Wells Fargo & Co.'s wealth and investment management group on Tuesday morning reported a year-over-year 4% decline in client assets to $1.8 trillion; meanwhile, Wells Fargo Advisors also saw a 4% decline in the number of financial advisers, totaling 13,298 at the end of June compared to 13,799 a year earlier.
The decline in assets was primarily due to net outflows in the firm's correspondent clearing business, according to a supplement report to the bank's second-quarter earnings report. Wells Fargo clears trades for dozens of other broker-dealers, known as "correspondents" in the industry.
A spokesperson for Wells Fargo Advisors said the firm was focused on its plan to focus on teams and recruit advisers that produce more each year in fees and commissions. The firm has been reporting a steady loss of advisers since it reported a banking scandal in 2016.
"Our strategy is to focus on a highly productive team of advisers, and to manage out under performers," Wells Fargo spokesperson Desari Mueller wrote in an email. "We anticipate that the number of advisers will continue to decline as we continue this strategy over the next couple years. The overall headcount number is not a strong predictor of revenue growth.”
Meanwhile, Wells Fargo & Co., the bank parent of Wells Fargo Advisors, reported a net loss of $2.4 billion for the second quarter, and the bank's view of the length and severity of the current economic downturn in the wake of COVID-19 has deteriorated considerably from previous assumptions, the company said in a statement.
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