The two-and-a-half-year trend of brokers and financial advisers leaving Wells Fargo Advisors accelerated in the first quarter, although the company is saying internally and externally that it is starting the year with good results in recruiting experienced advisers.
In the earning results of its parent bank, Wells Fargo & Co., Wells Fargo Advisors reported Friday morning that it had 13,828 advisers under its various broker-dealers at the end of March. That's a decline of 140 advisers, or 1%, from the end of December, and a 4% decline when compared with March 2018.
For the quarter that ended in December, the company reported a drop in its headcount of 106 advisers.
Wells Fargo Advisors has seen a steady decline of advisers since 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. A steady stream of scandals has followed. Most recently, the bank's CEO, Tim Sloan, said he was retiring and was replaced by an interim CEO, C. Allen Parker.
At September 2016, Wells Faro Advisors reported a headcount of 15,086 financial advisers, meaning it has seen a decrease of 1,258 advisers over that time, or 8.3%. The company has stressed that many of those advisers have retired and the decline in headcount is slowing down, but many of the advisers are moving to rival broker-dealers.
To combat broker and adviser attrition, the firm has rolled out a variety of changes to its platform and incentives for current advisers and prospects.
It kicked off the year by touting one of the most lucrative recruiting deals currently offered in the retail wealth management business that is worth potentially 325% of a rep's previous year's fees and commissions.
Last month, the company altered its succession plan offering by promising a bonus to advisers who stay on until retirement and giving financial help to young advisers acquiring the business of those advisers who are retiring.
Also earlier in 2019, Wells Fargo Advisors broadened its platform to allow its reps to work as distinct registered investment advisers, a move its wirehouse competitors have not yet made.
One Wells Fargo adviser, who asked not to be identified said that the recent efforts to attract advisers appeared to be paying off. The adviser said that recent internal presentations showed that the firm had a successful first quarter recruiting, and that the trend was likely to continue through June.
Shea Leordeanu, a spokesperson for Wells Fargo Advisors, declined to share details about the number of recent recruits to the firm or assets they managed with InvestmentNews. She added that the hiring of external advisers had increased by 20%, but, citing company policy, shared no other specifics.
In its earnings report, Wells Fargo & Co. reported its best first quarter in five years, according to Bloomberg News. Net income climbed 14% as the bank cut costs and revenue fell less than expected.