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Portfolio > Alternative Investments > Private Equity

Wachovia Tells its FAs: Go Independent with Us

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With the wind in its sails, Wachovia is putting the 6,000 advisors in its Private Client Group on notice: You don’t have to jump ship in order to set your own course. In fact, it’s set up new procedures to give FAs the information and support they need to make the move from the Private Client Group over to its independent channel, the Wachovia Securities Financial Network or FiNet.

“The decision recognizes that we’re a firm built around choice and want our financial advisors to have multiple affiliation options that best suit their practices,” explains Jim Hays, head of Wachovia’s Private Client Group.

Industry analysts like Chip Roame, head of Tiburon Strate- gic Advisors in Tiburon, Calif., think the decision is a good one. “This is pretty big,” Roame says. “They really get it, and you have to give them credit.”

What Wachovia “gets,” according to Roame, is building a more advisor-centric business model at a time when the ranks of independent FAs nationwide continue to grow. “The firm recognizes that the advisor has all the power, and it wants them to work with Wachovia.”

“If you want good brokers to work with you, you must give them options,” Roame says. By giving them options — as Raymond James has done for several years — brokerages keep advisors happy, he says. That keeps reps’ high-net-worth clients happy.

For Wachovia, growth is the name of the game. “Last year, 740 advisors joined us in one channel,” says Hays, referring to the Private Client Group. “That’s a Wall Street record.”

Hays says recruiting across Wachovia’s channels continues to be robust this year. “It is up significantly through May,” he explains, “in the high double-digits year over year.” Wachovia hosted a meeting in San Diego in June, for instance, that drew 120 potential recruits. Also in June, four Piper Jaffray advisors moved to Wachovia in Bloomington, Minn., rather than become part of UBS. And in July, a $1.7 million Piper producer in Boise, Idaho, signed on.

“We’re very pleased with the people coming in,” says Hays.

He cites Wachovia’s platform, as well as its national scale and regional culture as important contributing factors. But the latest momentum also seems to be building on itself.

“The brand is very fresh and growing,” says Hays, “and people are attracted to the promise of the brand.”

In the past few years, private-client advisors could make the switch to FiNet on an ad hoc basis, according to Hays. Now, though, this process is being “vetted and communicated thoroughly and consistently.”

FiNet grew by 100 advisors in the past 12 months, excluding reps coming in from Wachovia’s Private Client Group. And it should continue to expand by 100-150 reps annually for the next few years says Kent Christian, head of the firm’s Independent Brokerage Group, which includes FiNet.

In terms of channel switching, he expects some 20 to 40 Wachovia PCG advisors to make the jump to independence in the coming year, though more may inquire about it. “The number shouldn’t be dramatic, but it’s having the ability to consider the move that is important,” says Christian.


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