Wirehouse Wells Fargo, in a bid to hold on to its private client group advisor force, wants them to know that their compensation is — mostly —staying the same, according to news reports.
Advisors in the firm’s private client group, which has around 9,450 brokers, will not have to hit new monthly production targets to maintain their payouts, AdvisorHub writes, citing several internal sources.
Under the firm’s current two-tier plan, advisors will get to keep 22% on the first $11,500 to $13,250 in monthly production, and a flat 50% on anything above that, according to the industry website.
Wells Fargo hasn’t raised the target in several years, although it has in the past, AdvisorHub writes.
“With all the other changes that are happening, we wanted people to have consistency,” a Wells Fargo official who asked to remain anonymous tells the website.
However, brokers generating less than $250,000 in annual revenue who don’t participate in the two-tier system will see their payouts reduced from the 2018 levels, one of the sources tells AdvisorHub. The website does not specify the size of the cut. Meanwhile, brokers who produce at least $500,000 will continue receiving a “segmenting” bonus of 50% if 75% of their client accounts have $250,000 or more on a household basis, according to AdvisorHub.
Wells Fargo will continue encouraging its brokers to move clients with less than $250,000 to “financial relationship advisors,” who are salaried brokers, the website writes.
Wells Fargo has lost more than 1,000 financial advisors across all its wealth management units since the 2016 revelations that employees in the firm’s retail banking unit opened millions of accounts without client authorization.
And during 2018, the wealth management division has been under investigation by the SEC and the Justice Department, which are looking into the unit’s sales practices.
Wells Fargo has made several changes to the division to stanch the exodus of advisors, including most recently announcing that it will get into the RIA space.