Wells Fargo, Morgan Stanley Report Strong Q2 Wealth Gains
Wealth units at wirehouses and larger public banks continued to beat estimates in the second quarter of 2026, with Morgan Stanley touting that stock market IPOs (like SpaceX) are turbocharging net new wealth assets, while Wells Fargo claims the bank has continued to hit near-record advisor recruiting in the past year.
In the second quarter, Wells Fargo reported $3.8 billion in total revenue from its wealth and investment management division, up 13% year-over-year and slightly higher than the prior quarter.
Net interest income climbed by 17% based on “lower deposit pricing, and higher deposit and loan balances,” while noninterest expenses rose 10% on higher revenue-related advisor compensation. In the bank’s earnings call, Chief Financial Officer Mike Santomassimo said the company expects it “should be able to run this company with less headcount” than it currently has, and that it will continue looking for ways to cut expenses.
“There’s more opportunity to make things more automated … and to make things more efficient in terms of how we serve clients every day, and we think there’s a long way to go,” he said.
However, it doesn’t seem like those personnel reductions are coming from advisors, as Santomassimo said the wirehouse had close to a record level of recruiting (in terms of revenue brought into the firm) over the last three quarters, with purportedly record-low attrition.
He boasted about Wells’ success despite acknowledging that the wirehouse hadn’t changed its deal to recruit advisors and doesn’t plan to, and therefore potentially misses out on attracting some teams.
“The pipeline we’ve got is quite good in terms of what we’ve got over the rest of the year,” he said.
At Morgan Stanley, the wealth division reported second quarter net revenue of $8.9 billion (up from $7.9 billion year-over-year), pre-tax income of $2.7 billion, and a pre-tax margin of 30.5%. Net interest income jumped from $1.9 billion to $2.2 billion year-over-year, mainly due to “higher average sweep deposits and the cumulative impact of lending growth,” according to the wirehouse’s earnings report.
The report highlighted net new assets of $148 billion, over half of which were attributable to inflows from IPOs by certain clients in the wirehouse’s Workplace channel. Morgan Stanley was one of the two lead banks in SpaceX’s IPO earlier this year, and the company’s founders and employees (and others) are looking for ways to invest the vast sums of money they made in the offering.
In an earnings call, Chief Financial Officer Sharon Yeshaya touted the IPO figure as evidence for sticking with the wirehouse, saying clients are “not going to be able to have that corporate relationship at a much smaller level.”
Like their peers, banks Goldman Sachs and JPMorgan Chase both reported higher year-over-year net revenue. Goldman Sachs revenue in the second quarter was up 20% year-over-year, at about $4.6 billion, while total client assets in wealth stood at approximately $2 trillion (with net interest income in the full division of $662 million).
JPMorgan’s net revenue in the second quarter sat at $6.9 billion, up 19%. Like Morgan Stanley and Wells Fargo, the bank also saw its wealth expenses grow, largely due to revenue-related compensation and the firm’s moves to bulk up its private banking advisor teams. The firm’s AUM was up 18% from last year to $5.1 trillion, with total client assets rising to $7.7 trillion, largely driven by market performance.
