Wells Reorganizes Wealth Division, Melding Private Bankers into Brokerage Unit
Wells Fargo & Co. is folding its Private Wealth businesses into its Wells Fargo Advisors brokerage business next year as part of the bank company’s far-reaching efforts to cut costs and conserve capital.
Some of the shifts have begun, but most of the transition of the private bank teams will occur in 2021, said Wells spokeswoman Shea Leordeanu.
She declined to confirm the number of employees in the private banking division, but one private bank advisor estimated there are about 400 advisors.
“We are bringing our brokerage and wealth businesses together into one client-facing structure,” Leordeanu wrote in an email. “By creating one overarching management structure, we will simplify processes, improve how we operate, and deliver even better and faster service for our clients.”
The shifts will reduce overhead costs by eliminating redundant management roles, part of the company’s ambition to cut $10 billion of expenses annually, insiders said. The ultimate goal is a single layer of regional and market managers, said a Wells Advisors branch manager.
Julia Wellborn, who headed the Private Wealth division since July 2019, has handed the reins to Jim Hays, who was elevated to president of Wells Fargo Advisors at around the same time. Wellborn is assuming a new position as head of client experience for the wealth businesses, and will retain some bank regulatory responsibilities for wealth activities, Leordeanu said.
Wellborn and Hays will continue to report to Sommers.
Details of the integration, including management lines and revised asset thresholds for clients to qualify for private wealth services are still being determined, according to a person familiar with the company’s strategy. One private banker said Wells expects to more than double account minimums to $5 million next year, but Leordeanu said no final decisions have been made.
In an earlier attempt to simplify management structures, Wells two years ago folded its Wealth Brokerage Services unit of brokers in bank branches into the larger private client group unit of Wells Fargo Advisors brokerage offices. It also reduced its geographic regions to 12 from 21.
The organizational shift of private bankers will not change compensation structures, said an insider familiar with the plans. Private bankers will continue to be paid primarily through bonus-supplemented salaries while brokers will receive a percentage of the fees and commissions they generate.
The restructuring of the wealth and investment management sector is part of a far-reaching drive by Wells Fargo Chief Executive Charlie Scharf to rebuild profit and capital in the wake of fake-account bank scandals that have shadowed the company for four years
Scharf is considering selling the company’s asset management business, Reuters reported this week. Wells earlier this week said it would end 401(k) matching benefits for employees making over $250,000 but rescinded the decision on Friday after internal backlash.
The plan to merge the private wealth and brokerage businesses was earlier reported by “FA-IQ.”
Why even work at any of these big brokerage firms. They offer nothing. Good brokers can now go Independent and have a great quality of life while avoiding all this corporate nonsense. And frankly, just tell your clients whenever your firm is being ridiculous. Your clients at big firms will leave and go anywhere with you. The day of the relationship being with any firm is completely over.
Sorry Silvio not true. If your a client with serious $$$$ are you going to work with an RIA who has zero reputation risk or with a large wire house who can stroke a check rather than bad publicity if you advisor does a runner with you money. Seriously the lack of oversight at all of these new RIAs would scare any client if they truly understood………..
YPOU CAN BE INDEPENDENT FROM WIREHOUSES, AND STILL PROVIDE SECURITY TO YOUR CLIENTS. USING AN LPL OR COMMONWEALTH, THE CUSTODY THE CLIENT FUNDS AND PROVIDE DIRECT SUPERVISION, NO ONE IS WALKING AWAY WITH CLIENT MONEY
Obviously you are a clueless sheeple. What oversight do you think is going on at the wire houses. Most of the management like Barry Somers who Jamie Dimon got rid of because he was promoted after running a 24 rep division at Bear Sterns vs 3400 at JPMorgan and knows nothing about nothing. Most Independent Firms have 10x better technology and compliance departments that actually know what they are doing. Most use Fidelity and Pershing to hold assets instead of trying to do it themselves without experience.
Perfect example HSBC in 2003 going self clearing and not having trade blotters for over 6 months. JPMorgan no better. We won’t discuss the total lack of supervision at Wells which is what caused all their problems in the first place. Get a clue before commenting.
FYI I was a Top Producer at Wells And JPMorgan. 80% of my clients went with me to our Independent Firm. 100% of the clients I wanted came. Obviously your clients relationship is with your firm and not with you. That tells me you are not an Investment Advisor and just an order taker. Stay where you are you will never make it as an Independent
If your consoling yourself that the price of keeping your clients is to put up with Wells’ annual Jenga dance with your grid, deferred comp and benefits package you are really misguided or under servicing your clients. The “brand” can be as much of a liability as a bonus. And that goes for all the wirehouses. You can see how top management views “us” in every earnings call when they talk about “labor/compensation expenses”.
Best advice is to work hard, keep in contact with your clients and they’ll mostly follow you.
When I left Wells Fargo for a regional 4 years ago, 99% of my households had followed me within 5 weeks of transitioning and my AUM actually increased. Many clients expressed relief that I was no longer at WFA and “found” new assets to consolidate. This was at the height of the scandals. Many of my clients had not heard of my regional employer as it was new to the area but it didn’t matter. Their trust and relationship was and is with me; not “the brand”.
As someone who works at an RIA, I agree with you on the lack of oversight. You would think that RIA’s would be under even more regulatory scrutiny when the opposite is true. You aren’t require to hold any securities licenses nor complete any CE which is ridiculous. RIA I work for actually tells potential new recruits that they “don’t need to be bothered with those licenses that aren’t needed.” My advisor though is a narcissist who want to train (a la “mentor”) new people in his image (may God have mercy on my town.) The other side is those licenses that you study and work hard to earn are gone within 2 years after going with an RIA if you had them. It makes you less marketable.
That all being said, how can you seriously look a client in the face and tell them to trust you and WELLS FARGO ADVISORS??
You should look into the Hybrid RIA model. Those firms have the best of both worlds. If you want to work with Securities and hold those licenses, you can. If you choose to drop those, you can affiliate directly with the RIA and not the BD, you can do that too.