Stifel Snares $400-Mln-Asset Wells Fargo Team in Oklahoma
(Updated with comment from Wells Fargo in seventh paragraph.)
Three brokers in Oklahoma who have spent their entire careers at Wells Fargo Advisors’ private client group and predecessor firms joined Stifel, Nicolaus & Co. on Thursday, continuing a slow drain out of Wells.
John Brendan Wolverton, a 29-year industry veteran who began his brokerage career at A.G. Edwards & Sons in 1989, led the team that has set up Stifel’s first outpost in their hometown of Lawton. Joining him were Alen Jerry Pellerin—his business partner of 14 years—and Lawton’s son, Joshua Brendan Wolverton, who has been a broker for five years.
They had been overseeing $400 million in client assets at Wells, according to Stifel spokespeople.
The senior Wolverton, 58, who goes by the name Brandon, said his group was frustrated by Wells’s decision to focus brokers on servicing large accounts, given the wealth demographics of Lawton, Oklahoma’s fifth largest city with a population of under 100,000.
Wells Advisors’ 2018 compensation plan offers significant payout enhancements to top brokers if at least 75% of their accounts have $250,000 or more, and has for several years encouraged them to send lower-tier households to call centers or junior, salaried brokers known as “financial relationship advisors.”
“They’re really pushing you to get rid of a significant part of the smaller portion of your book,” he said, lamenting management’s impatience with working with young investors who over time can become multimillion-dollar clients. “Where I live, that gets around town quickly and can cause a lot of headaches.”
In an emailed statement, Helen Bow, a Wells Advisors spokeswoman defended its client segmentation approach.
“We have a segmentation strategy which provides clients with the right investment services based on individual needs and allows FAs to provide service to the clients that require more attention,” Bow wrote. “Meanwhile, Financial Relationship Advisors (FRAs) and Digital FRAs work as part of a team to help provide solutions for clients that are appropriate for their investment objectives—even if they’re considered to be part of the ‘smaller portion of a book of business.'”
Wells Fargo Advisors is, to be sure, not alone in focusing advisors on the wealthy. Merrill Lynch does not pay brokers on accounts under $250,000, and Minneapolis-based RBC Wealth Management U.S. last week confirmed plans to have brokers off-load accounts under $100,000 to call centers.
A UBS Wealth Management team in Akron, Ohio, jumped to J.J.B. Hilliard, W.L. Lyons in May, citing concerns about that firm’s upmarket pressures.
RBC on Thursday flaunted its own recruiting flag at Wells’s expense, saying it hired Jim Aid—a Nashville broker who was managing $900 million for retail and institutional clients. Aid, who had been with Wells since October 2008, began his brokerage career at NationsSecurities in 1994.
Wells Fargo Advisors has reported net losses of more than 600 brokers since its parent company disclosed a fake-account scandal at its consumer bank in September 2016. The scandal, while not centered at the retail brokerage firm, has been a perpetual irritant, Wolverton said.
“We started getting a lot of pushback after that from clients,” he said. “That did not drive our decision, but it certainly was agitation that we got tired of dealing with.”
Financial advice is something of a family business for the Wolvertons. Brendan’s father, Morton, who is 84, works at Ameriprise Financial Services (in Sarasota, Fla.) and has been a broker since 1989 (when he registered with PaineWebber).
The new Stifel office, its fourth in Oklahoma, reports to “central region” director Kevin Ortmeyer, who joined Stifel from Wells one year ago.