Wells Fargo’s WM Unit Poised for Major Reorganization
Wealth managers at scandal-plagued Wells Fargo will now have to contend with a restructuring of the unit, according to a memo from the head of Wells Fargo’s Wealth and Investment Management division cited by AdvisorHub.
In a memo sent out to the unit’s 36,000 employees last week, Jonathan Weiss said they’ll need “discipline, fortitude, integrity and compassion” to handle the restructuring of the wealth management unit that will be announced during the next few weeks, according to the industry news website. Weiss didn’t provide any details on the restructuring but said it would affect various middle- and back-office as well as client-facing facets of the business, AdvisorHub writes. The reorganization, according to Weiss’s memo, would simplify the firm’s front-line client business, leverage its middle- and back-office operations and streamline delivery of products while cutting operational risk, the publication writes.
Wells Fargo’s wealth management unit stayed out of the regulators’ crosshairs for some time following the 2016 revelations that thousands of employees in the company’s retail banking division opened millions of client accounts without their authorization.
But spurred on by whistleblower complaints sent to regulators in September, the Justice Department and the SEC began investigating sales practices at the wealth unit as well.
Weiss’ memo didn’t address the fake-account scandal, according to AdvisorHub. However, he said the current model of operations for private bankers and financial advisors limits the products and services the company can offer to its clients, according to the website.
Wells Fargo Advisors’ 14,200 brokers had been expecting some sort of restructuring aimed at getting rid of redundant staff and operations the firm had built up after years of acquisitions of regional brokerages, AdvisorHub writes.
Nonetheless, Weiss’s memo produced some negative reactions among Wells Fargo Advisors’ rank and file, according to the publication.
“More doubt and questions,” a complex manager wrote in an email to AdvisorHub. “Very disappointing memo with not much detail.”
A spokeswoman for the firm tells the website the memo didn’t have details because there had been no final decisions made.