Two More Wells Fargo Advisors Teams Shuttle to Bank’s RIA Channel
Wells Fargo Advisors’ nearly one-year-old registered investment advisory channel has landed two more breakaway teams from its traditional unit of private client group brokers.
“We don’t do managed products and we’re not a sales shop or distribution center, so it didn’t make sense for us to be part of a company doing a lot of product distribution,” he said.
The move within Wells’ First Clearing operation simplifies the movement and maintenance of customer accounts for advisors and helps the bank keep some revenue that might have fled. Wells Fargo Advisors brokerage force has shrunk by more than 1,300 since its parent bank’s disclosure of fake account scandals three years ago.
Last week, the private client group husband-wife team of Steven and Johnelle Smith, together with advisor Scott Noel, left Wells Fargo Advisors branch in Indianapolis to establish an RIA under the First Clearing arrangement. They are transitioning about $350 million of customer assets, said officials at First Clearing and Trade PMR, the broker-dealer custodian that houses assets of clients in the new Wells channel.
The two teams bring to nine the number of former Wells private client group teams to join the new channel, said First Clearing President John Peluso. He had previously forecast that 11 teams would move this year, but said two shifts have been rescheduled to the first quarter of 2020 because of delays in securing real estate for their new offices.
“We’re right where we want to be,” he said, noting that the firm is focusing in 2019 on internal transfers before reaching out to other brokers looking to jump to the RIA model. “We continue to learn with each one of the transitions, and identify opportunities for us to improve.”
Absher, who started his career in 1996 at Wells predecessor A.G. Edwards & Sons, said client notes, account numbers, performance data and banking and direct deposit arrangements on his 250 accounts have shifted nearly seamlessly, avoiding the hassles that would have been involved if he had gone outside the Wells umbrella.
“This was the only move I truly considered,” he said. “I didn’t want to spend the next four months repapering the accounts.”
The Smith-Noel RIA in Indianapolis, christened the Monument Circle Group, financed some of its move by affiliating with RIA roll-up Wealth Advisory Solutions, while using Trade PMR as its custodian and retaining the First Clearing back-office. The team generated around $3 million of revenue in the previous 12 months, said a person familiar with their practice.
The advisors, who joined Wells in 2009 from Smith Barney, did not return requests for comment. Steven Smith began his brokerage career in 1986 at Daseke & Co. in 1986, moved to Smith Barney Shearson in 1987, and joined UBS Financial Services in 1993, according to his BrokerCheck record. He returned to Smith Barney in 2006 before jumping with his teammates to Wells.
Johnelle Smith started as a broker at UBS in 2000, shifting six years later to Smith Barney. She and Noel, who began his career at the Citigroup Smith Barney unit in 2008, both jumped to Wells Fargo Advisors in 2009 as their former firm was affiliating with Morgan Stanley.
“Many of the advisors have had years of service with our legacy firms, and this gives them the opportunity to continue that relationship and still be able to let their business mature into a fee-only RIA practice,” Peluso said. “It’s really a win for all parties.”
Last month, one of the largest teams at Wells, a group with $4 billion in client assets led by Mark Schulten and Allen Schreiber, shifted from the private client group to FiNet in southern California.