Wells Fargo’s wealth management business will likely be reorganized, according to a report in The Wall Street Journal, with segments of Wealth Brokerage Services and the Private Client Group possibly being merged.
Overall, Wells Fargo Advisors includes some 14,400 advisors as of March 30. The private client group has about 9,500 brokers, while Wealth Brokerage Services has around 3,400 brokers, the paper said.
The bank’s “Wealth and Investment Management group is reimagining our business to become more efficient,” a spokesperson said in a statement shared with ThinkAdvisor, but “no final decisions have been made.”
It intends to continue working with investor clients across different channels, including community bank branches, advisor-led branches, Wells Fargo Financial Network (or FiNet, for independent advisors), online and by phone, according to a statement.
More details could emerge on Thursday, according to people involved with the matter who spoke with the paper.
Issues within the company and its wealth and brokerage operations remain problematic for Wells Fargo’s recruiting and retention efforts. For instance, advisors with some $1.3 billion in client assets have left the firm for Raymond James over the past few weeks, while additional reps departed for Kestra Financial, RBC Wealth Management and other broker-dealers recently.
In addition to problems at Wells Fargo bank involving fraudulent accounts and car loans, the company disclosed earlier this year that the Securities & Exchange Commission was looking into problematic fee calculations made by its wealth management unit, which affected fiduciary and custody accounts, and other matters. The Department of Justice also has had a role in the investigation, the WSJ reported.
The news followed the Federal Reserve’s move to restrict the bank’s growth in light of its troubles.
“Just when you think it is over, it is not — there is always more to the story,” said recruiter Danny Sarch after the Fed’s move was announced.
For its part, the bank said in a statement that its 10-K disclosures “reflect our continued commitment to transparency, even when all of the information or the final outcome of a matter may not be known just yet. We are making significant progress in our work to identify and fix any issues, make things right, and build a better, stronger company.”