Wells Fargo Integrates Bank-Housed Brokers into Private Client Group
Wells Fargo Advisors head David Kowach has added oversight of the 3,400 brokers that work out of bank branches to the franchise of more than 11,000 traditional brokers in his domain, according to an internal memo.
The shift is the first leg of a broad reorganization that Jonathan Weiss, head of the bank company’s 36,000-person wealth and investment management division, has said he would be unveiling as part of a plan to save $600 million in annual expenses.
Weiss earlier this month said he will be targeting “redundant and inefficient processes,” and asked employees to demonstrate “discipline, fortitude, integrity and compassion” as the changes unfold.
In a memo sent Wednesday afternoon, Kowach and Wells Private Bank President Jay Welker said the shift of the bank-housed brokers to Wells Fargo Advisors will have “no impact” on brokers or managers already working in Kowach’s domain of 9,500 private client group brokers and 1,100 “independent contractors” in the Financial Network (FiNet) channel.
But managers in the bank-based “Wealth Brokerage Services” unit, which generally services less wealthy clients than the private client group, are affected.
Jim Hays will continue to be in charge of WBS brokers but will report to Kowach under the new alignment, with dotted-line reporting to Welker, according to the memo. So-called “senior directors of brokerage” who oversee the bank-based brokers and some private bankers, will now report to Hays instead of to Welker, the memo said.
The differing compensation schemes for private client, wealth brokerage services and FiNet brokers will continue unchanged, a Wells spokeswoman said.
Kowach and Welker did not discuss what kind of operational efficiencies may result from the changes, but emphasized that Wells is retaining its strategy of servicing clients with varying needs through different service levels from advisors.
“We were the first in the industry to create the multi-channel model, and we believe advisors working in different channels is a competitive advantage,” Kowach and Welker wrote.
Wells Fargo Advisors is the only national “wirehouse” firm that is actively recruiting experienced brokers. It is trying to offset a loss of more than 850 brokers since its parent company disclosed a settlement two years ago with state and federal regulators over allegations that bankers created unwanted and sometimes fictional bank and credit card accounts for retail customers.
—Jed Horowitz contributed to this story.