Several hundred advisors have been included in recent layoffs at Wells Fargo, which started in August, the bank said Wednesday.
In its third-quarter financial report, Wells Fargo said it ended the period with 12,908 financial advisors, down 815, or 6%, from a year ago and 391, or 3%, from the prior quarter.
“While this change [from the prior quarter] represents retirements and some natural advisor attrition, it also includes the displacement of a sizable group of salary/bonus advisors as a result of the company’s work to become as efficient as we can,” according to a spokesperson.
“Wells Fargo has been transparent that we expect to reduce the size of our workforce through a combination of attrition, the elimination of open roles, and job displacements,” it explained.
Wells Fargo Advisors’ current headcount is down by 2,178 advisors, or 14%, from Sept. 30, 2016, when news of its fake-accounts scandal broke widely.
As for whether or not some of the “displaced” advisors were employed by the bank as financial relationship advisors, as reported by InvestmentNews, Wells Fargo would not confirm that information and noted that it had not requested that it be corrected.
These advisors generally are new to the business and work with clients with lower asset levels. There were roughly 625 FRAs at Wells Fargo last year.
The bank says its veteran new hires have about $704,000 in yearly fees and commissions, which is 1.3 times the production of departing experienced advisors.
“Departing advisors also had average production levels below the overall firm average. In short, we continue the trend of hiring larger producers than those who leave,” it explained.
As for retiring advisors, this number rose “slightly” from last year and last quarter, the bank added.
Q3 Financial Results
The bank’s Wealth & Investment Management unit had a 64% drop in net income from last year to $463 million. Its asset level was flat at $1.9 trillion.
The bank overall had a 56% year-over-year slump in profits to $2.04 billion. Earnings per share sank 55% to $0.42.
Though its loan-loss provisions were far smaller than analysts had anticipated, the bank also posted a surprise increase in expenses and set aside more than $960 million for customer remediation and close to $720 million in restructuring charges.
Overall, Wells Fargo is planning job cuts that may trim up to 20% to 25% of its workforce, according to a report last month in Pensions & Investments. That represents about 50,000 to 66,000 jobs.
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