Everybody’s a winner.

Earnings season for Wall Street’s biggest names kicked off in earnest last week and got off to a good start as JPMorgan Chase, Wells Fargo, BlackRock, and BNY all beat analysts’ expectations. The data also assuaged some of Wall Street’s concerns that the recent Fed rate cut would take a major chunk out of company profits.

Citigroup and Goldman Sachs have big shoes to fill when they report today.

On the Wire

While the news was good on Wall Street, some of the world’s largest brokerages didn’t exactly ace their earnings reports. JPMorgan reached overall profits of $12.9 billion, down 2% year-over-year and a nearly 30% drop from last quarter. While profit declines are never ideal, CFO Jeremy Barnum told reporters that results were in line with the company’s guidance. 

“These earnings are consistent with the soft-landing narrative,” he said. The success JPMorgan did have was bolstered by higher fees in its investment banking business, which surged 31% year-over-year.

Rival Wells Fargo saw profits in its wealth and investment management arm rise more than 9% from last quarter to $529 million, but they were still flat year-over-year. An ongoing SEC investigation regarding underpayment of interest rates on cash-sweep deposits tied to advisory accounts forced the bank to raise interest rates last quarter, costing it $128 million.

Book of Records. Meanwhile, BlackRock achieved record inflows of $221 billion last quarter, with assets under management reaching approximately $11.5 trillion, marking a new high for the third consecutive year. Looking ahead, the asset manager has its eyes set on private markets, and recently acquired industry data provider Preqin for $3.2 billion. 

“Our strategy is ambitious, and our strategy is working,” BlackRock CEO Larry Fink said in a release.

Higher investment services fees boosted BNY’s profits, and it became the first bank in history to have assets under its custody and administration exceed $50 trillion. For reference, that value is greater than the GDP of any country in the world.

Apparently, the “lead burrito scarfer” position has been shelved. 

The CFP Board is facing widespread criticism after launching an advertising campaign that its own members have called out for portraying the profession as underworked and overpaid. The spots juxtaposed made-up jobs — like “professional daydreamer” or “celebrity hand holder” — with the certified financial planning role. They have been broadly lampooned by the very CFPs who funded them with membership fees.

Sure, the ads didn’t hit home with some advisors, but that might have been the point. The objective was to “catch the attention” of college students and college-bound high schoolers, not grab a laugh from professional planners.

“I understand the reaction,” CFP Board Chair Matthew Boersen told The Daily Upside. “I had to remind myself that I am not the target audience — high school and college students are.”

Don’t Poke the Nerd

The still-image versions of the advertisements took the brunt of the backlash for also pointing out that the average CFP brings home $192,000 a year. It’s more than triple the national average, according to research, and would make for a handsomely overpaid “bubble bath sommelier.” Well-known industry blogger and prominent CFP Michael Kitces also expressed his disapproval on LinkedIn, adding that CFPs pay $455 annually in fees and about a third of that is spent on public awareness. 

Glenn Downing, a CFP and an advisor with CameronDowning, called the ads “absolutely appalling.” “It is truly disrespectful to current certificants who’ve worked their asses off to get where they are today.”

The ads are slated to run digitally through the end of the year across various online platforms, like Spotify, Meta, TikTok, LinkedIn, Twitch, and Snapchat. In one ad, a suave bubble-bath aficionado soaks up some suds while a voiceover says: “Financial planning — quite possibly the perfect job.”

“The connection was definitely not clear,” said Stephen Taylor, a CFP and an advisor with Merited Wealth. “Then it becomes up for interpretation.”

It’s Good to Be a CFP. Like much of wealth management, the CFP Board has long tried to diversify its membership and reach out to younger generations. The planning industry could be an appealing landing spot. The latest CFP Board compensation survey found career satisfaction was through the roof, with 85% of professionals experiencing a high sense of personal fulfillment.

For Taylor, the industry could use more lighthearted advertising that might help change the job’s traditionally stuffy image. “Any effort to get young people to stop scrolling is a positive,” he said.

Everybody wanted things to go back to normal during COVID … except Wall Street.

Compensation in New York City’s securities industry soared during the pandemic thanks in large part to federal stimulus and near-zero interest rates. Fast forward to 2023, and salaries fell for the second year running to $471,370, according to a recent state comptroller report.

It marks quite a drop from the $515,600 that securities employees made on average during the height of the pandemic in 2021. The world may have been shutting down, but hey, at least take-home pay was through the roof.

“After record years during the pandemic, Wall Street’s profits were more in line with pre-pandemic levels in 2022 and 2023,” said New York State Comptroller Thomas DiNapoli in a release. “This year has been very strong so far and profits may continue their upward trajectory.”

Buy the Dip

The drop in pay is likely linked to profits. Securities firms in the state took in $26.3 billion in profits last year, which were “levels more typical prior to the pandemic,” according to the report. Again, that’s a major decline from the $58.4 billion in profits Wall Street brought in in 2021 thanks to government stimulus and low interest rates. Dwindling profits also meant smaller bonuses for employees, which topped out at an average of $176,500. 

There may be good news on the horizon:

• In the first half of 2024, New York Stock Exchange member firm profits grew to $23.2 billion, a nearly 80% jump year-over-year, the report said. 
• They’re estimated to reach $47 billion by the end of year, which means some may be getting bigger bonuses, too.

Back to Normal. Don’t feel too bad for brokers. Despite the wage decline, 2023 was still the third-highest year on record for salaries in New York’s securities industry. And though the growth rate was slower compared to states like Texas and Utah, New York listed the most securities industry jobs last year, at 214,900. 

Plus, we can all rest easy knowing CEOs at New York-based financial firms made 234 times more than the median for all their employees.