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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.