Small-Town Advisor Departures Raise Agita at Firms Left Behind
When Jackson Rhoades packed up the 12-person Wells Fargo Advisors branch he managed in Mountain Home, Arkansas, on October 1, word spread fast in the southern Ozark Mountains community where he had managed portfolios for some 20 years.
The broker, who had spent his entire career with Wells and predecessor firm A.G. Edwards, told local radio station KTLO-FM that a significant value of opening an independent brokerage practice affiliated with Raymond James Financial Services was its distinctiveness from his former home.
“[W]hat they have gained with the move is the ability to focus on what they think matters most, versus what a corporate parent might set as its goals,” reporter Karen Hopper said in an October 4 story about the move.
Three days later, a local paper called the “Baxter Bulletin” highlighted the news under the headline “Former Wells Fargo Consultants Strike Out on Their Own,” and directly referenced the KTLO commentary.
“Branch Manager/Registered Principal Jackson Rhoades told radio station KTLO that the new company would have the same investments abilities as those found with Wells Fargo Advisors [and] would give the financial consultants the freedom to focus on what they believe matters most, instead of what a corporate parent might set as goals for a local branch,” the article said.
It also gave readers in the town of 12,400 people—which according to BrokerCheck employs 40 registered advisors, primarily with Edward Jones and independent broker-dealers—the names of all team members along with their new address and phone number, and reported the contention of the group’s “business controller” that “Wells Fargo should have notified clients about the financial consultants leaving.”
Neither of the reports discussed the assets managed nor the revenue that Rhoades team produced, but they did say his team works with clients in 45 states.
Rhoades, who has won trade magazine accolades several times as a Top 100 Branch Manager of his single-practice office, did not return a call for comment on his move, on Wells’s response to the press coverage or on whether his Wells employment contracts included anti-disparagement clauses.
Wells Fargo Advisors spokeswoman Helen Bow declined to comment on the Arkansas team’s departure and the surrounding press coverage.
The web page for Rhoades’ new practice, the Financial Services & Investment Strategies Group, takes a further, if more subtle stab, at his former employer.
“Inspired by a deep conviction for advocacy, honesty, integrity and stability, Jackson joined Raymond James in 2018,” it says. “He values working with a firm that continuously strives to empower its advisors and grants them the independence to build long-lasting, multigenerational client relationships without having to worry about external pressures.”
Raymond James has for years taken pot shots at wirehouses, frequently issuing press releases in which newly hired advisors discuss compromises they were pressured to make in servicing clients at their former firms.
The reputational damage from such publicity is likely to be much greater in small communities than in major metropolitan areas, according to marketing executives.
“Where somebody in Chicago wouldn’t cover the move, the bottom line is in a small city, they often get a lot of attention,” said Jack Waymire, co-founder of Paladin Digital Marketing, a branding and lead generation company. “The implication is often, ‘I’m being told what to do and it wasn’t in the best interests of my clients.’ It’s pretty easy to segue from that into, ‘We’re local and independent and can do what’s best for my client.’”
Rhoades’ team includes three other financial consultants—Michael Stockton, Janet Schmeski, and David Matty—six associates branded as “client advocates,” an assistant office manager and a “client financial plan manager,” according to its webpage.
For Wells Fargo Advisors, the Arkansas departure extends a widespread exodus of brokers nationwide in the aftermath of the fake bank- and credit-card account scandals that Wells’s parent disclosed two years ago. Headlines about other investigations of alleged abuses caused by the company’s hyper-charged corporate sales culture have led to a decline of at least 860 advisors within Wells Fargo’s retail brokerage channels.
Wells remains one of the largest retail brokers in the country, employing some 14,200 advisors across its private client group, independent broker and banking channels.