Wells Fargo Advisor Ranks Fall by More Than 1,200
Wells Fargo has a lot fewer advisors than it did a year ago: 1,241 fewer to be precise.
The firm has struggled with advisor attrition in recent years, losing talent both to retirement as well as to the competition. The company counted 12,552 advisors at the end of the third quarter, down from 13,793 for the same period last year, according to Wells Fargo’s quarterly earnings report. That’s also down from 15,086 advisors Wells Fargo had for the third quarter of 2016, when a fake accounts scandal rocked the bank, cost it billions of dollars, set off a series of regulatory investigations and actions that ultimately led to the departure of several top executives.
Charles W. Scharf took over as CEO in 2019, and has attempted to turn the page on Wells Fargo’s past.
“We are a different bank than we were several years ago, and we run the company with greater efficiency, great transparency, and operating discipline,” he said during the company’s third-quarter earnings call. “We have a new leadership team: Fifteen of 18 operating committee members are now new to their roles.”
The bank posted a 59% year-over-year increase in profits, with net income hitting $5.1 billion.
Net income for the firm’s wealth and investment management business also rose, increasing 38% to $579 million for the quarter. The company attributed a 10% rise in revenue to expense discipline and earning higher asset-based fees as market valuations rose.
Total client assets of $2.1 trillion were up 13% year over year, but down 2% from the prior quarter. Morgan Stanley , which also issued earnings the same day, reported client assets of $4.629 trillion, up 62% from the year-ago period and up 2% from the prior quarter.
Wells Fargo’s wealth management unit includes its traditional wirehouse brokerage business as well as its private bank and independent broker-dealer. The unit offers brokerage services, financial planning, banking, credit, and other services to high-net-worth and ultrahigh-net-worth clients.
The company recently ceased serving international wealth management clients; advisors who served that clientele have decamped for other rivals, such as Snowden Lane Partners. Wells Fargo has lost some advisors to other competitors. For instance, Stifel Financial said Oct. 14 that it had hired Steve Seiler, an advisor who spent nearly 23 years at Wells Fargo. He oversaw $267 million in Overland Park, Kan.
A company representative said that advisor productivity, at $1.141 million per advisor, is up 21% from the previous year, that attrition has slowed since last quarter, and that the firm’s recruiting pipeline remains strong.
“This represents the last significant quarter of international advisor departures,” the representative said. “We also experienced retirements along with some departures from both Wells Fargo Advisors (WFA) and the Private Bank. At the same time, we saw an increase in hiring momentum this quarter with an influx of million-dollar producers joining in channels across WFA.”
During the earnings call, Scharf said that Wells Fargo’s multiple channels may help it attract advisor talent. It’s also exercising expense discipline, he said, adding that the firm is currently “rationalizing” its real estate footprint.
Furthermore, it sees opportunities to expand its bank branch advisor network and other wealth management businesses. “I think we feel that we have underinvested in the online piece and the independent [advisor] piece for sure,” he said.
About Snowden Lane Partners
Snowden Lane is a nationally branded, open-architecture, hybrid registered investment advisor and
broker-dealer that provides wealth advisory services to high net-worth individuals, families, and
Snowden Lane is led by an experienced team of industry executives, including Lyle LaMothe, Chairman
of the Board of Managers, Rob Mooney, Managing Partner & CEO, and Greg Franks, Managing Partner,
President & COO, who are dedicated to building a client-focused, nationally branded, boutique wealth
Snowden Lane is headquartered in New York City and operates an SEC registered investment adviser
and a broker-dealer. Snowden Lane provides a multi-custodian, multi-currency platform, with
aggregated performance reporting and leading analytical tools for clients and advisors. It further
provides full operational, finance, compliance, human resources, and financial advisor transition support
to its financial advisors.
For more information about Snowden Lane, please visit www.snowdenlane.com.
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