Best & Worst Broker-Dealers: Q3 Earnings, 2023

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The third-quarter earnings season for the broker-dealer community included a big loss for one wirehouse firm, which is digesting a former competitor. Four BDs saw their earnings decline from the year-ago period, but six reported stronger results. 

“Currently, U.S. consumers and businesses generally remain healthy, although consumers are spending down their excess cash buffers,” explained JPMorgan Chase CEO Jamie Dimon in a statement when the firm announced its latest results. “Furthermore, the war in Ukraine compounded by [the Oct. 7] attacks on Israel may have far-reaching impacts on energy and food markets, global trade, and geopolitical relationships.”

The CEO added: “This may be the most dangerous time the world has seen in decades. While we hope for the best, we prepare … for a broad range of outcomes so we can consistently deliver for clients no matter the environment.” 

The markets continue to anticipate a pause in the Federal Reserve’s recent policy of raising interest rates. The S&P 500 has improved over 20% this year, but financial stocks are not keeping up. The Financial Sector SPDR, for instance, is up only 4.7%, while the iShares U.S. Financials ETF has improved 6.9% year to date.

Still, leaders in the sector remain bullish. For instance, LPL Financial CEO Dan Arnold said during an earnings call that the firm now has “13 solutions in our overall services portfolio, [and] … we’ve got three more solutions that we will roll out in the near to intermediate term and another handful in incubation.” 

These business services “continue to be a place of innovation for us, and we think there’s still a good bit of opportunity to continue to help [us] build leverage points for advisors in the spirit of helping them run thriving businesses,” Arnold said.

On Jan. 12, JPMorgan, Wells Fargo and Citigroup will kick off the Q4 2023 earnings season. 

Credit: Chris Nicholls/ALM          

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