Wells Advisors Gives Headhunters More Time on Recruiting Bounty
In a sign of its hunger to replenish its scandal-depleted brokerage salesforce, Wells Fargo Advisors told headhunters this week that it will continue to offer them premium fees for persuading brokers to join any of its business channels.
Wells’ brokerage force has declined by 5.7%, or a net 860 retail advisors, since its parent company disclosed that retail bankers had opened unsought checking accounts and credit cards for customers in September 2016, a scandal that has spread to other parts of the company.
To help combat the sales force erosion, Wells in April told outside recruiters it will pay them 10% of the revenue that a successfully-recruited candidate produced in the previous year—well above the typical fee of 6%. The offer was scheduled to end on September 30.
In a brief call with recruiters on Monday, a Wells Advisors official said the firm will extend the premium through the end of 2018, according to several who spoke on condition of anonymity. Wells did not tell them how many new advisors have joined as a result of the bounty.
“Our recruiting program has been very successful because of it and we’re really excited about what we’re seeing in our pipeline,” Wells spokeswoman Helen Bow wrote in an e-mail. “This is why we’re extending past the original timeframe.”
Some headhunters had said that the six-month timeframe for landing recruits was too short, particularly for convincing experienced brokers to join the scandal-plagued firm.
In the last few weeks, to be sure, Wells has landed several producers from rival wirehouses, including an $800,000 broker in Omaha and a 39-year industry veteran in Plano, Texas, producing $1.6 million, both from Morgan Stanley. It also this month hired a $1.7-million producer near Los Angeles from UBS.
Bow would not comment on whether those advisors had joined under the special recruiting program. Wells has been offering some experienced brokers deals to inherit books of departing brokers, according to some sources, and more than a year ago upped its recruiting deal for top-level advisers. The deals come as Morgan Stanley, UBS and Merrill Lynch have cut back on recruiting.
The premium for headhunters continues to apply to recruits who join Wells’ private client group network of some 10,000 brokers, and its smaller in-bank broker and independent contractor Financial Network channels. In a sign that the scandal’s tentacles have extended throughout the retail brokerage world, Wells also is paying the higher fee to recruiters who convince advisors to join small broker-dealers that clear through Wells’s First Clearing affiliate.
As of June 30, Wells Fargo had 14,226 retail advisors, down from 15,086 at the end of September 2016, the month that the bank disclosed its settlement over the initial fake-account scandal, according to its earnings reports.
Wells Fargo Advisors also has been making management changes that several sources said telegraph a back-office consolidation of its various brokerage channels that will soon be announced.
Three executives who had been on the firm’s operating committee—chief information officer for brokerage technology Cindy Buckler, director of marketing JoAnn Neau and services and operations head John Parker—are no longer on the committee, according to a firm webpage. The committee now includes 17 executives.
Parker, who had been with Wells and predecessor firms A.G. Edwards and Wachovia Securities since November 2001, has retired, said a person familiar with Wells management structure. Buckler and Neau remain with Wells but are no longer dedicated to Wells Fargo Advisors alone, the person said.
Buckler, who joined Wachovia Securities in 1996 and had served as chief technology officer, could not be reached for comment and Neau—who arrived at Wells’ Abbot Downing unit for ultra-high-net-worth clients in 2014 after a marketing career at RBC Wealth Management—did not return a message left on her office phone. Parker could not be reached for comment.