Wells Fargo Advisors has been reporting an overall decline in financial advisers for years, but 2020 stands out: the wirehouse, whose parent bank Wells Fargo & Co. is cutting costs and restructuring under a new CEO, reported 901 fewer financial advisers last year or roughly double the amount it lost in 2019.
Wells Fargo has revised how it tallies its headcount total and this quarter began including about 800 to 900 private bankers and portfolio managers that worked at its “private wealth” unit, which includes its private bank and Abbot Downing, which is being merged into Wells Fargo Advisors.
In its earnings release Friday morning the company reported a total of 13,513 financial advisers at the end of December, a decrease of 6.25% compared to the end of 2019.
The two sharp annual declines in brokers and advisers at Wells Fargo is not an exact apples-to-apples comparison because the company has changed its reporting. But it does give an indication of how deep the structural changes are under CEO Charlie Scharf, who took over as CEO a year ago.
Financial advisers are usually off-limits when it comes to large institutions looking to cut costs and personnel. But Wells Fargo, under Scharf, has not shied away from laying off advisers or cutting adviser-led businesses.
In October, Wells Fargo said it had cut a “sizable group” of advisers as it reported slumping profits. Those advisers, however, were not core wealth management advisers but rather lower-producing, salaried advisers. This year the company also said it was pulling out of the international wealth management business.
It’s clear that Wells Fargo Advisors is trying to focus on the most profitable wirehouse advisers, who produce large amounts of total annual revenue in the neighborhood of $1 million.
“We continue to see retirements, which have increased due to our successful Summit succession program, ensuring that clients remain with us after an advisor retires,” wrote spokesperson Shea Leordeanu in an email. “And we see other advisors leaving the industry. As is typical in the fourth quarter, retirements increased quarter over quarter as expected.”
Meanwhile, total client assets at Wells Fargo’s Wealth and Investment Management group, which includes its advisers, increased 6% to a record $2 trillion primarily driven by higher market valuations, the company reported.
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