Well Fargo Offers 100% Production Bonuses to Assuage ‘International’ Advisors–Sources
Wells Fargo Advisors is making a dollars-and-cents effort to retain certain advisors tempted to move because of its decision to prohibit them from working with clients outside the U.S.
Brokers who derive more than 40% of their revenue internationally are not eligible for the offer and will have to leave the bank, the sources said. Wells will accelerate those brokers’ deferred compensation vesting schedules, forgive promissory note balances on their forgivable loans and delay distributing their accounts to other brokers for 30 days after their departure, they said.
Wells Fargo spokeswoman Shea Leordeanu declined to comment on specific arrangements with brokers affected by the international exit or say how many are affected by the decision.
Wells earlier indicated that it would take at least nine months to organize a full shutdown of the international accounts, which headhunters said gives banks and boutique wealth firms specializing in servicing offshore residents a hiring runway.
More than 10,000 brokers work at the bank’s private client group, including about 300 designated as international brokers in New York and Miami offices. The plan to end servicing of offshore accounts also affects private bankers and advisors at Wells’s Abbot Downing family-office unit
“Advisors will be impacted differently and we are working with them very directly on their specific options,” Leordeanu wrote in an email.
The exit is part of a broad restructuring engineered by new management to eliminate business conflicts in the wake of the San Francisco-based bank’s fake account sales scandals that emerged more than four years ago. Regulators domestically and abroad have been cracking down on money laundering across borders, and U.S. regulators have capped Wells’ assets.
Officials at Wells Fargo Advisors began laying out contours of separation and retention offers in conference calls in recent weeks, the sources said.
While brokers willing to move can receive larger upfront deals than the 100% international match, it may be enough to convince some who are angry about giving up clients but wary of having to transition and repaper all their accounts, said Casey Knight, a Houston-based recruiter.
“If they don’t give advisors a reason to stay,” Knight said, “they’ll lose a large percentage of them.”
The retention bonuses fit with other efforts Wells Fargo Advisors has made to bolster its ranks following the departure of thousands of advisors after the scandals. The unit has increased recruiting deals to advisors and is offering higher-than-standard fees to headhunters who successfully recruit advisors.
Advisor headcount across Wells Fargo’s wealth and investment management division fell by 2% in 2020.