Wells Fargo says it has moved to resolve an issue affecting as many as 11,000 financial advisors that joined Wells Fargo Advisors after the bank acquired Wachovia Securities.
Beginning in January 2010, some 11,000 legacy Wachovia advisors automatically had 25% of their commissions withheld for taxes, regardless of their tax bracket, according to a Dow Jones story on Tuesday, August 31.
In August, though, these employee advisors were able to opt in to a new tax-withholding system that lets them set a withholding level more in line with their tax bracket, Dow Jones reported.
In the first of two monthly installments, advisors’ pay will include 45% of their average monthly payout from the past three months, while the second will include the rest of that month’s payout.
A spokeswoman for Wells Fargo Advisors says this “solution was well received with over 30% [of advisors] opting in for the balance of 2010, and the rest will have the opportunity to enroll for 2011.”
For advisors who had lower-than-expected pay because of this arrangement, Wells Fargo has offered them a one-year loan with 3% interest.
In the second quarter of 2010, Wells Fargo said that the number of its financial advisors stood at 15,102, down about 4%. The bank is now behind both Morgan Stanley Smith Barney and Bank of America-Merrill Lynch in terms of the size of its advisor force.
The firm says the number of advisors affiliated with its independent broker-dealer has grown 24% over the past 18 months. This group now includes 886 financial advisors with $40 billion in client assets.
Wells Fargo Advisors also includes some 5,094 licensed bankers.
In mid-July, boutique wealth-manager Baird hired Wells Fargo veteran William “Bill” Welsh to lead its San Francisco wealth-management office.
Wachovia Securities was officially renamed Wells Fargo Advisors in May 2009, about five months after Wells Fargo acquired the firm and had a total of about 16,000 financial advisors. Wachovia bought A.G. Edwards of St. Louis in late 2007.