Wells Fargo wealth profits fall on lower asset-based fees

Wells Fargo's wealth business fell short of its earnings a year ago in the second quarter, as lower market valuations weighed down its fee revenue. 

The Wall Street bank's Wealth and Investment Management division profits fell 19% year over year. The unit's revenue also fell 2% over the past 12 months while its noninterest expenses ticked up 2% in that same period. Rival megabank JPMorgan Chase, by contrast, boasted double-digit profit and revenue gains in its wealth businesses on Friday — partially helped by its May 1 purchase of former regional bank First Republic. 

Mike Santomassimo, the chief financial officer of Wells Fargo, said in an analyst call Friday that the wealth business is healthier than the numbers might suggest. 

"The majority of advisory assets are priced in the beginning of the quarter, so second quarter results reflected the market valuations as of April 1, which were down from a year ago," Santomassimo said, adding that client portfolios had grown since then due to the market rebound of the past few months. "Asset-based fees in the third quarter will reflect higher market valuations as of July 1," Santomassimo said. 

The megabank as a whole still beat expectations with adjusted earnings per share of $1.25, which was 8% more than the analyst consensus of $1.16, and raised its 2023 guidance for net interest income. 

Read more: Wells Fargo advisor headcount vanishes as interest rates buoy earnings 

To see the main takeaways from Wells Fargo's second-quarter earnings, scroll down the slideshow. For coverage of the firm's first-quarter earnings, click here. For a look at the results from the fourth quarter, click here. 

Note: Unless otherwise noted, all metrics below refer to Wells Fargo's Wealth and Investment Management segment, which is the home of Wells Fargo Advisors, Wells Fargo Advisors Financial Network, Wells Fargo's private bank and its custodian. The company doesn't break out metrics specific to those parts of its business. In a change since the first quarter of 2023, Wells no longer discloses advisor headcount.