Wells Fargo dramatically rejiggered its regional management set-up — with five execs losing their positions. According to a bank spokesman, the move is intended to help Wells 'realize the efficiencies of the merger with Wachovia.' One of those efficiencies: Cross-selling to Wachovia clients.
Wells Fargo & Co. has cut the number of regional managers — and regions covered — in its wealth management division to better integrate the investment advisory business it inherited from Wachovia Corp.
At the end of 2008, Wells Fargo acquired Wachovia, which was facing potential bankruptcy at the time.
"Wells Fargo Wealth Management has recently made a number of changes to its internal structure in order to streamline its operations and position the organization to more effectively meet the needs of its clients,” Vince Scanlon, a spokesman for the wealth management division, wrote in an e-mail.
“This new organizational structure, which takes us from 12 to seven regions, will allow us to realize the efficiencies of the merger with Wachovia and enable us to focus more resources closer to our clients as we continue to execute our core business model. Our new structure will not cause any changes to our client relationships.”
The managers who remain in place are John Dowd (Northeast), John Duchala (Southwest), Jeff Hartman (Carolinas), Greg Bronstein (Southeast), Joe DeFur (California and Hawaii), Jeff Grubb (Mountain Northwest), and Tim Traudt (Great Lakes).
The five regional managers displaced in the restructuring are looking for positions both within and outside the company, said Mr. Scanlon.
As was the case with Bank of America Merrill Lynch, the wealth management division of Wells Fargo has recovered from the financial crisis far faster than the rest of its business — notably commercial and consumer lending.
First-quarter revenues at Wells Fargo dropped by 5%, compared with the same quarter last year, while revenue in the wealth management division rose by 8%.
Also like Bank of America Corp.'s relationship with Merrill, a central part of Wells Fargo's business strategy is to cross-sell banking and brokerage services to clients of Wachovia.
In Wells Fargo's first-quarter conference call last month, chief executive John Stumpf said the bank had experienced a “record cross-sell” in the quarter, with Wells advisers selling an average of 9.82 products per customer compared to 9.67 products in the year-earlier quarter.
Mr. Stumpf also has been quoted as saying that the bank's wealth management operations were “suboptimized,” prompting suggestions in the analyst community that the bank was looking for another acquisition in the space.
The changes in the wealth management division come as the bank is converting Wachovia bank branches to the Wells Fargo name. Mr. Stumpf has said the bank plans to complete the conversion by the end of the year.
