Wells Fargo Wealth Boss Weiss Telegraphs Major Reorganization
The head of Wells Fargo’s Wealth and Investment Management division warned employees Wednesday that they will have to exercise “discipline, fortitude, integrity and compassion” as details of a restructuring in the unit are announced over the next few weeks.
Without providing details, Jonathan Weiss told the division’s 36,000 employees in a memo on Wednesday that the changes will affect a wide range of client-facing, middle and back-office activities and are “absolutely necessary for the long-term health of our business.”
The memo did not address the fake-account scandals that have shadowed Wells Fargo for almost two years but said that the model under which private bankers and financial advisors have been operating will change because it limits the “advice, service and solutions offered to our clients.”
“Like Wells Fargo as a whole, Wealth and Investment Management has evolved over many years, through acquisition and organic growth, into a federation of businesses that collaborate, to some extent, but that also encompass a number of redundant and inefficient processes,” Weiss wrote.
Employees in the division, which includes 14,200 Wells Fargo Advisors brokers, have been expecting a reorganization that would center on eliminating staff and operational duplication reflecting years of acquisitions of regional brokerage firms.
Some managers also have been expecting Weiss to reduce overhead by integrating management of the company’s bank-branch brokerage operations more closely with its autonomous brokerage offices. Three members of Wells Fargo Advisors’ operating committee who focused on tech, services and marketing have stepped down in recent days.
Wednesday’s memo from Weiss promised only a “series of initiatives designed to improve how we function.”
The five organizing tenets of the reorg, he wrote, are “simplifying our front-line client businesses,” “leveraging common operations in the middle and back office,” “streamlining product delivery to improve service and reduce operational risk,” “investing in technology and digital,” and “concentrating on our core businesses.”
Those bullet-pointed tenets, along with buzz phrases about working “faster, simpler and better” and the call to show compassion, were enough to escalate concerns about the reach of the changes, said several Wells Fargo Advisors brokers and managers.
“More doubt and questions,” a complex manager wrote in an email. “Very disappointing memo with not much detail.”
Shea Leordeanu, a spokeswoman for Wells Fargo Advisors, said the memo lacked specifics because “no final decisions” have been made. She noted, however, that the core service channels to wealth management customers will remain.
“Whatever the outcome, we will continue to serve our clients across multiple channels—Community Bank branches, P[rivate] C[lient] G[roup] branches, FiNet [independent brokers], hubs [from bank branches to private client group brokers], online and by phone,” she wrote in an e-mail.
Weiss, who became head of the wealth unit 13 months ago after running Wells and predecessor Wachovia Corp.’s investment banking and capital markets businesses and who received $6.45 million of 2017 compensation, was not available to comment, the spokeswoman said. His division, which also includes the company’s asset management and retirement services units, contributed 19% of Wells Fargo & Co.’s revenue in 2017 and 12% of its profit.
“We will need every business—and every member of the team—to help lead the evolution of Wealth and Investment Management,” Weiss wrote. “Along the way, no doubt we will need to make choices and difficult decisions….As different phases of our work begin, we will share more details. I commit to you all the transparency we can provide.”