Wells Rivals Announce Spurt of Recruiting from Scandal-Tarred Firm
Wells Fargo Advisors was feeling the post-holiday blues acutely on Tuesday, as three competitors from smaller firms said they hired brokers collectively managing $750 million of customer assets from the bank-owned firm’s private wealth group.
The announcements came as Wells’ near year-long effort to overcome its consumer bank’s fake-account scandal continued. The San Francisco-based bank company last week said employees had created as many as $3.5 million fake banking and credit card accounts, 67% more than originally estimated, shortly after disclosing sale of car insurance policies to 490,000 customers who didn’t ask for them.
While the retail brokerage unit of the bank has remained unscarred by the direct scandal, the number of brokers working in the firm’s private client, independent and banking channels fell in the past year by more than 3% to 14,527, despite sweetened recruiting bonuses.
On Tuesday, RBC Wealth Management-U.S. said it hired former Wells brokers James Carbonell and Matthew Forrey in Walnut Creek, California. They were managing $365 million in assets at Wells, RBC said.
Carbonell, who started his career 20 years ago at Dean Witter Reynolds, had been with Wells Fargo for 12 years while 21-year industry veteran Forrey had been with Wells for 17 years, according to their BrokerCheck histories. They joined RBC on August 30 along with a client associate.
Raymond James Financial dipped into the Wells pool in Baton Rouge, La., hiring two separate teams who began their careers at Wells predecessor A.G. Edwards. W. Bowen McRae, a nine-year veteran who managed around $200 million in assets, moved with a client associate.
Another team led by Roger Sullivan and Kyle Hawthorne, who oversaw $145 million in client assets and had $800,000 in production, made the move to RayJay. Sullivan was with Wells and predecessors for 17 years while Hawthorne joined Wells in 2014 after an earlier career as an attorney, Raymond James said.
Separately, former Wells Fargo Advisors and Merrill broker John C. Nielsen joined the Scottsdale, Ariz., office of hybrid registered investment advisor Stratos Wealth Partners in early August, he confirmed.
Nielsen, who said he was managing about $40 million as a single practitioner within Wells’ private wealth channel for about 55 households, said he picked the LPL-affiliated advisory firm primarily because of superior technology and less-intrusive compliance strictures.
“It sounds silly, but the most annoying thing at Wells Fargo is not being allowed to forward (office) calls to your cellphone,” he said. “You can be out without clients on a Friday afternoon and not find out that other clients were calling until Monday morning.”
He characterized the eMoney software at Stratos/LPL as a “night-and-day” difference over the client communications technology at Wells, noting that his former firm didn’t have the capability of allowing clients to view their financial plans online. He also said that the ability to use electronic signatures for account openings, transfers and other authorizations were a vast improvement over the paper-based bureaucracy at the bank-owned broker-dealer.
The enduring scandal headlines and pressure to sell loans and mortgages also were a persistent annoyance, he said.
Bobbie Meola, a Stratos managing partner in Arizona who formerly worked at Wells, said she has recruited 14 advisors from her alma mater since joining Stratos four years ago. The banking scandals don’t make it easier to encourage brokers to move, she said, but once they make the decision they can cite them to former customers as reasonable motivations for switching, she said.
Nielsen, whose customers are primarily in fee-based wrap accounts, said he interviewed with UBS Wealth Management—which discussed having him join an existing team—Morgan Stanley and Raymond James before making his move after six years at Wells and two at Merrill. He seriously considered RayJay but was won over by a due diligence trip to LPL in San Diego, he said.
Stratos’ Scottsdale office last week announced through LPL that it had recruited two Merrill Lynch brokers who were managing about $311 million of client assets.
RBC last week said it added Wells broker Jared Smith with $1.8 million in production in Charlotte, N.C. who claimed he was looking for a firm with an “impressive reputation.”
A Wells spokeswoman declined to comment.