https://www.advisorhub.com/wells-fargo-lands-1-2-bln-private-wealth-team-from-morgan-stanley-in-beverly-hills/
20 replies (most recent on top)
@fxm I agree that banking is different than brokerage. However.... there are some difficulties when you combine them so they are not so different.
WFA acquiring a brokerage is remarkably not tied to the asset cap. Basically a loophole. Wells acquires an asset that either grows, maintains, or loses clients. As long as people make money in investing they will use the brokerage. As long as the bank takes care of the brokerage they will stay with the bank.
The trend of financial advisors leaving banks for other firms is on the rise. Here are some examples:
Merrill Ly--h: In recent years, there's been a notable exodus of advisors from Merrill Ly--h. Articles cite reasons like [reasons for advisors leaving merrill ly--h]:
Frustration with BofA's (Bank of America's) increasing control and pressure to prioritize bank products over client needs.
Desire for more freedom and flexibility in managing client portfolios.
Increased opportunities and potentially higher payouts at independent firms or Registered Investment Advisors (RIAs).
First Republic: Another example is the recent advisor departures from First Republic [first republic advisors leaving]. After a period of successful growth, the bank's changing culture and priorities reportedly pushed some advisors to seek new opportunities.
These are just a couple of examples, but the trend is evident across the industry. Advisors are increasingly looking for more control, flexibility, and potentially a better fit with their client-centric approach.
@3jft, I agree. If a breach happens offshore that effects a high dollar WFA client the ramifications are going to be impactful. Not only will WFA lose clients but they'll lose Brokers as well. Brokers aren't going to stay somewhere were there's a big risk their clients might leave them. So WFA will lose revenue from the clients who leave because of the breach plus they'll lose revenue from all the clients who follow their Broker when the Broker leaves.
But my guess (solely my guess - I don't actually know) is that most of the Brokerage companies are doing the same thing with offshoring their back office functions. So there isn't much choice on where to go from a Broker or Client perspective, unless you go to a smaller, regional company.
@3rcw+1s5x0VAn
Agreed. One of the previous comments on here should be a concern on the brokerage and bank side...
"Banking and Brokerage are different. Much of the traditional "back office" work can be offshored hopefully without the client knowing."
When the brokerage side clients find out WF has offshored WFA operations, they will be worried about the data breaches, etc.
When the bank side customers find out WF has offshored WF operations, they will not be pleased either. Data breaches, fraud and account compromise, etc.
The "hopefully clients won't find out" business practice will haunt WF one day. It's nice to know that back office and call center employees are just an "expense" to the bank as stated in one of the previous comments. (Because they don't "make money" the bank.) Spells out WF doesn't care about chopping jobs or it's employees. It's all about lining their pockets up top, at the "real expense" of support staff that make the company tick day in and day out. I've had an account there since 1988. No big deal to WF, but I am only one of millions who are not or will not be happy with people offshored seeing my address and personal finances, etc.
I see a lot of comments about back office people in WFA being not safe from displacements or offshoring - I agree with that.
However the people that they brought on, that are mentioned in the article, are not back office people. It's a totally different thing. They are a source of revenue for the bank. Their clients are loyal to them, not to the company they work for. If they leave WFA, their clients are going to go with them to whatever new company they sign up for.
The dynamic would be different for a broker who was new and had no clients. They might have a difficult time convincing people to open an account here. Brokers who have big practices like the one mentioned in the article are not in that situation.
Who knows why they joined WFA - it could be they were offered a huge upfront payment or they wanted something that Morgan Stanley wouldn't give them or maybe they wanted their own office / different location and Morgan Stanley wouldn't agree to that. But like any relationship, how you got them is how you'll lose them. Down the road, some other brokerage firm will offer something they want and off they'll go - clients and all.
Well, Mike Mayo joined WFA -- a while back. And he is a pretty famous bank analyst. In many WFA offices you have to look closely to see that it is associated with WF. @fxm is correct.... Banking and Brokerage are different. Much of the traditional "back office" work can be offshored hopefully without the client knowing.
@xrl, Brokers aren't going to be part of a lay-off. The only way they leave a firm is a) they want to, b) their production (what they bring in) is too low, or c) they do something investing-wise that they shouldn't be doing.
They are more or less commissioned employees. (I know it's more nuanced than that, but it's close enough an explanation.) As long as they're bringing in more money than it's costing the company for their phone, desk, office, support people etc then they can stay.
And for those asking why they would join WF - If brokers have a lot of clients then they get paid HUGE amounts of upfront money to join. And most of these guys have long term clients who will follow them wherever they go. They will work with their broker because they're good and it doesn't really matter to them what company their broker works for.
Bringing in income (which their role is) is very different from a role where you're considered an expense.
What "makes sense" is not having admin buildings in any city. Lower cost, better candidate pools. Or we can keep wasting more money on less talent, that's an option to I guess.
@1jao+1s5x0VAn
Consolidate? OK then. Well I suppose the 320 let go in Richmond who didn't move to St. Louis were S.O.L. Alot of people left other jobs onsite to Brokerage and adored their brokerage jobs. They were heartbroken to be displaced. 💔
@xrl the firm figured out we did not need identical desks in both Richmond and St Louis. It made sense to consolidate them.
Congratulations to the six new recruits. May you have long and lucrative careers. Hoping the future layoffs never effects any of you. The bank side isn't the only area that lays off. This happened on the brokerage side in Richmond 3 years ago......
https://www.wric.com/business/wells-fargo-shifting-320-jobs-out-of-henrico-county/
Bank and brokerage are very different.
Brokerage accts. can thrive despite bank issues.
@nag
The asset cap does not cap any growth in WFA accounts.
Or advisor recruiting for the past 20 years.
I can’t wait to laugh when we fail to onboard their clients because of some process failure
We love to pay big to recruit advisors that leave as soon as they are legally able.
He's literally the only one. That's the problem.
Write the check, get the talent. That’s Advisor recruiting in 2024.
But all those are on the bank side and don't impact brokerage that much of at all.
$$$ upfront.
Why would anyone join a firm with an asset cap, consent decrees, and a growing union presence? That strikes me as incredibly reckless and shows poor judgment. Wells has a poor reputation so many clients are staying away. I would want to join a respected firm where my practice can thrive. I am not bringing clients to a broken firm.