In this article we discuss 5 best financial advisory firms to buy now. If you want to read about the wealth management industry’s future outlook and some of the hottest wealth management stocks, go directly to 10 Best Financial Advisory Firms To Buy Now.
5. Goldman Sachs Group Inc (NYSE: GS)
New York-based Goldman Sachs provides investment management, securities, asset management, prime brokerage and securities underwriting services. The company offers private wealth management services and advises investment options based on financial profile, lifestyle objectives and attitude toward risk. In the fourth quarter, Goldman’s revenue jumped 18% on a year-over-year basis to reach $11.74 billion. EPS in the period came in at $12.08, above the Wall Street estimate of $7.36 .
Ken Fisher’s Fisher Asset Management owns 2.48 million shares of Goldman, as of the end of the third quarter. The stake’s total worth is 652.86 million. A total of 70 hedge funds in Insider Monkey’s database are bullish on the company.
Read: Goldman Sachs (GS) Shares Down Despite Strong Quarterly Performance
4. Morgan Stanley (NYSE: MS)
Morgan Stanley is one of the 10 best financial advisory firms to buy now. The company offers wealth management services under Morgan Stanley Wealth Management. Fox Business recently reported that Morgan Stanley is getting a $100 million “slice” of Steven Cohen’s hedge fund Point72.
As of the end of the third quarter, 70 hedge funds of the 816 tracked by Insider Monkey held stakes in Morgan Stanley, up from 61 funds a quarter earlier.
Read: Is Morgan Stanley (MS) A Good Stock To Buy Now?
3. Bank of America Corp (NYSE: BAC)
Bank of America is one of the 10 best financial advisory firms to buy now. The bank offers investment, financial and wealth management advice under Merrill Private Wealth Management. The bank’s wealth management service offers personalized wealth management products and services, including brokerage and investment advisory services.
Bank of America saw signs of recovery in the fourth quarter of 2020, mainly because of increasing consumer spending, improving loan demand by commercial customers and strong investment activity.
A total of 88 hedge funds tracked by Insider Monkey held stakes in the company at the end of the third quarter.
Read: Do Hedge Funds Love Bank of America Corporation (BAC)?
2. Wells Fargo & Co (NYSE: WFC)
Wells Fargo offers financial advisory services under its Wells Fargo Advisors banner. The stock was recently upgraded by Credit Suisse to Outperform from Neutral. Credit Suisse analyst Susan Roth Katzke said in a report that Wells Fargo provided clarity about its path to recovery and strong returns. The analyst increased Wells Fargo price target to $40 from $30.
At the end of the third quarter, 90 elite hedge funds tracked by Insider Monkey reported owning stakes in Wells Fargo. The total value of these stakes is $8.47 billion.
Argosy Investors said the following about WFC stock in their Q4 2020 Investor Letter:
“Most of us are familiar with Wells Fargo (WFC); they are one of the top 5 banks in the U.S. with nearly $2 trillion in assets. The last 5 years have not been good to Wells. They are on their 3rd CEO during that time, and the current one stays in New York City despite headquarters being in San Francisco. Wells Fargo opened millions of fake accounts for customers over several years, driven by an incentive system that compensated branches based on their account openings. This goes to show you the perverse power of incentives, if not properly balanced. To atone for their sins, Wells Fargo is operating under an asset cap which prevents the bank from growing and must demonstrate stronger risk management. Not that long ago, Wells Fargo was the most admired large bank on Wall Street, with the highest valuation and glowing reviews about its low cost of funds driving sustainably high returns on equity. Now, it has the lowest valuation on Wall Street and no one talks about the good old days with Wells.
I believe that there is nothing fundamentally wrong with Wells Fargo’s business that cannot be fixed, and once they can return to normal operations without the fake account nonsense then I expect they will return to earning returns slightly lower than historical norms. If Wells Fargo uses 100% of its earnings to repurchase share over the next 3 years, Wells can retire 25% of its outstanding stock. By 2023, WFC could earn $6+ per share. At 10x earnings, a very low multiple given the rest of the stock market trades at 22x earnings, Wells Fargo could fetch $60 per share. WFC’s current share price is $33 and our cost basis is around $25 per share. If it takes 5 years for Wells to get out of the penalty box and trade at $60 per share, we can earn a 20% annual return on our investment, including dividends.”
Read: Is Wells Fargo (WFC) Stock a Buy For 2021?
1. JPMorgan Chase & Co. (NYSE: JPM)
With over $3.2 trillion worth of assets under management, JPMorgan is one of the largest investment banking companies in the world, providing wealth advisory, commercial banking, retail banking and underwriting services. JPMorgan operates its wealth management business under JPMorgan Wealth Management, which offers products and services for individual and corporate entities.
JPMorgan expects a spike in its 2021 noninterest expense because of non-technology investments, CCB volume growth and AWM distribution fees.
Overall, 118 hedge funds tracked by Insider Monkey had JPMorgan in their portfolios entering the fourth quarter.
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