Wells Fargo Advisors, which continues to see its headcount dwindle, is leaving most of its compensation program unchanged for 2020. It currently has 13,753 advisors, down 751 from a year ago.
“It’s notable that Wells Fargo, in contrast to both Morgan Stanley and UBS, left its grid intact. Payout percentages and hurdle rates are the same,” said executive recruiter Mark Elzweig.
“Wells Fargo is focused on attracting successful producers from rival firms and retaining their current salesforce,” Elzweig explained. “The fact that they haven’t monkeyed with their grid reflects that reality.”
The brokerage group, though, will have a 20% flat-rate payout in 2020 on client households with less than $250,000 in assets. That payout level currently applies to households with under $100,000.
“The new small household policy is not really a surprise. Major wirehouses want their advisors to focus on $250,000-plus households,” added Elzweig.
Overall, advisors with 75% of client households above $250,000 in assets “can [still] get a full payout … between cash and deferred compensation,” said Rich Getzoff, head of advisor-led business for WFA.
The 20% payout for households with between $100,000 and $250,000 will be assessed monthly; if a household tops $250,000 in its first year with WFA, it becomes eligible for a full-grid payout dating back to the first day.
Advisors with more than $250,000 in 12-month fees and commissions and with more than 75% of households above $250,000 in assets are eligible for full grid rates on these clients via deferred compensation, the grid plan states.
FAs with $250,000 in 12-month production with 50% to 74.9% of households with at least $250,000 in assets are eligible for partial grid rates in deferred compensation with some stipulations.