Wells Fargo loses more reps in Q3; total now more than 1,000 since banking scandal broke

The firm lost another 152 advisers in the quarter, and total adviser workforce is down 6.7% in past two years

Oct 12, 2018 @ 2:54 pm

By Bruce Kelly

Wells Fargo Advisors continued to lose advisers in the third quarter, pushing the total to more than 1,000 since September 2016, when the brokerage network's parent company, the giant bank Wells Fargo & Co., revealed that bank employees had secretly created millions of unauthorized accounts in the names of customers without their consent.

On Friday, Wells Fargo reported it had 14,074 financial advisers, down 152 from the number it reported at the end of the second quarter. Prior to the scandal two years ago, it had 15,086 advisers across its various business lines, which include retail wealth management, banks and independent contractors. Between then and now, the firm's adviser workforce has declined by 1,012, or 6.7%.

During a conference call with analysts to discuss company earnings Friday morning, CEO Tim Sloan said that the company was focused on financial adviser productivity and had seen improvements in loan origination and the size of advisers' books of business.

He added that there had been some impact from reputational issues at the wirehouse and that, despite headwinds, Wells Fargo Advisors was making progress.

"While the number of our cross-channel advisers decreased 1% from the second quarter, we are seeing attrition beginning to stabilize," wrote Wells Fargo Advisors spokeswoman Shea Leordeanu in an email. "In the third quarter, about a third of the net departures were retirements. Recruiting has been slower than previous years, but we had a strong September and the anticipated hiring over the next quarter is strong."

John Pierce, head of recruiting at Stifel Nicolaus & Co., said he continues to hear from Wells Fargo advisers.

"We have not seen an abatement of interest in Stifel from Wells Fargo financial advisers," said John Pierce, head of recruiting at Stifel. "The advisers are telling us three things: there is dissatisfaction in Wells Fargo from clients; they are looking for a smaller firm that reminds them of where they started in the industry; and they are tired of the corporate drama."

It is not clear how well Wells Fargo Advisors is recruiting because it does not make that information public.

The steady flow of scandals since September 2016 has damaged the firm, according to sources inside and outside Wells Fargo Advisors. In addition to opening bogus customer accounts, other wrongdoing on the part of Wells Fargo has surfaced in its mortgage and auto loan businesses.

In May, Wells Fargo launched a major branding campaign to win back customer trust. Called "Re-Established," it acknowledges that the bank lost its way, but emphasizes its commitment to "re-establish" its customer relationships.

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