Just as it has targeted senior executives from JPMorgan Chase & Co. to lead its revamped wealth management business, Wells Fargo & Co. is turning to JPMorgan to fill out the top spots in its investment banking group, which is smaller than competitors.
Earlier this week, Wells Fargo said it had tapped Fernando Rivas to be co-CEO of corporate & investment banking, reporting to CEO Charlie Scharf. Rivas joins Wells Fargo after a nearly 30-year career at JPMorgan Chase. Most recently, he was the bank's head of North American investment banking.
Investment banking and wealth management, of course, are widely different business. The former focuses on corporate mergers and acquisitions and finance while the latter targets the mass affluent marketplace, or the growing number of households in the United States with $1 million or more to invest.
But there can be significant overlap between the two. Both groups chase wealthy business owners as clients, and snaring such customers can turn into lucrative relationships, benefiting both financial advisors as wells as investment bankers at large firms like Wells Fargo. And investment bankers often move from firm to firm seeking better compensation.
“When big firms hire good people at those top levels and move strategic type executives into the firm, they get a wealth of information and experience,” said Simon Hoyle, an industry recruiter.
"It says something about these senior people from JPMorgan," said one senior industry executive who asked to speak privately. "Why are they all jumping to Wells Fargo?"
Wells Fargo is replete with old JPMorgan senior executives.
In 2020, Wells Fargo hired Barry Sommers from JPMorgan to lead its Wealth and Investment Management group, known internally as WIM. Then it hired Sol Gindi from JPMorgan as chief financial officer of WIM; two years later, Gindi was promoted to head of Wells Fargo Advisors.
Last year, Wells Fargo hired Barry Simmons from J.P. Morgan Securities to be head of national sales and has since taken over as head of the firm's Northeast division.
In February, Wells Fargo tapped Doug Braunstein, a previous finance chief at JPMorgan Chase, as its new vice chairman.
On the other side, Wells Fargo has seen a number of senior managers leave the past few years. For example, John Peluso, the head of its brokerage clearing operations, First Clearing, retired last September.
Last summer, a group of former Wells Fargo Advisors executive, led by David Kowach, a former head of the group, launched their own firm, &Partners, to compete against Wells Fargo. Kowach was CEO of Wells Fargo Advisors from 2016 to 2019, moved to leadership roles in banking, and left Wells Fargo in 2022.
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JPMorgan and RBC have also welcomed ex-UBS advisors in Texas, while Steward Partners and SpirePoint make new additions in the Sun Belt.
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The two firms violated the Advisers Act and Reg BI by making misleading statements and failing to disclose conflicts to retail and retirement plan investors, according to the regulator.
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