Net income for Bank of America's wealth management unit, which includes Merrill Lynch, fell almost 13% year-over-year to $614 million.
Wealth management revenue fell 3.5% to $4.4 billion, the bank reported on Tuesday.
Similarly, Merrill Lynch's quarterly revenue dropped 4% to $3.7 billion, the firm said. Revenue was also down 8% from the prior quarter "due to impacts of market on both fee-based and transactional revenue," a spokesman said.
Speaking to analysts, CFO Paul Donofrio said he hoped to see better results when market conditions improve.
"There has been a lot of market volatility and that affects asset management," Donofrio said.
CEO Brian Moynihan said that business has been challenged by declining transactional revenue, but he expressed confidence in the wealth management unit's leaders, John Thiel, head of Merrill Lynch, and Keith Banks of U.S. Trust.
"It's a good business and we expect more out of it and more out of John and Keith," Moynihan said.
Merrill's client balances increased by $43 billion from the previous quarter to reach almost $2 trillion. However, that figure was down $48 billion compared to the same period a year ago. The firm attributed that drop partially to lower market valuations.
For the wirehouse's Merrill Lynch One platform, which is replacing several older platforms, assets reached $500 billion and 1.3 million accounts at the year's end. Merrill launched the new platform in 2013.
Asset management fees for the quarter fell $1.6 billion, or 1.1% year-over-year. However, asset management fees for all of 2015 were up 6% year-over-year. The wirehouse also said that 55% of its advisors have 50% of more of their client assets under a fee-based relationship.
Merrill Lynch reported that its advisor ranks shrank by 30 to fall to 14,533. However, the wirehouse has been adding advisors in recent quarters, and a spokesman confirmed that Merrill remains committed to that strategy. Some rivals such as Wells Fargo have reportedly shrunk advisor forces in recent quarters.
Merrill also reported that more than 80% of its trainees are on teams, and more than half of trainees are in enrolled in the firm's Team Financial Advisor program.
Advisor attrition is at historic lows, the spokesman said. Recruiters have recently speculated that advisor moves may pick up as retention packages signed during and after the financial crisis expire.
Industry insiders will be watching the wirehouses closely to see how they cope with potential departures as well as the opportunity to hire away some of their competitors' biggest producers.
Merrill said that the firm's recruits bring approximately 80% of their assets from their prior firm to Merrill, while Merrill retains 40% to 50% of departing advisors' assets on average.
The wirehouse also says that "the remaining balances in the advisor retention packages have been declining to their lowest levels. In addition, there are long-term retentive elements built into our current compensation plans. As in the past, market dynamics can have an impact on advisor attrition more so than any single compensation plan impact."
Financial advisor productivity stood at $1.019 million per advisor for 2015, down from $1.065 million for 2014.
COMPANYWIDE PROFITS UP
Bank of America, the second-biggest U.S. lender, said profit rose 9.4% as fixed-income trading revenue climbed more than the company predicted as recently as last month and expenses shrank.
Fourth-quarter net income increased to $3.34 billion, or 28 cents a share, from $3.05 billion, or 25 cents, a year earlier, the Charlotte, N.C.-based company said. Excluding accounting adjustments, profit was 29 cents a share, beating the 27-cent average estimate of 27 analysts surveyed by Bloomberg.
CEO Brian T. Moynihan, 56, is trimming expenses as low interest rates and volatile markets stymie revenue growth. Since taking over in 2010, he’s dealt with charges tied to his predecessor’s acquisitions of Countrywide Financial and Merrill Lynch, which have contributed to more than $70 billion in costs since the financial crisis.
With reporting from Bloomberg.