$4 Billion-asset Wells Fargo Team Goes Indie Via FiNet
Wells Fargo Advisors has notched a strategic victory by convincing a restless southern California team managing $4 billion of customer assets to join its Financial Network (FiNet) independent channel after ten years at its flagship private client group of brokers.
Mark Schulten and Allen Schreiber led their 40-person team in Long Beach to a new office affiliated with FiNet last week. The practice, founded two decades ago at Smith Barney by Mark’s father, Warren Schulten, produced $25 million of fees and commissions from clients in the past 12 months, according to Schreiber.
The Schulten Group ranked seventh on Barron’s 2019 list of Top 50 Private Wealth Management Teams, and Mark Schulten is among the top 10 producers within Wells’ 11,000-plus private client group, said people familiar with its internal rankings.
Wells Fargo Advisors has been positioning FiNet as a convenient alternative for brokers itching for more autonomy and higher payouts after more than 1,000 private client group brokers left since disclosure of fake account scandals at its sister bank three years ago. Wells last year reduced exit fees for advisors moving to FiNet to “ensure we provide choices for every advisor,” a Wells Fargo spokeswoman said, and insiders said private client group managers are credited for hires into FiNet.
“It’s been a dream of mine for a long time to have independence,” said Schreiber, adding that the team now rebranded as TSG Wealth Management was not interested in joining Wells’ new channel for fee-based registered investment advisers.
Staying within Wells as independent brokers brings the convenience of familiar systems and avoids the hassles of having to “repaper” client accounts at a time when the team is meeting the challenges of running its own business, Schreiber said.
The mega-team, which has outposts in Beverly Hills, Irvine and Reno, Nev., has growth plans built in part on alternatives to the post-retirement “sunsetting” payout programs that Wells and other large firms offer to encourage older advisers to move their practices to in-house colleagues.
“If an advisor is not ready to retire, or have a monetization, or sell their business, they can definitely come under our umbrella,” said Schreiber. “We’re offering them a 65% payout, and the potential tax advantages of being an independent advisor.” (Brokers in Wells private client group keep 50% of the revenue they produce after hitting monthly production hurdles.)
Schreiber, who joined the Schulten team at Smith Barney in 1998, said he and his partners aim to more than double client assets to $10 billion within five years, in part by inviting other teams to merge their practices and receive higher payouts.
Mark Schulten, who ranked #9 on Barron’s Top 1200 Financial Advisors list this year and #10 last year, began his brokerage career at PaineWebber in 1988. He joined Lehman Brothers four years later, leaving with his father for seven-year stints at Smith Barney. They joined Wells in early 2009 as Morgan Stanley began to absorb Smith Barney.
Warren Schulten, 80, began his brokerage career at E. F. Hutton in 1966, according to BrokerCheck. He continues to run his book of business on a daily basis, said Schreiber.
The group includes 11 other advisors and 26 associates ranging from sales assistants and traders to interns. Its clients have accounts ranging from $250,000 to more than $100 million, Schreiber said.