October 14, 2021

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Wells Fargo’s advisor roster shrank for another quarter, dipping to 12,552, down 9% from the prior year, and 2.1% from the prior quarter—although “attrition has slowed since last quarter,” a company spokesperson said.

The company’s sales force has been steadily declining from more than 15,086 in September 2016 when headlines surfaced about the consumer bank’s fake account scandal. But the bank has been looking to replenish its ranks with higher signing bonuses to experienced brokers and premium fees to outside headhunters, both of which Wells has said have helped bring in higher producers than those who have left. 

Some advisor departures in the third quarter were part of the company’s shuttering of its servicing of international clients, a plan unveiled in January, and its displacement last year of a sizable group of under-performing salaried advisors.  

Despite the shrinkage in its advisor roster, Wells’ wealth and investment management unit’s revenue grew 10% from the prior year to $3.6 billion, and net income rose by 38% to $579 million. Executives expressed confidence that the measures it has taken in recent years to reorganize the management of the various wealth units–including consolidating its 12 regions to eight in March–were paying off. 

Non revenue-related expenses fell 6% in the third quarter compared to the prior year, nd non-advisor headcount was down 10%, Chief Financial Officer Michael Santomassimo told analysts on the company’s third quarter call. 

“We have aligned our Wealth Management business under 8 divisional leaders, creating better coordination and efficiency,” Santomassimo said on the call. “We have also implemented a more efficient client service model across all distribution channels and have reduced total square footage by rationalizing our real estate footprint.”

The bank’s Chief Executive Charlie Scharf continued to emphasize better coordination and “maximizing the value” across all of Wells’ wealth management units—the traditional brokerage, bank-based advisors, independent brokers and self-directed platform.

“We feel like we have underinvested in the online piece and the independent piece for sure,” Sharf said. “And the bank branch piece is something which we think is just a very meaningful opportunity given the amount of affluent customers that we have in our branch footprint.” 

The four branches managed a total of $2.09 trillion in client assets, up 13% year-over-year largely driven by rising markets, the company said. 

Advisory assets accounted for $920 billion of the total client assets, compared to the $1.17 trillion in other brokerage and deposits, the bank reported.  Annualized revenue per advisor grew to $1.14 million, up 21% from the $940,000 from the prior year, the company reported.

The slowdown in attrition was mirrored at Wells’ rival Merrill Lynch, where an executive said that the rate of departures to the competition fell in the third quarter after an uptick earlier this year. 

Merrill no longer breaks out the number of brokers in its core advisory channel but had roughly 18,900 in all of its parent bank’s wealth management channels at the end of the third quarter, down 8% from the prior year and 3% from the prior quarter. Bank of America’s Global Wealth business managed $3.7 trillion, up 20% year-over-year, the company said on Thursday. 

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