A Dynamic Recruiting Conversation: “Should we even consider Wells Fargo?”

In a lengthy discussion with a team that seems determined to leave JP Morgan Securities, multiple points of the recruiting and due diligence process were uncovered. Given the depth of the conversation, the highlights seemed to be noteworthy and of value to the wealth management discussion.

With assets under management and revenues at all-time highs across the industry, recruiting is white-hot. Deal percentages are at the highs, while hurdles inside deals are near all-time lows. It is a seller’s market in every way.


You happen to be tethered to a Wells Fargo logo. The conversation is much different given the missteps that have come from that firm in the past 24 months. Whether it be fraudulent account openings or a newly minted CEO making racially insensitive remarks, Wells Fargo has stumbled its way to where it currently resides – a recruiting afterthought.

Here is how that conversation went last week:

“Should we even look at Wells Fargo? I’ve heard their deal is big, but will the fog ever lift from that place? Leaving JPM and the brand itself is really our only challenge with client transition – I can’t imagine the extra weight explaining a move to Wells Fargo would entail.”

“Are serious teams really going there or is it just straight-up money grab? It feels like anyone that goes there is striking a massive almost off-book deal. That’s just our perception. Merrill Lynch is probably a more interesting name than Wells at this point.”

Oof. Merrill (a division of Bank of America) is more interesting right now. If there was ever more painful wealth management recruiting take we’ve yet to hear it.

But that is where Wells Fargo finds itself. The biggest deal on the street, paying recruiters up to 10% deal fees, and adjusting deals for teams in any way possible to lure them into the fold.

As the saying goes, “desperate times call for desperate measures.”

Wells Fargo Rebirth? Even Offering The Largest Recruiting Deal On The Street Isn’t Working

Its well understood that wealth management recruiting is white-hot. White. Hot. It’s a seller’s market as even middling advisors and teams are in a position of strength, commanding premiums on stated deals in the wirehouse space.

So what to make of Wells Fargo’s position? It’s simple really, no matter what they’ve tried (apologies, congressional appearances, new CEO, and executive leadership) the narrative is largely negative. Advisors have nearly zero interest in Wells Fargo as a destination. That’s not an exaggeration, it’s an ‘on the ground’ fact.

Advisors’ current view of the firm is a fallback at best, and a ‘no chance I’d consider them’ at worst.

A year ago it looked like Wells Fargo may have been turning the corner, and then… the newly minted CEO made a boneheaded comment about diversity on a conference call. In today’s corporate environment, that was an epic mistake. Any momentum that may have been building died right there.

Wells has been attempting to employ the ‘money talks and bullshit walks’ approach to recruiting, effectively offering the largest deal on the street. It hasn’t mattered.

Will Wells Fargo eventually make it back to being a meaningful player in the wealth management recruiting landscape? Maybe, but it’s far from certain.

UBS Destroying Recruiting Rivals

NEW RECORD: UBS Destroying Recruiting Rivals; Adds More Than $30B In Net New Assets Through April

UBS has taken over the high-end wealth management recruiting market and is showing no signs of letting up. Through the first four months of 2021, ending in April, UBS has added more than $30B in client assets to the firm’s US wealth management operations. Everyone else is scrambling to figure out why and attempting to play catch up.

Somewhere, deep in the bunker that is the UBS recruiting department in Weehawken, NJ, a decision was made nearly a year ago to make two strategic pivots: value private bankers in the same way they value traditional advisors and remove all the hurdles from their traditional rivals deal. An explosion occurred.

Here is a short (but nowhere near all-inclusive) list of the biggest moves to UBS through 2021:

  1. J. P. Morgan Private Bank, Dallas $10B
  2. J. P. Morgan Private Bank, Los Angeles $6.5B
  3. J. P. Morgan Private Bank, Miami $5B
  4. J. P. Morgan Private Bank, Atlanta $9B
  5. Wells Fargo Private Bank, San Diego $2B
  6. BofA Private Bank, San Francisco $2B**a little math above, that’s already more than $30B. Wow.

This recruiting run is unprecedented. Historic. Never been done before. Ever. $30B in four months? There has never been a firm that has approached that number in 6 months across the history of wealth management recruiting.

For comparison’s sake, Rockefeller is currently having a banner year in recruiting with $10B in recruited AUM. So fully an entire 2/3 behind UBS. And if recruiting chatter is any indication, expect UBS’ success to continue.

As we’ve discussed in previous articles the keys to this surge have been the aggressive move into private banking and the removal of all hurdles for teams at firms like Merrill and Morgan Stanley. Other traditional rivals like Wells Fargo and Rockefeller continue to pitch asset/revenue matrix models with hurdles year over year. Effectively, UBS’ has brought a fully guaranteed deal to market.

The response?? The numbers don’t lie – it’s historic.

UBS Lands ‘Couture’ Team In Miami – Female Led WF Private Bank Group Adds $14M In Annual Revenue

UBS continues to dive deep into the private banking space to grab huge teams with massive assets and massive revenue streams. The private banking teams are also loaded with UHNW assets attached to groupings of households, family offices, and institutional accounts. The strategy is running on ‘full blast’ at the moment with another announcement just yesterday.

The announcement yesterday focused on a group that joined the Private Wealth division of UBS in Miami, and includes Doris Neyra and Melissa Van Putten-Henderson as well as highly regarded CSA Gina Jamurath. They had been generating $14 million a year in annual revenue, and we were passed a note that their assets are a smidge above $2.5B.

Those numbers have been consistent with the private banking ‘big game’ hunting that UBS has been focused on for the better part of 6-9 months at firms like JP Morgan, Goldman Sachs, Bank of America, and Citi. This particular move out of Wells Fargo’s private banking operation is the first of its kind, and you can bet will widen the eyes of recruiters across the country.

Wells Fargo has struggled with advisor retention based on the client account opening scandal in their traditional wealth management channels. Their private banking ranks have been largely untouched… now, all bets are off. Expect more of these announcements to make their way to competitor firms over the second half of this year.

As per the private wealth division at UBS – its ranks continue to bulge as each of these types of private banking teams are slotted into that ’tier’ of the UBS ecosystem here in the US. It is quite obvious that UBS is making a bet on a calculated and aggressive lunge upmarket. Across the globe UBS remains the largest wealth manager amongst its peers. A few global investment banks may have larger market caps and other divisions that denote larger overall banking scale; but UBS is solely focused on asset management. In that category they lead and are having enormous success selling that set of facts.

This isn’t a blip on the radar for UBS and private banking hires, rather its a movement. Expect these announcement to increase in frequency and increase in size. Whispers abound that even larger teams are on their way to UBS (potentially 2-3x the size of this team in Miami), and the private banks they’ve been exiting from have yet to figure it out.

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.”

Big Checkbook! Wells Fargo Outbids Rivals For $5.3M Merrill Lynch Team

If you want the biggest recruiting check, mows the time to hitch your wagon to Wells Fargo (see what we did there). The firm remains the most aggressive recruiter in the wealth management universe and it probably isn’t close.

Their stated deal (meaning, if you are a viable candidate or team from ML, MS, or UBS) is 340%. That’s is where the bidding begins. We’ve seen deals reach 375% with upfront checks tipping the scales at a cool 200%. Cha fucking ching!!

This past week a large team in TN migrated from (yes, you guessed it) Merrill Lynch and hit the bid in a big way. As we hear it, the upfront approached 200% and the total deal surpassed 360%. Take a look at their team profile and then let’s run the numbers…

Wells Fargo hired a team that included Will David Coleman, Jeremy Stephens, Justin Webb, and Steven Ragan. The group was annualizing revenue at $5.3 million a year. Based in a Merrill branch in the suburbs of Nashville, TN the group manages over $680 million in client assets.

Now for a little math. $5.3M in annualized revenue at 200% is $10.6M when they walk into the doors of their new Wells Fargo offices. In total their deal could go beyond $19M all in. Not bad for a group of guys that effectively started their careers 10-15 years ago. Like we said, cha-ching!

The financial metrics associated with Wells’ recruiting strategy are fairly simple: roll out deals that are nearly impossible to turn down and outbid the competition by 30-40%.

In spurts, being the biggest deal on the street is working.

Wells Fargo Effectively Shutters Its International Wealth Management Division; UBS And Morgan Stanley Rush To Scoop Up Displaced Teams

Three weeks ago we received word that Wells Fargo WMA was set to make drastic changes to its International Wealth business line. And by drastic changes, we actually mean shut it down.

And that’s exactly the action they took.

Now, it wasn’t as abrupt as other firms that have executed the move in the past several years, but advisors that manage a portion of their book outside the US were sent scrambling.

As we hear it, Wells Fargo advisors are being asked to request clients to either go elsewhere or being encouraged to take their book altogether somewhere else. The kind of abrupt and career shaking move that Wells hadn’t signaled in any way until announcing it internally a couple of weeks ago.

A few points we find interesting in regards to the new policy:
1. If an advisor or team has more than 40% of their book in international business they are being asked to leave the firm.
2. Remaining balances on previous recruiting deals are being waived to facilitate exits from Wells Fargo.
3. Wells Fargo is even allowing exiting advisors to take their deferred comp balances with them.
4. UBS and Morgan Stanley are offering deals that stretch beyond 500% of current annual production and are being aggressive in their pursuit of the right teams.

So what now? Wells Fargo teams have been doing their due diligence at UBS and Morgan Stanley – two firms where you can still meaningfully manage international accounts. Some smaller banks and boutique firms are also in the mix but don’t generally offer recruiting deals. UBS is being understandably aggressive given its global wealth management brand.

We doubt that any litigation will find its way into this move by Wells Fargo. By facilitating moves via deal forgiveness and deferred comp awards, Wells Fargo should avoid the kind of mistakes that landed Credit Suisse in hot water when they shuttered their WMA operations. As with other moves in wealth management over the past six to seven years, time will ultimately tell.

Meanwhile, in the recruiting world, it’s ‘game on’ for Wells Fargo International teams.

Wells Fargo Adds Big UBS Producer In SF; Wells PWM Continues Current Momentum

A couple of narratives continue to plant flags in the current wealth management environment. UBS keeps losing advisors of note and Wells Fargo remains aggressive in pursuing and winning them. In spite of UBS’ protocol exit and efforts to retain legacy advisors, there seems to be too much overhang from missteps early in 2020 that are convincing advisors to seek greener pastures.

More of that happened today in San Francisco, CA as Craig Issacson moved to Wells Fargo in the city. Weighing in at just north of $1M in annual production and better than $120M in client assets, Wells Fargo won the prize as it competed with other firms of note in its category.

The Gershman Group CEO, Roger Gershman commented briefly on today’s move, “The Wells Fargo PWM opportunity is significant and lucrative. It continues to resonate with advisors up and down the spectrum. They are appropriately aggressive for the right advisor and team.”

As Wells Fargo remains aggressive in the recruiting space advisors continue to get more and more comfortable with the executive changes that have been made this year, as well as the depth and breadth of the offerings at the bank itself. Juxtaposed against the likes of UBS, Wells offers several pathways for advisors and the opportunity to move in and around their ecosystem.

As an example, at a minimum Mr. Issacson inked a deal worth 300% of his current annual production, while also having the opportunity to add another +200% should he decide to sunset his business within the Wells Fargo system. Or…he can choose to go independent within Wells’ framework should he choose to do so at the end of his current deal. Having options on top of a sizable stack of recruiting cash resonates.

Proof of that narrative is found in Mr. Issacson’s move today.


Questions Abound over Santomassimo hire at Wells Fargo

The much-beleaguered Wells Fargo announced a new hire this morning. Mike Santomassimo,
formerly of BNY Mellon, will be taking over the role of CFO, replacing John Shrewsbury, who is
retiring in September. Santomassimo will report directly to CEO Charlie Scharf.

Wells Fargo stock (WFC), down 54% year-to-date, immediately jumped 5.61% in early morning
trading after the news broke. The Aroon indicator is still down trending.

Is this the final piece of the restructuring that was announced back in February or a new
beginning? Santomassimo brings twenty years of experience to the position. That includes four
years at BNY Mellon and eleven years in financial leadership roles at JP Morgan.

CEO Charlie Scharf, just nine months into his role at Wells Fargo, describes his new hire as “a
strategic-minded CFO with success in building and leading global finance teams that help drive
business improvement.” That statement suggests additional changes are coming.

Scharf Shifts Wells Fargo Power Balance to East Coast

In an attempt to reverse a downward spiral caused by the 2016 fake accounts scandal,
organizational restructuring was announced by Wells Fargo earlier this year on February 11th. It
was essentially a personnel shuffle, with various CEOs moving to new positions.

The only new executive hire during the restructuring was Mike Weinbach, former CEO of Chase
Home Lending at JP Morgan Chase. He is now CEO of Consumer Lending at Wells Fargo.

Prior to the restructuring, Charlie Scharf had hired mainly outsiders to separate the bank from
its previous history. On June 18th, he reached outside again and brought in Barry Sommers,
formerly of JP Morgan Chase, to be the CEO of Wealth & Investment Management.

Scharf is a former CEO of BNY Mellon and former CEO of Retail Financial Services at JP Morgan
Chase, so the sources for his new hires are not surprising. The Santomassimo move positions the top three Wells Fargo executives in New York. The company is based in San Francisco.

Consolidation Rumors Continue to Surface

A rumor surfaced in May that Wells Fargo might be contemplating a merger with New York-
based banking giant Goldman Sachs. With a fed-imposed asset cap of $2 trillion still hovering
over their heads, the deal is unlikely to happen, but the rumors are starting to resurface.

Wells Fargo owns more than 10% of all bank deposits in the United States. Goldman Sachs
could add $1.1 trillion to its balance sheet. With both banks tanking in the stock market, it
might be a survival move that’s being seriously looked at.

Goldman’s CFO, Stephen Scherr, has openly stated that the bank would be open to acquisitions
if they can boost their current projects. JP Morgan, where Wells Fargo’s new executive team
originally hails from, has always believed that partnerships can improve customer service.

Assuming that federal regulations are eased after the Coronavirus crisis, is the Santomassimo
hire at Wells Fargo the final move before making a consolidation deal? Or is the beginning of a
new chapter for the struggling bank? Pay close attention to how this plays out.