Wells Fargo's wealth and investment management unit posted a solid year-end performance even as the number of advisors continued to fall, according to the bank's financial results released Friday.
The unit generated $4.3 billion in fourth-quarter revenue, up 5.7% year-over-over and up 1.4% from the prior quarter. Profits, meanwhile, ticked up a modest 1% to $659 million from $653 million in the fourth quarter of 2016.
The year-over-year revenue increase was primarily driven by higher asset-based fees, higher net interest income and higher gains on deferred compensation plan investments, the bank explained in the earnings release.
The unit also posted strong gains in total client assets, jumping to a record $1.9 trillion, up a robust 11% from 2016. The increase was driven by higher market valuations, the bank said.
The unit's advisor force, however, continued to shrink, dropping 2% to 14,544 from 14,882 at the end of 2016. Since the sales practice scandal broke in September 2016, the business has lost 542 advisors.
The worst of the advisor exodus is likely over, though, according to Rick Rummage, president of the Rummage Group, a career consulting firm.
Rummage noted there was a six-month period during which a higher percentage of advisors were unwilling to talk to Wells Fargo but that has largely subsided. For many advisors, "it's water under the bridge," he said, adding that the bank's changes to its sales practices and management overhaul helped to appease their concerns.
Overall, Wells Fargo earned $6.2 billion, or $1.16 per share, in the fourth quarter, compared with earnings of $5.3 billion, or 96 cents per share, in the same quarter of 2016. For the full year, the bank earned $22.2 billion, or $4.10 per share.
"Over the past year we have made fundamental changes to transform Wells Fargo as part of our effort to rebuild trust and build a better bank," Wells Fargo CEO Tim Sloan said.