Wells Pulls Out of International Wealth
Wells Fargo & Co. is abandoning servicing wealthy investors outside the United States as part of its efforts to rein in risk, Jim Hays, head of the bank’s wealth and investment management division’s client relationship group, told employees in an e-mail on Thursday.
“Wells Fargo is focused on meeting our regulatory requirements, managing risk, and simplifying operations across the company,” Wells Fargo Advisors spokeswoman Shea Leordeanu said. “For Wells Fargo Advisors, Wells Fargo Private Bank, and Abbot Downing, our core business focus is serving clients who primarily reside in the U.S. As such, we have decided to exit the international segment of our business.”
She declined to discuss how many of Wells Fargo Advisors’ approximately 10,000 private client group brokers work with non-U.S. accounts or on how many offices of the retail brokerage, the private bank or the Abbot Downing family office business are devoted to overseas clients.
“We understand this is a difficult change for our international-focused advisors and this business will take many months to exit,” she said. “Because this segment requires different processes, approaches and infrastructure maintenance, we have determined we will simplify the business.”
Merrill Lynch, UBS and Morgan Stanley have pulled back on servicing overseas investors in the face of intensified anti-money-laundering regulations in the U.S. and abroad, but none has made as clean a break as Wells announced.
Wells Fargo on Tuesday said U.S. bank regulators lifted a five-year-old consent order requiring it to improve money-laundering controls, but Chief Executive Charlie Scharf warned that the $1.9-trillion-asset bank company continues to wrestle with risk and infrastructure challenges.
“[R]emediating our legacy issues remain[s] our top priority, and the termination of this consent order is evidence of our progress,” he said in a prepared statement. “While we are pleased with this action, we have a significant amount of work ahead of us and are continuing to commit the necessary resources to this effort.”
Wells expects its shuttering of international accounts to take at least nine months, said a person familiar with its plans.
“We will continue to focus on providing our clients excellent service during this transition and will proceed in a manner that is consistent with regulatory expectations,” Leordeanu said. “We have a long process ahead of us.”
The exit will not affect servicing of active duty U.S. military and U.S. government employees who may be stationed abroad, she said.