Wells Fargo Advisors has slowed the bleeding of its financial advisers that began after September 2016. That's when Wells Fargo & Co. revealed a scandal in its retail banking that resulted in the company being fined $185 million for opening accounts for a few million customers without their knowledge or approval — a public relations nightmare that also alienated some of the firm's advisers.
Over the first four months of this year, InvestmentNews tracked 24 moves and departures of Wells Fargo advisers and teams in charge of more than $5.8 billion in total client assets. Over the same period in 2017, InvestmentNews tracked 37 moves by Wells Fargo advisers leaving the firm, and those advisers carried roughly $8.5 billion in assets.
It has been a rough go at Wells Fargo Advisors since September 2016. Over the eighteen months ended March 31, Wells Fargo saw a 4.5% decline in its adviser workforce, falling from 15,086 in September 2016 to 14,399 at the end of March.
Wells Fargo has not stanched the bleeding completely. On Wednesday, Kestra Private Wealth Services, the RIA subsidiary of Kestra Financial, said it had recruited a team of four Wells Fargo advisers led by Steve Battel in Paramus, N.J., who oversee $300 million in assets. Earlier this month, a team of two veteran advisers, Irving Mindes and William Fedor, and two assistants managing $566 million in assets in Tucson, Ariz., left Wells Fargo to work at Baird Private Wealth Management.
One recruiter said it looked like Wells Fargo had gotten its arms around the problem of watching valuable advisers walk out the door after the banking scandal.
"It does seem like advisers leaving has slowed down," said Louis Diamond, vice president and senior consultant at Diamond Consultants, an industry recruiter. "The initial shock of everything has faded away. The advisers who were frustrated with the way the bank handled the situation probably left already."
But Mr. Diamond said reports Wednesday by the Wall Street Journal that Wells Fargo employees improperly altered or added information on documents related to corporate customers last year and early this year remained a hurdle.
Regardless, he was optimistic that Wells Fargo Advisors would ultimately get back on track and renew its focus on recruiting in the near future.
"I expect the tide to turn there," Mr. Diamond said.
Wells Fargo has pointed to a steady number of its advisers retiring over the past couple of years — 248 in 2017 — as a significant reason for its lower head count.
"Raw head count numbers are just one factor in our broader client-focused business strategy," wrote Wells Fargo spokeswoman Kim Yurkovich in an email. "Wells Fargo Advisors has been a strong recruiting firm with low attrition for many years. We don't believe sales practices issues have had a significant impact on FA attrition."