Drop in advisers at Wells Fargo continues but slows
While the company hasn't staunched the bleeding of its financial advisers completely, the three months ending in December saw the rate of decline slow a bit, while the average revenue per adviser continued to increase.
Wells Fargo & Co. again reported a drop in its overall head count of financial advisers Friday as part of its fourth-quarter results, but the rate of decline is less than the previous quarter’s and the average revenue per adviser continued to increase.
At the end of December, Wells Fargo Advisors reported 12,367 financial advisers, a drop of almost 1.5% when compared to the previous quarter and down close to 8.5% compared to the end of December 2020.
While the company hasn’t staunched the bleeding of its financial advisers completely, the three months ending in December saw the rate at which its adviser head count declined slow a bit.
For example, at the end of September, the firm reported 12,552 financial advisers under its roof. That was a quarter-over-quarter head count decline of 267, or 2.1%, and an annual decline of 1,241, or 9%.
Annualized revenue per adviser, a widely used industry metric, increased 15.8% in 2021, reaching $1.17 million at the end of last month, compared to $1.01 million a year earlier.
Wells Fargo hit its recent peak in total financial advisers in September 2016, when it reported more than 15,000 across its varied business lines. That was right when the problems started for the bank as it was revealed 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. Other bank issues and problems then came to light. Since then, Wells Fargo executives have blamed the adviser attrition on a variety of reasons, from retirement to consolidating business lines.
“Adviser productivity continues to rise, attrition is slowing, and recruiting momentum is building,” a company spokesperson wrote in an email. “At Wells Fargo we feel positive about recruiting heading into 2022 and are excited about our compensation plans.”
When it rolled out its 2022 compensation plan to financial advisers last month, executives at the firm hoped it would be regarded as simpler and potentially more lucrative than pay plans in the past.
For example, the firm reduced the number of compensation hurdles its private client group advisers will face each month from three to one. Wells Fargo Advisors is also dangling an additional $5,000 in deferred compensation for advisers who qualify.
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