Wells Fargo has fired “a sizeable group” of salaried advisors, and more FAs are expected to be terminated, a spokesperson confirms without providing numbers or dates.
Wells Fargo’s strategy is “to focus on a highly productive team of advisors and to manage out underperformers,” the spokesperson tells FA-IQ in an email.
The terminated advisors served in multiple Wells Fargo advisory channels, according to a person familiar with the situation. Wells Fargo has multiple channels of advisors, including the Wells Fargo Advisors-led channel, formerly known as the Private Client Group; the Community Bank channel, formerly known as Wealth Brokerage Services; and Wells Fargo Financial Network, its channel for independent FAs.
On Wednesday, Wells Fargo reported that it had 12,908 advisors as of September 30 — down 390 from 13,298 as of June 30 and down 815 from 13,723 at the end of the third quarter of 2019.
“We anticipate that the number of advisors will continue to decline as we continue this strategy over the next couple years,” the spokesperson says, without providing specifics about which channels would be impacted.
“Wells Fargo has been transparent that we expect to reduce the size of our workforce through a combination of attrition, the elimination of open roles, and job displacements,” the spokesperson says.
More FAs also retired in the third quarter compared with the second quarter and the same period in 2019, the spokesperson says, without providing a breakdown.
The “average production levels” of the advisors who retired are “below the overall firm average,” and Wells Fargo is replacing them with more productive advisors, the spokesperson says.
“The productivity of our experienced new hires remained strong,” the spokesperson notes. The average new hire has a production of $704,000, which is greater than 100% more than the production of the advisors who left Wells Fargo, the spokesperson says.
“In short, we continue the trend of hiring larger producers than those who leave,” the spokesperson says.
Bill Willis, president and CEO of recruiting firm Willis Consulting in Palos Verdes Estates, Calif., believes “anyone who’s making great revenue there, they won’t be laid off.”
Meanwhile, the wealth management business represents a “sizeable franchise” for Wells Fargo” and is a “space that we love,” Wells Fargo CEO Charles Scharf told stock analysts yesterday during a conference call after the bank released its third quarter earnings report.
Wells Fargo is “just getting started” in “making progress at having its private bank and brokerage business work together,” Scharf said, without disclosing further details.
The executives Wells Fargo recently hired from other banks to its lead wealth management unit believe that the securities-based margin loan market represents an untapped revenue opportunity, John Shrewsberry, the bank’s chief financial officer, said on the same call.
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