Merrill Lynch and Bank of America's Private Bank posted flat earnings for the first quarter of 2025, even as their parent company reported a strong overall performance.
The wealth management division generated $1 billion in net income, essentially unchanged from the same period last year and only marginally lower—down 0.1%—from the fourth quarter of 2024.
Total revenue for the wealth business reached $6.02 billion, an increase of nearly 8% year-over-year, driven by both growth in assets under management and a higher client count. However, noninterest expenses rose at a faster pace—up 9% from a year ago to nearly $4.7 billion—pressuring margins and offsetting some of the top-line gains.
Across its full operations, Bank of America reported $7.4 billion in net income for the quarter, an 11% increase from the prior year. Earnings per share came in at 90 cents, surpassing Wall Street estimates of 82 cents and reflecting strength in other business segments that helped support overall profitability.
Within wealth management, the firm saw broad-based momentum. Asset inflows across Merrill Lynch, the Private Bank, and the consumer channel totaled $26 billion in the first quarter alone, contributing to $85 billion in net new assets over the trailing twelve months. Fee-based revenue remained strong, with Merrill and the Private Bank generating $3.7 billion in asset management fees during the quarter, up 15% from the year-ago period.
Bank of America also added approximately 7,200 new wealth clients in the quarter, including around 4,200 households at Merrill with investable assets of $500,000 or more. While the firm no longer discloses the number of financial advisors at Merrill Lynch, overall headcount across the enterprise stood at 212,732, down slightly from year-end 2024 but above staffing levels reported a year earlier.
The firm’s wealth strategy continues to emphasize scale, digital engagement, and expanded product offerings. One key area of focus is alternative investments, which Bank of America says are gaining traction with both clients and advisors. The number of client households with alternative allocations has doubled since 2018, while the number of advisors engaging with these strategies has risen 13% over the past year. Though Bank of America did not provide figures for total assets in alternatives, the data points suggest a sustained shift in portfolio construction behavior within the platform.
Client lending is another pillar of growth. Lending balances across Merrill and the Private Bank rose 13% year-over-year, reflecting client appetite for customized borrowing solutions. These efforts align with a broader push to integrate banking and investment capabilities across the client relationship.
The firm is also leaning into digital transformation to enhance client engagement and advisor productivity. Bank of America reports growing use of its digital channels for scheduling appointments and opening accounts, while client interactions with its digital assistant Erica continue to climb. Advisors are increasingly supported by AI-driven insights—actionable prompts that identify opportunities based on changes in a client’s financial situation. The firm delivered 3.5 million such insights in the first quarter, a 73% increase over the previous quarter.
These technology enhancements are designed to help advisors deliver more proactive and personalized service at scale. Use cases for the AI engine include alerting advisors to events like mortgage refinancing opportunities or impending eligibility for Social Security, enabling them to initiate timely conversations and deliver more comprehensive guidance.
Bank of America leadership notes that these initiatives reflect a long-term strategy to position the firm as a holistic wealth management partner. By integrating advisory, banking, and digital capabilities within a single ecosystem, the firm aims to deepen client relationships, expand wallet share, and improve retention—particularly among high-net-worth and affluent households.
While the flat earnings may initially appear underwhelming, the underlying indicators—rising revenue, client growth, asset inflows, and fee expansion—suggest a fundamentally healthy wealth business, albeit one facing higher operating costs. The rise in noninterest expenses appears linked to strategic investments in technology, talent, and infrastructure, as the firm continues scaling its wealth operations across multiple segments.
For advisors and independent firms observing Bank of America’s trajectory, the report offers insights into how the largest players are navigating an evolving landscape. Client demand for integrated, digitally enabled services continues to grow. So too does interest in alternative investments and personalized lending solutions, particularly as volatility and tax considerations shape portfolio construction.
RIAs may want to take note of how Bank of America is combining automation with human advice. The significant growth in AI-generated client insights underscores a trend toward augmenting, rather than replacing, advisor expertise. As the technology stack becomes more sophisticated, advisors across the industry will need to embrace data analytics and automation—not to eliminate the advisor-client relationship, but to enhance it.
Likewise, the firm’s emphasis on cross-selling—from investment services to credit and lending—illustrates a broader industry trend of holistic relationship management. For RIAs without in-house lending or banking capabilities, this trend may prompt renewed consideration of partnerships or platform enhancements that can fill those gaps.
Merrill’s success in attracting more high-net-worth households also reinforces the continued importance of segmentation. The fact that 4,200 of the new clients brought at least $500,000 in assets indicates that the firm’s prospecting efforts are squarely focused on the core affluent and mass-affluent markets. Advisory firms with similar targets will likely face increasing competition—not just from wirehouses, but also from digitally native platforms offering curated, low-friction wealth solutions.
Overall, the first-quarter results suggest that Bank of America’s wealth division is operating from a position of strength, even as margin pressures persist. Advisors within the ecosystem benefit from significant resource investment, technology upgrades, and expanded product access. Those outside the platform, meanwhile, may see the report as a barometer of where client expectations—and competitor capabilities—are headed.
While the firm did not break out advisor compensation or retention metrics, it is clear that its long-term strategy hinges on expanding client relationships rather than chasing headcount. The lack of advisor disclosure, while frustrating for some observers, may reflect a strategic shift in how the firm defines success—not by the number of advisors, but by the quality of outcomes they deliver at scale.
Looking ahead, Bank of America is likely to continue refining its wealth management model, with an eye toward greater efficiency, deeper engagement, and scalable personalization. The competitive landscape for affluent investors remains dynamic, and firms that can align digital infrastructure with high-touch advice will be best positioned to gain share in a rapidly evolving market.
For RIAs and wealth managers, the message is clear: client experience, product breadth, and advisory efficiency are no longer differentiators—they are table stakes. The firms that win in this environment will be those that embrace complexity without compromising simplicity, leveraging technology not just to streamline workflows, but to deepen relationships and deliver outcomes that clients truly value.
