Wells Fargo Advisors signs up more than 1,000 advisers for new succession plan

After Wells Fargo Advisors watched a steady stream of brokers and advisers leave in the wake of corporate banking scandals, executives at the wirehouse said this week that more than 1,000 advisers have signed up for a new succession plan that ties them more closely to the firm. Introduced earlier this year and dubbed the Summit Program, the plan offers a bonus to advisers who stay on until retirement and also gives financial help to young advisers acquiring the business of those advisers who are retiring. [Recommended video:​ 6 reasons advisers should learn about ESG and impact investing] "I think they got it right on this one," said one Wells Fargo adviser, who asked not to be named. "It solves many issues. It facilitates the older advisers to set up a transition plan, and locks the acquiring advisers to the firm, long-term." "I heard it's been so successful that there is a six-month backlog to process the deals," the adviser added. Under the new program, Wells Fargo reps and advisers who are eligible and retiring can receive an additional deferred bonus of 25% of the adviser's prior year's fees and commissions, known as the "trailing 12" in brokerage industry parlance. That means a retiring adviser, who under the existing succesion plan could have received up to 200% of his trailing 12, now could receive a total valuation of 225% of his annual fees and commissions. The new bonus has a five-year vesting period. In September 2016, Wells Fargo & Co. reported that 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. Other bank-related scandals followed. Partly as a result, Wells has seen a net decrease of more than 1,300 brokers and advisers through the end of the third quarter. Wells Fargo Advisors now has about 13,700 advisers across its various business channels. "The Summit Program has had really good adoption by the advisers, with over 1,000 advisers" signing up for the plan, said Rich Getzoff, head of Wells' adviser-led business, in an interview. "We're giving a path to loyal financial advisers for their retirement," he said. Meanwhile, Wells Fargo Advisors on Thursday rolled out its 2020 compensation plan. According to a presentation, the plan is similar to last year's and keeps in place many of the same hurdles for its wealth management advisers. The 2020 compensation plan offers incentives to advisers that work in Wells Fargo bank branches, now called Consumer Bank Advisors, particularly to those who bring in new clients without using the bank for a referral.