Wells Moves Closer to Consolidating Wealth Units
Wells Fargo Advisors executives are proceeding with a plan to fold bank-based brokers into the larger private client group sales organization, and are reassuring managers that client-facing brokers and sales associates in banks and freestanding brokerage offices won’t be affected, according to a source.
The message is doing little to reassure managers themselves who are waiting for details of who will be in charge once the 3,400 bank-branch advisors in the “wealth brokerage services” (WBS) unit are combined with the approximately 9,500 brokers in “private client group” (PCG) offices.
“Reductions will start from the top down and not affect the sales force,” a complex manager who was briefed on the progress of the reorganization this week said.
Jonathan Weiss, head of Wells Fargo & Co’s wealth and investment management division, which includes Wells Fargo Advisors, told the division’s 36,000 employees earlier this month to expect a broad reorganization in coming months that addresses “redundant and inefficient processes.” The plan is expected to integrate more processes and salary-based personnel from the bank-controlled trust and private banking units under the helm of Jay Welker into the brokerage businesses.
Weiss who asked employees to exercise “discipline, fortitude, integrity and compassion” as the broad reorganization unfolds, did not provide details, but the source said that the brokerage consolidation will take 12 to 18 months.
When completed, Wells Fargo Advisors is likely to be managed through about 15 regions, up from 12 today, several sources were told. Each region is led by a local president.
“If you’re a regional president and you know this channel collapse is coming, you are going to be having some sleepless nights,” said a former Wells manager who now works at a rival firm and is seeking recruits from his alma mater.
Some PCG managers in areas where Wells has many retail bank branches are worried that they may have to re-interview for their jobs, the source who received the reorg update said.
Wells Fargo Advisors spokeswoman Shea Leordeanu confirmed that a reorganization is being planned but said no final decisions on structure or leadership have been made. “That work continues,” she said.
The in-bank wealth brokerage services unit is headed by Jim Hays, while brokers in the private client group are jointly managed by John Alexander in the western half of the U.S. and by Rich Getzoff in the east. Hays, Alexander and Getzoff sit on Wells Fargo Advisors’ recently slimmed down operating committee, which is commanded by WFA President David Kowach.
Rationalization of different technology and back-office functions used in the two units has already begun, said the person briefed on progress of the reorganization, and technologies should be compatible by the end of September, the person said.
The wealth management reorganization comes at a sensitive time for the brokerage unit, whose leaders have been trying to offset a higher-than-usual number of advisor exits in the wake of scandals at the bank by offering special recruiting deals.
Leaders of the wealth and investment management division are aware of the anxieties that the planned reorganization is causing but cannot provide many details until legal details of the plan are ironed out, said the person who received this week’s update.