Wells Fargo’s Bank Scandal Still Hurts Its Advisors
Brokers at Wells Fargo Advisors continue suffering fallout from the scandal that engulfed the company’s retail bank last year and it may not end anytime soon, ThinkAdvisor writes.
The Wells Fargo brand is still tainted as a result of last year’s revelations that its retail branch employees may have opened at least 2 million bogus credit and debit accounts without customers’ knowledge, Danny Sarch, president of recruiting firm Leitner Sarch Consultants, tells the publication.
Wells Fargo settled for $185 million over the revelations with regulators last fall. But it may take a year or longer for the firm once known as Warren Buffet’s bank to rebuild its image, he tells ThinkAdvisor. And that will continue affecting the company’s advisors in myriad ways, from networking to signing new clients, he says.
This week, Wells Fargo reached a $110 million settlement with its bank customers over the fake account scandal, but the same day the Office of the Comptroller of the Currency downgraded the bank in its community banking laws score, according the publication. That type of “headline risk” will continue haunting the firm throughout this year, Gerard Cassidy of RBC Capital Markets tells ThinkAdvisor.
Sarch says he’s heard from advisors they’re losing business and the numbers seem to support it, according to the publication.
Wells Fargo Advisors shed almost 200 financial advisors in the last three months of 2016, going from 15,086 in the third quarter to 14,888 in the fourth quarter, ThinkAdvisor writes.
Earlier this month, Ameriprise scooped up a team of brokers who previously managed $500 million at Wells Fargo Advisors. And last week TD Wealth Private Client Group picked up a 16-year Wells Fargo investment advisor. A $138 million team recently left for Raymond James and another $375 million group left for Raymond James’ employee channel in February. In the last quarter of 2016, meanwhile, LPL Financial snapped up 11 brokers from Wells Fargo Advisors who managed between $30 million and $99 million each, ThinkAdvisor writes.