Scandal Toll – Four Years Later Wells Fargo Advisor Attrition Hits 20%
A few decisions by long since gone employees at one of the nations then most well run and prestigious banks has officially brought Wells Fargo to its knees.
In a painful and ongoing damage control and rebounding reboot that has lasted four years, Wells Fargo has watched its sterling name (remember, Wells Fargo used to be Warren Buffet’s favorite bank and famously didn’t need a financial crisis bailout) take multiple beatings. The ultimate fallout has made its way to wealth management.
Wells Fargo’s wealth management conglomerate stood at better than 15.1k advisors a few months before the fake account scandal made headlines. Now, the number just broke below 13k. A staggering loss of talent given the resources Wells has thrown at the problem.
It’s not an exaggeration to say that Wells Fargo has the biggest recruiting deal on the street. Larger advisors and teams can command 200% of a 350% deal upfront, when they walk in the station wagon logo’d doors at their new firm. That is a record number for wealth management recruiting, historic even.
Even as the firm has exchanged Chief Executives three times in the past four years, have the biggest deal on the street, and is willing to pay recruiters a 10% fee for their introduction services – momentum has still yet to see a net plus in advisor headcount.
It’s worth wondering how bad things would’ve gotten for their wealth division had it not extended such an eye-popping deal to the advisor public. The only reason advisor headcount isn’t -30% is because they’ve been hyper aggressive in recruiting.
At a minimum you’ve gotta give WF executives credit for acting fast and bringing a heavy cash duffel bag.
Still, at what point does the turnaround take hold and bear fruit in bolstered wealth management numbers? We don’t know.
Maybe as the saying goes, “time heals all wounds.”