Wells Fargo is sweetening incentives for financial advisers to find clients on their own and not just rely on internal referrals
- Wells Fargo's broker-dealer affiliate on Thursday shared with its advisers the new terms in its 2020 compensation plan.
- Wells Fargo Advisors is boosting incentives for its more than 13,000 advisers to find their own business, rather than source new clients through referrals from other areas of the bank.
- The San Francisco bank is still trying to put a massive phony retail account scandal that came to light three years and two chief executives ago, and has seen nearly 1,400 advisers exit since mid-2016.
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Wells Fargo Advisors is incentivizing its force of more than 13,000 financial advisers to go out and find their own business in 2020, highlighting the unit's focus on growth as its adviser headcount and asset levels have dipped in the past year.
Wells Fargo's broker-dealer affiliate on Thursday shared with its financial advisers the new terms in its 2020 compensation plan. One of the changes to the payout grid was a payout rate enhancement to new, self-sourced households brought in during the year.
Advisers will now be eligible for a true-up payment of half of the revenue generated from fresh clients brought on in the new year that advisers find themselves as opposed to clients that came as referrals from community bank or wealth management partnerships, or through a reassignment process Wells has for client books after another FA leaves.
The San Francisco-based bank is still trying to put a massive phony retail account scandal that came to light three years and two chief executives ago, and has seen nearly 1,400 advisers exit since mid-2016. The bank has said cross-selling and a culture of aggressive sales targets were to blame for the wide-ranging sales practices scandal.
Wells Fargo's broker-dealer affiliate has 13,723 financial advisers, and is among the largest US wealth managers along with UBS, Merrill Lynch, and Morgan Stanley.
Its retail advisory assets fell to $1.6 trillion in the third quarter, down 1% from a year earlier. Wealth management assets of $230 billion meanwhile fell 4% from a year ago.
Net outflows from that unit primarily fueled that drop, the bank said, as they did during the second quarter. Rival wealth manager Morgan Stanley meanwhile reported a 3% rise in wealth client assets from a year ago.
Wells Fargo continues to operate under an unprecedented growth freeze the Federal Reserve imposed in February 2018, and has pledged to address its company culture. The firm in September named Charlie Scharf, a longtime financial services executive, as its CEO after Wells' former general counsel led the bank for months.
Wells Fargo Advisors, which is headquartered in St. Louis, Missouri, has also seen a management reshuffle. In July it named Jim Hays, previously head of the Private Wealth Financial Advisors group, which caters to high-net-worth clients, as its new president and head. Hays took over for David Kowach, who shifted to head community banking.
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