Wells Fargo shakes up wealth management

Wells Fargo & Co. has cut the number of regional managers — and operating regions — 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 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,” Mr. Scanlon wrote. The managers who remain in place are Greg Bronstein (Southeast), Joe DeFur (California and Hawaii), John Dowd (Northeast), John Duchala (Southwest), Jeff Grubb (Mountain Northwest), Jeff Hartman (Carolinas) and Tim Traudt (Great Lakes). The five regional managers displaced in the restructuring are seeking positions within and outside the company, Mr. Scanlon said. As was the case at Bank of America Merrill Lynch, Wells Fargo's wealth management division has recovered from the financial crisis faster than its other units, notably commercial and consumer lending. First-quarter revenue at Wells Fargo dropped by 5%, compared with the year-earlier quarter, while revenue in the wealth management division rose by 8%. As with Bank of America Corp.'s relationship with Merrill Lynch, a central part of Wells Fargo's business strategy is to cross-sell banking and brokerage services to Wachovia clients. During Wells Fargo's first-quarter conference call last month, chief executive John Stumpf said that the bank had experienced a “record cross-sell” in the quarter, with its advisers selling an average 9.82 products per customer, compared with 9.67 products a year earlier. He 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 that the bank plans to complete the conversion by the end of the year. E-mail Andrew Osterland at [email protected].