Wells Fargo Advisors continues to bleed reps

Wells Fargo Advisors continues to see a decline in the number of brokers and advisers working at the firm’s various channels, reporting Friday a net loss of 145 reps over the first three months of this year.

A spokeswoman for Wells Fargo Advisors, Emily Acquisto, said in an email that the firm “feels no need to focus on raw headcount numbers” of brokers and advisers. The decline represents 1% of their adviser workforce.

“We are seeing strong revenue growth and feel good about our pipeline of experienced recruits and new trainees joining adviser teams,” Ms. Acquisto wrote. “The first quarter’s 1% decline is statistically flat, consistent with demographic trends and far outweighed by improvements in FA productivity, which grew by 7% year-over- year.”

The retail brokerage unit of Wells Fargo began to hemorrhage advisers in the second half of 2016; that September, the parent company revealed a scandal in its retail banking that resulted in Wells Fargo being fined $185 million for opening banking accounts for a few million customers without their knowledge or approval.

Some Wells Fargo reps and advisers have retired and others have jumped to competing firms, including independent broker-dealers. Over the last year and a half, Wells Fargo Advisors has seen a 4.5% decline in its advisers workorce, falling from 15,086 in September 2016 to 14,399 at the end of March.

A source familiar with the operations of Wells Fargo Advisors said that in 2017 and so far in 2018, 284 advisers retired from the firm.

The decline in financial advisers is among the largest on Wall Street.

The CEO of Wells Fargo & Co., Tim Sloan, said on a call Friday morning with analysts that turnover among employees across the bank’s various businesses had tapered off recently and that the bank is attracting high quality people at senior leadership positions.

Asked about turnover at Wells Fargo Advisors, Mr. Sloan said that the financial adviser population that could be leaving to go to competitors had declined by 24% and the recruiting of experienced financial advisers was up. The productivity of Wells Fargo financial advisers was also up, he added.

Retail brokerage reported client assets of $1.6 trillion, up 4% from the previous year, while wealth management reported client assets of $242 billion, a year-over-year increase of 2%.

Wells Fargo Advisors is also trying to sweeten the pot for advisers who may seek an increased payout by changing channels at the firm.

The independent contractor arm of Wells Fargo Advisors, Wells Fargo Advisors Financial Network, or FiNet, intends to make it easier this year for brokers who are employees to jump to FiNet, InvestmentNews reported in January.

Most recently, Wells Fargo said at the start of March that the Department of Justice has instructed Wells Fargo & Co. to conduct an independent investigation of its wealth and investment management business, which includes Wells Fargo Advisors, after whistleblowers flagged “sales problems” in the unit, according to a company filing.

“Our top priority is to rebuild trust with all of our stakeholders,” Ms. Acquisto said.

Related Topics: Wells Fargo & Co.