After several years of watching financial advisers jump ship to other firms in the wake of scandals, Wells Fargo & Co. is now resorting to laying off reps and advisers as the giant bank works to reduce expenses.
Wells Fargo has reportedly begun cutting hundreds of jobs at the bank to cut costs during the COVID-19 pandemic and a slump in profits, but laying off financial advisers is clearly a rarity in the wealth management industry, as those employees are key to generating revenues.
In its earnings report released Wednesday morning, the bank reported a year-over-year decline of 815 advisers, a drop of 5.9%. Wells Fargo Advisors now has 12,908 advisers.
"While this change represents retirements and some natural adviser attrition, it also includes the displacement of a sizable group of salary and bonus advisers as a result of the company’s work to become as efficient as we can," wrote spokesperson Shea Leordeanu in an email. Displacements is industry shorthand for layoffs.
Compared to the second quarter, Wells Fargo reported 390 fewer advisers at the end of September.
One Wells Fargo adviser, who asked not to be named, said the sharp drop was due to job cuts that hit a group called Financial Relationship Advisors particularly hard. Those advisers are paid a salary and bonus rather than from the grid, which is a formula that compensates financial advisers based on a percentage of total sales.
The Financial Relationship Advisors at Wells Fargo is a group of advisers who get accounts from veterans who had been incentivized to hand them accounts, according to the adviser.
"They just let a bunch go this past quarter to bring down expenses," the adviser said.
From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.
Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.
“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.
Sellers shift focus: It's not about succession anymore.
Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.
