Industry News

For Wells Fargo Advisors, finding new clients becoming difficult

New business is 'harder and harder' to bring in the door, says a senior executive.

Wells Fargo Advisors is having a tougher time finding new clients, according to a senior executive at Wells Fargo & Co., despite the fact that the bank is sending $10 billion in client asset referrals annually to its wealth management group.

“It’s harder and harder to find as many clients who are interested in full-service brokerage,” said John Shrewsberry, chief financial officer for Wells Fargo & Co.

Client referrals have been a keen issue of interest for Wells Fargo Advisors for the past two-and-a-half years; that’s when scandals that tarnished the bank’s brand began to dog Wells Fargo and its wealth management business.

Some of Wells Fargo’s 13,968 financial advisers have recently commented that gaining new clients has not been a problem, but others, including former Wells Fargo brokers, have said that the bank’s tarnished reputation is taking a toll on both clients and brokers.

Mr. Shrewsberry was speaking Tuesday morning in Miami at a Credit Suisse financial services conference. He was asked about revenue growth for Wells Fargo Advisors and the impact of ongoing inquiries into the bank.

“Planning is as important as it ever was and we’re putting all our resources in front of customers in a way that helps them understand where they are and where they are going — things people value and will pay for,” Mr. Shrewsberry said. “The short-term issue of where markets are, and the medium- and longer- term issue of what is the structure that is appropriate for customers and is good business and how is it staffed and how is it executed — those things are still on the table for us, and frankly, for others in the same industry.”

He added that the bank is annually referring clients with about $10 billion to Wells Fargo Advisors, which has seen a decline of more than 1,100 advisers since the banking scandals first came to light in September 2016.

A spokesperson for Wells Fargo, Shea Leordeanu, declined to comment. Instead she offered an email message from David Kowach, president of Wells Fargo Advisors.

“New clients are generally referrals from other satisfied clients,” Mr. Kowach wrote in the email. “The business today is about client well-being, not sales and products. We want to be the best place in the industry for both clients and advisers.”