Merrill and Morgan battle in ‘wealth manage’ war

It’s the battle of the bulges.

As Merrill Lynch and Morgan Stanley trade blows to dominate the lucrative multitrillion-dollar wealth-management industry, Merrill has cleared a new hurdle this month and was propelled into first place by several analysts.

“I think Merrill Lynch is a gem,” CLSA industry analyst Mike Mayo told The Post. “When I look at Merrill Lynch, I look at its nice and improving profits, which is a credit to the firm. And Merrill has a higher pretax margin — which we all monitor— than Morgan.”

It’s a war between Merrill and Morgan, says Alois Pirker of Aite Group. “Merrill clearly has a leg up right now,” he said.

In other battle statistics, Mayo has concluded that Merrill’s “thundering herd” of 14,000 financial advisers has the best-performing team in town.

But Morgan Stanley’s larger 16,000-plus army of advisers has been trying to play catch-up with its closest adversary, he admitted, and is closing the gap, especially on its services and banking products.

And two other ambitious dynamos — third-place Wells Fargo Advisors and No. 4 UBS Wealth Management Americas — are nipping at their heels.

For the two biggest, the most striking statistic is the huge haul of client assets they manage. Merrill and Morgan, reinventions after the 2008 financial crisis, now control sprawling empires of $2 trillion each. In jaw-dropping global terms, that’s equivalent to the 2.1 percent growth in the G20’s combined gross domestic product those wealthy nations recently agreed to deliver by 2018.

There’s no debate on another highly emotional blood number. Merrill is now No. 1 over Morgan Stanley in broker productivity. Merrill reported record third-quarter productivity of $1.1 million compared with Morgan Stanley’s average annualized revenue per representative of $932,000.

Deep in the trenches, Rebecca Rothstein, a Merrill Lynch financial adviser in Beverly Hills, Calif., is aware of the battle cry. Rothstein, who caters to entertainment industry clients and other wealthy investors, said her experience at Merrill has been extraordinary.

Rothstein is in the elite ranks, managing just under $4 billion. Her decision to bolt Morgan with an 11-person team in late 2012 is at the core of why some analysts say Morgan is still playing catch-up.

“When we moved from Morgan, it was really because we were missing the lending piece of the business,” Rothstein said. “Now Morgan has gotten better at it — but they are still not as good as Merrill.”

Morgan Stanley has its own sweet spot — aided by wealth management, third-quarter net income almost doubled — and it has poached prime talent from Merrill.

“As our CEO, James Gorman, has made clear on many occasions, we don’t particularly care how we stack up against Merrill Lynch, Wells Fargo or anyone else on random metrics,” Morgan Stanley spokesman James Wiggins said.

Wiggins, citing Cerulli Associates, added that the firm leads in fee-based managed accounts with a 19.8 percent market share, vs. 15 percent for Merrill Lynch, 10.6 percent for Wells and 8.6 percent for UBS.

Merrill spokeswoman Susan McCabe asserted, “Our financial results, by every measure, show that we are a leader in the industry and that we are headed in the right direction.”