Pershing reverses outflows to the tune of $41B in net new assets

BNY's Pershing just completed "a noisy year," but it can now expect "to win and grow our net new assets at mid-single digits" each quarter, Chief Financial Officer Dermot McDonogh said.

In remarks on an earnings call with analysts after BNY and its Pershing clearing and custody business disclosed their fourth-quarter results on Jan. 15, he and Robin Vince, the megabank's CEO, expressed confidence that Pershing's client base has turned the corner on outflows that primarily stemmed from the acquisition of First Republic by JPMorgan Chase. As evidence, McDonogh cited 36 wealth management technology platform clients, with five more under contract, and "incremental benefits" from Pershing's impending move to unified operating software across BNY, as well as a custodial agreement announced by the firm in December.

"All in all, we feel like we have kind of really, really big momentum on Pershing in the forward," McDonogh said. "Pershing continues to be a very, very strong business for us, and we continue to see it growing." 

To see the main takeaways for financial advisors from the fourth quarter of 2024 for Pershing and BNY's Investment and Wealth Management segment, scroll down the page. Follow these links to see analysis of the firm's earnings for the third, second and first quarters of last year. 

Sanctuary Wealth relationship

Last month, Indianapolis-based independent wealth management firm Sanctuary Wealth and Pershing unveiled their agreement for an expanded client relationship. As part of it, Pershing's Wove technology is powering the new Sanctuary One advisor desktop, bringing all of the software capabilities to one single digital location across more than 120 partner firms managing $48 billion in client assets.

"Having the right technology partner as Sanctuary continues to add scale through organic growth, strategic acquisitions and ongoing partnerships with elite wealth management firms is critical to creating exceptional advisor and client experiences," Sanctuary President Bob Walter said in a statement at the time of the announcement. "With its seamless integration of technology tools into a single, data-driven interface, Wove allows our partners to elevate their wealth management offering. We're excited to collaborate on the launch of Wove, to enhance our offerings and empower our partner firms to do more for their clients."

Pershing assets under custody or administration

Assets at wealth management client firms on Pershing's platforms surged 8% year-over-year to $2.7 trillion in 2024. While customer losses due to First Republic and other recruiting and M&A deals that altered custodial relationships led to an outflow of $6 billion in assets for the year, Pershing added $41 billion in net new assets in the fourth quarter. In contrast, the firm had outflows for each of the previous four quarters totaling $51 billion.

Investment and Wealth Management client assets

With a boost from stock gains in the fourth quarter, wealth management client assets in BNY's direct retail base rose 5% from the year-ago period to $327 billion. 

Pershing revenue

The higher asset values as well as elevated client transactions drove up Pershing's revenue in 2024, although lower net interest income tied to the Fed rate cuts this year offset some of the expansion. For the year, Pershing's revenue ticked up 3% from 2023 to $2.69 billion. In the quarter, revenue jumped 9% from the year-ago period to $705 million. 

The unit housing Pershing, BNY's Market and Wealth Services segment, generated pretax income of $2.89 billion in 2024 on revenue of $6.26 billion for a margin of 46%. The profit climbed 10%, revenue increased 7% and the margin was up by one percentage point. 

Investment and Wealth Management profit

More net interest income and bigger asset values led to additional revenue for BNY's direct wealth unit as well. Wealth management revenue escalated 5% for the year to $1.11 billion. The total Investment and Wealth Management unit earned pretax income of $605 million on revenue of $3.39 billion for a margin of 18% in 2024. Profit soared by 58%, while revenue was up 7% and margin was up by six percentage points.

Remark

Through Pershing and the retail wealth unit, BNY is "a leader in serving one of the fastest growing segments in financial services, the U.S. wealth market," Vince had said in his prepared remarks.

"Within that market, our wealth business is focused on the faster growing ultrahigh net worth space," Vince said. "Our Pershing business, on the other hand, leverages the size and scale of our platforms to power advisors' businesses, helping them navigate an increasingly complex operating environment using the power of technology."