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Wells Fargo Moves to Restructure Wealth Unit

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What You Need to Know

  • The consolidation will cut the number of regions in Wells Fargo's private client group to eight from 12.
  • This represents another change designed to help the business become a “flatter, more nimble organization,” it says.
  • The change is “long overdue,” explains Danny Sarch, head of the recruiting firm Leitner Sarch Consultants.

In yet another initiative intended to narrow the structure of its wealth management businesses, Wells Fargo says it plans to reduce the number of its private client group regions from 12 to eight.

The news comes roughly a week after Wells Fargo announced it was selling its Asset Management unit, which includes some $603 billion in assets and 450 investment professionals, to private equity firms GTCR and Reverence Capital Partners for $2.1 billion.

The latest initiative represents one more change that Danny Sarch, president of the recruiting firm Leitner Sarch Consultants, called “long overdue.” The consolidation reflects the company’s new management and leadership, which “inevitably lead to cost reductions,” he told ThinkAdvisor on Friday.

Latest Headcount

The number of both Wells Fargo financial and wealth advisors in the fourth quarter stood at 13,513, versus 14,414 a year earlier and 13,793 in the prior quarter. These advisors had average yearly fees and commissions of $1.013 million vs. $1.002 million a year ago and $943,000 in the prior quarter.

In its third-quarter financial report, Wells Fargo reported that it had 12,908 financial advisors, down 815, or 6%, from a year ago and 391, or 3%, from the prior quarter.

Wells Fargo Advisors’ financial advisor headcount on Oct. 31 was down by 2,178 advisors, or 14%, from Sept. 30, 2016, when news of its fake-accounts scandal broke widely.

Total assets for the unit were $2 trillion as of Dec. 31, 2020, up 6% from last year. Excluding Asset Management operations, assets were $1.4 trillion.

Details on the Reorg

Once the changes occur, the eight new divisional leaders will report to John Alexander, head of Regional Network for Wells Fargo Wealth & Investment Management’s Client Relationship Group, which includes Wells Fargo Advisors, The Private Bank and Abbot Downing.

The leaders are Rich Getzoff for the Eastern division; Kent Caldwell-Meeks, Midwest; Mike Carroll, Northeast; Susan Mayo, Northern; Kevin Kitchin, Pacific North; Dave Altshuler, Pacific South; Keith Vanderveen, Southeast; and Alberto Gonzalez Saint Geours, Southern.

However, because Wells Fargo is not moving into the new divisional structure immediately, the divisional leaders will remain in their current roles for now.

This means Getzoff is directly reporting to Alexander as head of branch network. Caldwell-Meeks recently transitioned to become a direct report of James Hays, WFA CEO and president, leading the partnership with the Trust business.

Why the Move?

The company decided to consolidate the sales regions as part of its ongoing efforts to evolve “into a flatter, more nimble organization that brings all our services to clients and makes it easier for them to do business with us and for advisors to support clients in doing so,” according to Wells Fargo spokeswoman Shea Leordeanu.

“We want to make sure our advisors, who are in front of clients every single day, are in a position to deliver seamlessly the services their clients want and need and to get answers quickly,” she told ThinkAdvisor by email on Friday.

The announcement of new divisional leaders for those consolidated regions represents the “next step in the journey to bring together the groups who manage client relationships,” she explained. “These divisional leaders will be responsible for leading and growing business across Abbot Downing, The Private Bank, and Wells Fargo Advisors.”

Wells Fargo “will continue to support our industry differentiating multi-channel model with advisors in bank branches, private client branches, wealth hubs, and independent offices,” she pointed out about the plans, which were first reported Thursday by Advisor Hub.

Although the company announced the leaders for the eight regions now, she said: “We’re not realigning the organization into the new divisional structure for some time. Whether our teams are in the field structure or support the field structure, their roles will not change today.”

What’s Next?

The “next level of organizational work” as part of the consolidation “will involve the go-forward market structure,” Leordeanu went on to explain.

“We anticipate market leaders in most major metropolitan markets and across some wider geographies as well,” she said. “The market leaders will also lead and grow across all three businesses.”

As Wells Fargo works on the markets, the “go-forward structure will be made up of existing and new roles,” she said, adding: “This type of transformation takes time and it will be several months before all of the market structure details are ready, likely in late spring. In the meantime, most roles are not changing and our core focus is taking care of clients. That will never change.”

(Photo: Bloomberg)

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