Keeping Their Eyes on Their Prize; Takeaways from CEO & CFO Meetings

研报英文原文证据摘录

Keeping Their Eyes on Their Prize; Takeaways from CEO & CFO Meetings

s. That said, the team acknowledged that the recruiting environment is very competitive and Source for consensus: FactSet

that CMA departures will likely continue ahead, with the benefit of HBAN not coming until 4Q:26.

Not enough attention on A&WM's earnings mix... What does not get much attention, which was

a focus of management in our meetings, is A&WM's earnings mix between core (i.e., advisory and

brokerage) and cash (i.e., spread-related). We estimate A&WM's cash activities have generated

~40% of its earnings over the past 6 years and 48% in 2025. In contrast, we estimate some of its

WM peers had 2025 contributions from cash activities that represented the vast majority of their

earnings. This difference doesn't appear to be reflected in the respective P/Es.

...or on A&WM's profitability / margins: Management also argued that A&WM has higher

profitability and competitive margins relative to peers. Over the past 5 years, we estimate A&WM's

average ratio of pre-tax income / client assets has been 30 bps compared to a peer average of ~12

bps. We acknowledge that companies focus on different bottom-line metrics (e.g., PTI or EBITDA),

and we note that our analysis is based on PTI. Moreover, AMP's A&WM pre-tax margin is above the

average of its peers, despite its notably smaller level of total client assets (i.e., less scale).

Bottom line: A&WM's organic growth has been below 2% in 3 of the last 4 quarters. If the driver

(away from CMA, which is temporary) is AMP's decision to not chase peers' aggressive recruiting

packages and to prioritize economics, we think it is taking the right approach. We stay Buy-rated.

FY (Dec) 2025A 2026E 2027E 2028E Suneet Kamath, CFA * | Equity Analyst