In a turnaround, Wells Fargo Advisors sees slight bump in headcount

Racked by a scandal in its retail banking unit, Wells still managed to add 37 new advisers in the third quarter, a small number but an improvement nonetheless

Oct 13, 2017 @ 2:00 pm

By Bruce Kelly

Wells Fargo Advisors has staunched the hemorrhaging of financial advisers — for now, at least — that has plagued it since last year when its parent, Wells Fargo & Co., revealed a widespread banking scandal that affected its retail customers.

The firm reported that it had14,564 registered reps and advisers at the end of September, according to figures released Friday as part of the bank's third quarter earnings. That was an increase of 37 advisers from the end of the second quarter, but well below the 15,086 it had at this time last year. Year-over-year, the number of advisers is still down 3.5%

According to Bloomberg News, Wells Fargo's banking franchise has struggled to attract customers after news broke last September that branch bankers opened thousands of accounts without customer approval to meet aggressive sales targets. The scandal cost the bank's chief executive his job and resulted in a $185 fine from regualtors. More recently, Wells Fargo has come under fire over auto-loan clients who were forced to pay for unwanted car insurance and mortgage customers who were improperly charged fees.

Some financial advisers working for Wells Fargo have privately complained that the banking scandal has tarnished the company's reputation with brokerage clients and some advisers have moved to new firms. In August, LPL Financial said that 15 or the 72 teams of brokers it had signed up in the second quarter — or 21% — had come from Wells Fargo Advisors.

Wells Fargo has not been sitting on its hands as its headcount of advisers has dropped. In May, it announced it would boost bonuses to adviser recruits, at the same time its wirehouse rivals — Morgan Stanley, Merrill Lynch and UBS Wealth Management Americas — indicated they would pull back on such recruiting efforts. Some believe being aggressive with signing bonuses could help shore up adviser head count.

"We have seen a quarterly uptick in headcount and feel good about the quality recruits in our pipeline," said Wells Fargo spokeswoman Emily Acquisto. "We continue to invest in training models for attracting and mentoring new talent, while dedicating resources and support for experienced, high-quality advisers — and it's working for us."

Meanwhile, Merrill Lynch reported 14,954 advisers at the end of the third quarter, an increase of 286, or 2%, when compared to same period last year, according to its parent, Bank of America Corp., which also reported third quarter earnings on Frida.

Productivity per adviser dipped slightly, Merrill reported, to $994,000 on an annualized basis from a little over $1 million at the end of June. The decline was driven by lower net interest income as client rates on deposits increased during the quarter, the company said, as well as costs from the continued investment in its training program.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

Why some retirement plan advisers think Fidelity is invading their turf

InvestmentNews editor Frederick P. Gabriel Jr. and reporter Greg Iacurci talk about this week's cover story that looks at whether Fidelity Investments is stepping on the toes of retirement plan advisers.

Latest news & opinion

Is Fidelity competing with retirement plan advisers?

As the Boston-based mutual fund giant expands the products and services it brings to the retirement market, some financial advisers say the firm is encroaching on their turf.

Gun violence hits investment strategies, sparks political debates with advisers

Screening out weapons companies has limited downside.

Whistleblower said to collect $30 million in JPMorgan case

The bank did not properly disclose that it was steering asset-management customers into investments that would be profitable for JPMorgan Chase.

Social Security underpaid 82% of dually entitled widows and widowers

Agency failed to tell survivors that they could switch to a higher retirement benefit later.

If Finra eases firm oversight of outside business activities, broker-dealers could lose revenue

Brokerage firms would no longer be able to charge reps for supervising nonaffiliated RIAs.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print