As it overhauls varied business lines for financial advisers, Wells Fargo Advisors continued to see a decline in its overall headcount of advisers, and on Wednesday reported 12,819 advisers at the end of June.
That’s a quarter-over-quarter headcount decline 458, or 3.4%, and an annual drop of 1,387, or 9.8%.
Wells Fargo & Co. CEO Charlie Scharf during a conference call Wednesday with analysts said the bank had work to do on its business lines, including wealth management, to get them up to speed.
“We’ve got online capabilities in Wells Trade that we’ve completely underutilized,” Scharf said. “We have a platform for brokers that want to go independent that we’ve completely underutilized.”
“And so that work is going on in the background,” he said. “And hopefully… you’ll start to see things come to market.”
Wells Fargo is in the middle of revamping its wealth management franchise and such changes often lead to a reduction of the number of financial advisers at large enterprises. Financial advisers crave stability, and businesses that are in the midst of changes can spur some advisers to seek calmer waters.
The company is cutting its international wealth management business, resulting in advisers leaving the firm. And, as part of broad cost-cutting, Wells Fargo in October said it laid off a “sizable group” of salaried advisers and is streamlining operations by combining its private bank with mainstream wealth management group.
“This quarter, we saw an increase in departures from advisers who primarily focus on international clients, which we anticipated,” a spokesperson wrote in an email. “Our continued organizational work as we bring together the Private Bank and Wells Fargo Advisors should finalize later this summer.”
“The interim state of that work led to some departures, which combined with retirements to round out the changes this quarter,” the spokesperson wrote. “Our hiring pipeline is stronger for the second half of the year.”
The bank’s Wealth and Investment Management group, which includes Wells Fargo Advisors, reported increases in revenues and assets in line with the rise of the broad stock market in the past 12 months.
Wealth and Investment Management revenue in the quarter increased 10% year-over-year and reached $3.54 billion, primarily due to higher asset-based fees on higher market valuations, according to the company, while total client assets of $2.1 trillion increased 20% in the same time, primarily driven by higher market valuations.
Annualized revenue per financial adviser also increased 20% when compared to a year ago, reaching $1.08 million.
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