firm attributes this to a rise in asset management and service fees — an increase in commission revenues, net interest income and higher principal transactions revenues. This, however, was offset by a decline in investment banking revenues and other income.

Raymond James ended the quarter with just a bump in revenue growth, attributable to account and service fee income. The slight increase was driven by fees associated with the firm's multi-bank cash sweep program — a result of an increase in short-term interest rates and an expansion in client cash balances — relating to clients' reactions to market volatility and uncertainty.

Ameriprise revenues dropped in year-over-year growth because of lower client activities and a decline in average market equity for their performance, the firm says.

Read more: Fiduciary rule forced Stifel's hand to sell IBD, CEO says

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Wrestling with costs

Ameriprise costs declined due in part to a lower distribution expense, reflected by lower transactional activities. The firm will "continue to manage expenses while allocating resources to prepare for the Department of Labor's fiduciary rule and maintaining targeted growth investments," according to the firm's most recent earnings report.

While Stifel revenues were up, so were its expenses. The firm blamed a double-digit surge in costs on increases in compensation and benefits and business expenditures. Expenses for commissions and floor brokerages, however, shrunk by 3%.

Operational costs were up for Raymond James, due to a hike in legal and regulatory expenses, the firm says.

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Ameriprise wealth unit has no-growth quarter

On the rebound

Stifel reported double-digit growth in profits. The firm credits it to an increase in service fees from a surge in assets under management in fee-based accounts.

Raymond James reported a drop in profits due to rise in costs. Securities commissions and fee revenues declined slightly, but fees from fee-based accounts increased. This was partially offset by declines in commissions on mutual funds, equity securities and new issue sales credits.

Read more: As regulatory scrutiny increases, Raymond James steps up compliance

Total headcount grows for most

Stifel's adviser ranks declined by less than a dozen advisers. The firm’s reported headcount for the second quarter did not reflect the sale of Sterne Agee’s IBD, which Stifel had acquired in 2015.

Raymond James's aggressive recruiting paid off with the most advisers among all three firms. As a result, client net inflows increased and assets under management jumped 6% year-over-year.

Ameriprise also saw an increase in total headcount.

Read more: Stifel sells Sterne Agee IBD a year after buying it

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Two brokerages are hiring

Stifel increased its employee adviser headcount by 10.

Ameriprise's total headcount increased despite fewer employees coming into the firm.

Two firms pave the road to independence

Stifel reported a decline in its total number of independent advisers this past quarter.

After the end of the second quarter, that number got smaller as the St. Louis-based firm sold the IBD it had acquired via its purchase of Sterne Agee. Over 500 independent advisers left with the unit.

Read more: How Ameriprise, Raymond James and Stifel stack up Q1