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.