Wells Fargo’s Q1 asset rise doesn’t reflect market drop

Wells Fargo is reporting a rise in its client asset tally even as executives acknowledge that current market volatility has yet to take a bite out of the firm’s results.

Wells Fargo said in an earnings report Friday that it had $2.2 trillion in client assets in the first quarter. That was down by 3% from the end of 2024 but nonetheless up 2% year over year.

Like Morgan Stanley and other wealth management firms, Wells Fargo has seen its AUM tallies boosted over the past two years by bull runs in the stock market. But the S&P 500 and other indexes have crashed in recent weeks as investors struggled to come to terms with hefty tariffs the Trump administration plans to impose on various U.S. trading partners.

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In an earnings call on Friday, Wells executives expressed satisfaction with the Q1 results while cautioning that the numbers don’t reflect recent market gyrations.

“As a reminder, the majority of our advisory assets are priced at the beginning of the quarter, so second quarter results will reflect market valuations as of April 1, which were down from January 1, but up from a year ago,” Wells Fargo Chief Financial Officer Mike Santomassimo told analysts.

Wells saw market gains continue to bolster the bottom line for Wells Fargo’s wealth division in the first quarter. Its noninterest income rose by 6% year over year to just over $3 billion. Wells attributed the increase to “higher asset-based fees driven by an increase in market valuations.”

Of Wells Fargo’s $2.2 trillion in client assets, roughly $980 million was held in fee-generating advisory accounts. The rest, nearly $1.3 trillion, was in brokerage and deposit accounts.

Wells Fargo’s wealth division

All told, Wells’ wealth management division’s total revenue was up 4% year over year to nearly $3.9 billion in the first quarter. Its net income rose by 3% to $392 million.

Wells reported that its wealth division’s noninterest expenses rose by 4% to nearly $3.4 billion.

Although continued market deterioration could hinder Wells’ ability to generate fees, Santomassimo noted that it could also help lower costs. Many financial advisors have compensation that’s tied to how much money they generate for the firm through accounts they manage.

“If the market continues to decline from where it is today, you’ll see less revenue-related expense, particularly in Wealth and Investment Management,” Santomassimo said.

Wells Fargo CEO Charlie Scharf said much still depends on the timing and results of policy changes by the federal government.

“Though we have heard a great deal from our clients as they work through this transitionary environment, we have not seen an impact on their condition yet,” he said. “This is a complicated issue, and as our current expectation that we will face continued volatility and uncertainty and are prepared for a slower economic environment in 2025.”