Wells Fargo Reportedly Merging Brokerages
Amid ongoing scrutiny by the federal government of its wealth management businesses, Wells Fargo is planning to merge two large brokerage units, the Wall Street Journal reports.
The company intends to combine its Wealth Brokerage Services, which has around 3,400 brokers working out of retail bank branches, with its Private Client Group, which has around 9,500 brokers working out of the company’s brokerage offices, people familiar with the matter tell the paper. They add that the merger isn’t expected to impact Wells Fargo’s clients, according to the Journal.
But some sources tell the paper the company is weighing cutting around 1,000 staff through attrition and has discussed getting rid of around 100 regional managers within the wealth management business.
The merger is expected to be announced this week through an internal memo, one source tells the paper. But a Wells Fargo spokeswoman tells the Journal that while its Wealth and Investment Management division is “reimagining” itself for more efficiency, the company hasn’t yet made any final decisions. Wells Fargo also intends to continue offering wealth and investment management services across several channels, the spokeswoman added, according to the paper.
Wells Fargo’s advisors have been jumping ship since the 2016 revelations that employees in the company’s retail banking unit opened millions of bogus accounts without client authorization.
The company’s wealth management business remained mostly unscathed during the resulting regulatory scrutiny and litany of lawsuits, until late 2017, when the Justice Department, prompted by whistleblowers, ordered the firm to investigate the units’ sales practices.
In March, the Wall Street Journal reported that the wealth management business was under direct scrutiny by the Justice Department and the SEC.