More than two years after scandals engulfed its parent bank, Wells Fargo Advisors continues to see advisers walk out the door.
On Tuesday morning during its earnings report, Wells Fargo reported it had 13,968 financial advisers across its various channels at the end of December. That's a decline in headcount of 106 for the quarter and 576, or 4%, for the year.
According to information tallied by InvestmentNews, Wells Fargo Advisors lost 30 individuals or teams in the fourth quarter, which represented $8.7 billion in assets under management.
Of those 30, eight individuals or teams moved to Raymond James Financial Inc., six went to Stifel Financial and four to Ameriprise Financial Inc.
Wells Fargo's problems started in September 2016 with the news that Wells Fargo bank employees had secretly created millions of unauthorized accounts in the names of customers without their consent. The bank was fined $185 million and then-CEO John Stumpf resigned abruptly.
At the time, the headcount at Wells Fargo Advisors was 15,086; based on the number of advisers reported Tuesday, Wells Fargo Advisors has seen a decline of 1,118 advisers over that time, a drop in its sales force of 7.4% in 27 months.
The decrease of 106 advisers at the firm is the lowest quarterly decline for 2018. However, it is greater than the fluctuations in the second half of 2017, when the firm actually increased its number of advisers by 37 in the third quarter of that year and lost only 20 in the fourth quarter.
"Total financial adviser attrition in the fourth quarter slowed to its lowest level of the year, to 0.75% from the previous quarter," noted Wells Fargo Advisors spokesperson Kim Yurkovich in an email. "Year-over-year headcount is off 4%, or less 576, with peak attrition in August."
"The average productivity of the advisers who left this year was only about half that of our current average adviser," she added. "The average production of the advisers we hired in the fourth quarter was the highest it has been in two years," Ms. Yurkovich said, declining to comment on specific recruiting figures.
One recruiter who moves advisers from Wells Fargo to competitors said that the interest among advisers to leave the firm has not fully abated.
"From the recruiters' standpoint, the sell-cycle is much shorter with Wells Fargo advisers than what it used to be," said Casey Knight, executive vice president, managing director at ESP Financial Search, a recruiting firm. "It typically takes nine months to move an adviser from a wirehouse; that's been cut to six months or three months or sometimes less than that with current Wells Fargo people. Advisers are saying that some of their key clients, a handful, are coming to them and asking if they are thinking about making a move."
Total revenue of slightly less than $4 billion at the Wealth and Investment Management group, which includes Wells Fargo Advisors, represented a decline of $376 million, or 9%, in the fourth quarter compared with a year ago, according to the company's earnings release.
That was primarily driven by lower deferred compensation plan investment results, asset-based fees, brokerage transaction revenue, and net interest income, according to the company.