It probably would have been easier just to ask John Peluso what he hasn’t done during his tenure at Wells Fargo.
The president of Wells Fargo Advisors Financial Network began his career in the financial services industry in 1988 at Wheat First Securities (now Wells Fargo Advisors). After three years in the operations group, he moved to the clearing business to lead marketing and product development. He then spent time as the western wholesaler for new broker-dealer business development for First Clearing Corp.
Prior to his latest gig with the firm, he was the managing director for Wells Fargo Advisors’ Private Client Group, in charge of business development for retail brokerage recruiting.
He knows Wells Fargo, and he knows the various distribution channels, which makes him especially qualified to lead the firm’s independent channel—that’s right, a bank with an independent channel.
“The model came from a desire to attract and retain the best financial advisors in the country,” Peluso says, when asked about the network’s genesis. “When we started it 11 years ago, we evaluated industry trends and it was obvious to us that the ‘best’ often didn’t want to work in a company-owned shop. They wanted to be able to choose how to affiliate. I call it having a car in every lane, because you never know what lane will move fastest or furthest.”
What differentiates the model and the network, Peluso says, is the unique intersection it occupies in the industry.
“Our advisors have all of the resources that Wells Fargo offers behind them,” he explains. “They’re able to marry that with the ability to own and operate their own business. No one else occupies that space; it’s something completely different.”
Do the straight wirehouse reps the firm employs view the independent channel with suspicion?
“The franchise wins when we compete for the best available advisors,” Peluso answers, before adding “but the advisors self-select the channel that is most appropriate for them. And any competition is really driven by the advisors themselves rather than among our business units.”
Last year (2011) was a particularly good year for Wells Fargo Advisors Financial Network, one filled with milestones. The network reached 500 individual businesses and 1,000 advisors with which it affiliates (1,100 advisors today). It also reached $50 billion in assets under management and $500 million in revenue.
So given the much-ballyhooed wirehouse exodus, does the model serve as a retention strategy for Wells Fargo reps looking for independence?
“The majority of the advisors that join us come from Merrill Lynch, UBS, Morgan Stanley Smith Barney or Edward Jones,” he says. “We have what we call a channel-switching protocol for them to follow to determine whether or not the independent track is right for them, but only about 13% of our advisors come from that source.”
“While not all financial advisors are making their move to independence,” Peluso recently wrote, “the high-quality ones are certainly exploring it. And with FiNet’s reputation and culture, who could blame them? FiNet’s mission hasn’t changed: We simplify independence for successful advisors through partnerships to create an extraordinary business, life and legacy. That is why financial advisors choose us.”
Find out who was named on the 2012 IA 25 in Investment Advisor's May issue.
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