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Wealth, brokerage, and retirement performed well for Wells Fargo

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Nov. 19 2019, Updated 5:05 p.m. ET

Wealth, brokerage, and retirement: Wells Fargo’s smallest business unit

Wells Fargo’s (WFC) wealth, brokerage, and retirement business unit includes retail brokerage, wealth management, and retirement solutions. It also includes ultra-high net worth wealth management, family offices, endowments, and foundations.

In terms of revenues and net income, the wealth, brokerage, and retirement segment is Wells Fargo’s smallest business segment.

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Wealth, brokerage, and retirement segment performed well

Wells Fargo’s wealth, brokerage, and retirement segment reported net income of $514 million in 4Q14. This was an increase of nearly 5% compared to 4Q13. This segment is driven mainly by noninterest income.

Noninterest income for this business vertical stood at $2,801 million, an increase of nearly 5% compared to 4Q13. The increase was driven by deferred compensation gains.

Noninterest expense also increased by nearly 6% compared to 4Q13. The increase was driven largely by an increase in expenses to enhance technology platforms.

The wealth, brokerage, and retirement segment also earns some net interest income. The net interest income comes mainly from securities bought on loans. Net interest income for this segment was $846 million for 4Q14, an increase of nearly 10% compared to 4Q13.

Some wealth management products showed good gains

The total number of managed retail brokerage accounts assets was $423 billion. This was an increase of 13% compared to 4Q13. The increase was driven by net inflows and good market performance. Wealth management client assets also increased by 5% compared to 4Q13.

IRA (individual retirement account) assets under management of the retirement planning product increased by 5% compared to 4Q13.

The main competitors in this segment are Bank of America (BAC), JPMorgan (JPM), and Citibank (C). All these banks are important components of the Financial Select Sector SPDR (XLF).

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