Wells Fargo RIA channel partners with TradePMR

TradePMR brings technology and services to an RIA platform looking for traction

Jan 29, 2019 @ 2:10 pm

By Jeff Benjamin

Wells Fargo Advisors is souping up it's new channel for registered investment advisers by leveraging the technology expertise of second-tier custodian TradePMR.

Wells Fargo's fledgling RIA business model became official earlier this month when veteran Philadelphia-based broker Carl Schultz left Wells' private client group to become the first to sign up as an RIA affiliate as Forefront Wealth Management.

Wells Fargo's RIA channel is marketed as completing the full spectrum of advice models, from wirehouse-based employees to independent representatives working through FiNet to independent advisers.

"Virtually any way an adviser can provide advice to a client," said John Peluso, head of First Clearing, the Wells Fargo subsidiary offering the RIA custody services.

"Adding specific fee-only adviser services is a natural evolution for us," he added.

Under the new program, TradePMR, which has more than 700 RIA custodial relationships, will launch a dedicated service team to aid advisers making the transition.

Advisers in the program will have access both to TradePMR's adviser technology and to the Wells Fargo Advisors desktop technology, contact management systems and the Envision planning process.

"Considering that they already had an IBD arm, it makes sense to have an RIA channel, and in the short term it seems like a way to keep those already in-house to stay in-house," said industry recruiter Danny Sarch.

But the ultimate appeal and success of the RIA channel could depend on whether advisers will look beyond Wells Fargo's current tainted reputation in the financial services industry.

Since 2016, Wells Fargo has been struggling to manage the black eye it suffered starting when 5,300 employees were fired for creating more than 2 million phony bank accounts for consumers.

Even as the company has sought to repair its reputation through advertising and public relations campaigns, the pace of broker departures continues.

In the fourth quarter of last year, Wells Fargo reported it had 13,968 advisers across its various channels. That total reflects a decline in headcount of 106 for the fourth quarter and 576, or 4%, for the year. Since 2016, Wells Fargo has lost 1,118 advisers, a drop in headcount of 7.4% in 27 months.

"The RIA channel is a bold move considering the challenges they've had, reputationally," said Mr. Sarch. "There's no way of knowing if the RIA offering will be enough to attract other RIAs. So far, they've had one guy go there. So, it's a trial of one."

"Because of their issues, everything has stalled for them," said Mr. Sarch. "They are also aggressively recruiting, but considering their publicity it is difficult to imagine saying to a client that Wells is better for you."

Mr. Sarch added that the RIA channel "strikes me as a bit of desperation, even as I admire their chutzpah for trying."

Mr. Peluso sees it differently.

He said there are currently "no targets or goals" related to building out the RIA channel, but confirmed, "There will be more (RIAs) to follow, that's for sure.

"We'll be open for business, recruiting advisers every day to one of our channel options," he added. "Some of those practices will come from Wells Fargo Advisors, but our intent is to recruit and grow our business by capturing advisers that are in motion.

"We're open for business; we have over 600 hiring managers across the country," he said. "We have an opportunity for everyone at Wells Fargo. The needs of clients shift, and we're also keenly aware the needs of advisers are shifting."

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