FiNet adds hybrid affiliation option for new recruits

The new initiative comes as the Wells Fargo B-D sees record six-month hiring period

Aug 2, 2013 @ 3:44 pm

By Dan Jamieson

+ Zoom

Wells Fargo Advisors Financial Network LLC, the independent brokerage arm of Wells Fargo & Co., commonly known as FiNet, has quietly begun offering a new hybrid affiliation option for advisers who want their own RIA firms.

FiNet recruiters began offering the new option two months ago, said Kent Christian, FiNet president.

“We know there are practices in the market where that [independent RIA] business model has appeal to them,” Mr. Christian said. “We're looking to see if that model meets the demand or piques interest.”

The firm has “a handful of practices in conversation” about the new option, he added. “We're really just getting off ground.”

FiNet's hybrid option requires advisers to custody advisory assets at FiNet, but Mr. Christian said in the future the firm may allow its hybrids to use outside custodians.

“In phase one [advisers will] custody those assets here [but] we know the market has a multi-custodial bias,” he said.

Competing independent firms have been aggressively going after independent RIAs, with some offering multi-custodial options for advisory assets.

Despite its traditional approach in the independent space, FiNet has continued to grow, recently turning in its second-best six-month recruiting period ever, officials said.

During the first half of this year, FiNet brought in 34 new adviser practices with more than $5.4 billion in assets, the best half-year period since 2009 when many wirehouse advisers were fleeing from their firms, Mr. Christian said. FiNet currently has 1,208 advisers in 577 practices managing more than $69 billion.

In 2002, when predecessor firm Wachovia Securities acquired the independent business with its purchase of First Union Securities, FiNet had 320 advisers in 140 practices. A FiNet spokeswoman did have asset data from that period.

“A lot of our success in 2013 was driven in large part by interest from folks at wirehouses,” Mr. Christian said.

Recruiters say a big attraction is FiNet's recruitment package, which is at the high end for an independent firm — around 25% of trailing twelve months revenue with additional back-end incentives that can take the total package near 100%.

Mr. Christian wouldn't discuss details of FiNet's recruiting deal.

“We're willing to be fairly aggressive in the independent space” for the right recruit, he said.

In 2006, Wachovia opened up the FiNet channel to its employee advisers. Mr. Christian said 30 to 40 advisers at Wells Fargo Advisors move to FiNet each year.

The independent unit cannot actively recruit those W-2 employees, nor will FiNet pay transition assistance to anyone at Wells Fargo Advisors.

But an internal transfer to FiNet makes little sense for an adviser at Wells Fargo Advisors, said one recruiter who asked not to be named since he does business with Wells Fargo's firms.

“Other independent firms are equally as good … and you get transition money,” he said.

But for those outside the Wells Fargo umbrella, FiNet is a good option, recruiters say.

Indeed, FiNet points to some notable recruits it landed this year from a number of competing wirehouses.

Joining the firm from Morgan Stanley were Ed Burke and Jeff Altomari, a $165-million-in-assets team in Highland, N.Y.; Ralph Lynch and Maureen McPeek in Glenview, Ill., a brother-and-sister team with $406 million under management; and Larry Hensle, George Fleeson, Mike Harper, Steven Skonberg and Scott McLaughlin, a $529 million team in Reston, Va.

In addition, Houston-based J.D. Joyce, who handles $306 million in assets, joined from UBS Financial Services Inc.; and Scott Christian, BJ Loyd and Mike Masters, an Alpharetta, Ga. team with $345 million in assets, that came over from Merrill Lynch.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Upcoming Event

Apr 30

Conference

Retirement Income Summit

Join InvestmentNews at the 12th annual Retirement Income Summit - the industry's premier retirement planning conference.Much has changed - and much remains to be learned. Attend and discuss how the future is full of opportunity for ... Learn more

Featured video

Events

3 themes shaping your business now

If there are three overriding themes for advisers right now its succession planning, acquisition and hiring millennials. Financial adviser James Loftin discusses how his firm is tackling all three.

Video Spotlight

The Search for Income

Sponsored by PGIM Investments

Recommended Video

Path to growth

Latest news & opinion

T. Rowe Price steps up its game to serve financial advisers

The Baltimore-based mutual fund giant is more aggressively targeting financial advisers with a beefed-up wholesale crew and placement on custodial platforms.

The most important tax changes for 2018

The Internal Revenue Service issued inflation adjustments to more than 50 tax provisions for 2018.

Shift to Roth 401(k)s 'highly likely' part of tax reform: former Treasury official Mark Iwry

Mandated contributions to Roth accounts would likely only be partial, as opposed to having a full repeal of pre-tax accounts.

E*Trade acquiring custodian Trust Company of America

Discount broker buying second-tier custodian for $275 million.

Another thousand Dow points higher, and investors yawn

Market milestones keep falling like dominoes, with 51 records broken so far this year.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print