Wells Fargo, Morgan Stanley Report Strong Q2 Wealth Gains
Wealth units at wirehouses and large public banks continued to beat estimates in the second quarter of 2026, Morgan Stanley said. Stock market IPOs (Like SpaceX) are charging net new wealth assets, and Wells Fargo said the bank has continued to hit the ground running by recruiting close advisers over the past year.
In the second quarter, Wells Fargo reported total income from its wealth and investment management division of $3.8 billion, up 13 percent year-over-year and slightly higher than the previous quarter.
Net interest income rose 17 percent based on “lower deposit rates, and higher deposit and loan balances,” while noninterest expenses rose 10 percent from advisor compensation relative to revenue. On the bank’s earnings call, Chief Financial Officer Mike Santomassimo said he expects the company to be able to manage a lower headcount than it currently has and is looking for ways to cut costs.
“There’s more opportunity to automate things more … and we think there’s a long way to go to make things more efficient in how we serve customers every day,” he said.
However, those staff cuts don’t appear to be coming from consultants, as Santomassimo noted that the wirehouse has had near-record hiring levels (in terms of revenue to the firm) over the past three quarters, which is considered a record-low.
He was proud of Wells’ success, even though he knew that Wirehouse had not changed the deal and had no plans to hire consultants and therefore might miss out on attracting some teams.
“The pipeline we’ve got is pretty good compared to what we’ve got for the rest of the year,” he said.
Morgan Stanley’s wealth division reported second-quarter net income of $8.9 billion (up from $7.9 billion a year ago), pretax income of $2.7 billion, and a pretax margin of 30.5%. Net interest income rose to $2.2 billion from $1.9 billion year-over-year, primarily due to the “combination effect of higher average deposits and loan growth,” according to Wirehouse’s earnings report.
The report highlighted $148 billion in net new assets, more than half of which were attributable. to enter from IPOs by certain customers in the Wirehouse 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 huge amount of money they made in the offering.
On an earnings call, Chief Financial Officer Sharon Yeshaya cited the IPO image as evidence to stick with the wirehouse, saying clients “can’t do that much less of a corporate relationship.”
Like their peers, banks Goldman Sachs and JPMorgan Chase both reported year-over-year net income gains. In the second quarter, Goldman Sachs’ revenue rose 20 percent year-over-year to about $4.6 billion, while total client assets in its portfolio reached roughly $2 trillion (with net interest income of $662 million in the full segment).
In the second quarter, JPMorgan’s net income stood at $6.9 billion, an increase of 19%. Like Morgan Stanley and Wells Fargo, the bank has seen its wealth costs grow, largely due to earnings-related compensation and the firm’s move to consolidate its private banking advisory teams. The firm’s AUM rose 18 percent to $5.1 trillion from last year, and total client assets rose to $7.7 trillion, driven largely by market performance.
