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Wells Fargo’s Wealth, Brokerage, and Retirement Performs Well

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About the segment

Wells Fargo’s (WFC) Wealth, Brokerage, and Retirement segment provides a plethora of financial advisory services to high net worth clients. These services include financial planning, private banking, credit, investment management, and fiduciary services. The retirement services business is the largest in the country, providing institutional retirement and trust services for businesses and reinsurance services for insurance companies.

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3Q15 earnings review for Wealth, Brokerage, and Retirement

Wells Fargo’s Wealth, Brokerage, and Retirement segment reported 3Q15 revenues of $3.9 billion, an increase of 2% compared to last year. This rise was mainly attributed to growth in net interest income but was lowered by less gains on deferred compensation plan investments. Lower staff costs led to a 1% decline in non-interest expenses, which came in at $2.9 billion. As a result, segmental net income rose 10% to $606 million.

Operational metrics

The brokerage business suffered due to global weakness. Client assets were down 4% to $1.4 trillion. Assets under management were flat year-over-year at $409 billion. Strong loan growth of 26% was recorded in the non-conforming mortgage loans and security lending segments. Client assets managed by the wealth management segment were down 1% to $218 billion. Meanwhile, institutional retirement plan assets fell 2% to $330 billion.

Wells Fargo is among the top six banks in the United States and the largest mortgage lender. With a market capitalization of $224 billion as of October 15, it’s competing with Bank of America (BAC), Citigroup (C), J.P. Morgan (JPM), and Goldman Sachs (GS).

All these banks are heavily weighted in financial ETFs such as the Financial Select Sector SPDR ETF (XLF) and the Vanguard Financials ETF (VFH).

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