After almost three years of bleeding brokers, Wells Fargo Advisors appears to have stanched the flow of advisers leaving the firm.
Its parent bank, Wells Fargo & Co.
has struggled with myriad problems and scandals since September 2016, resulting in a steady flow of advisers out of the firm's wealth management business.
But on Tuesday, the bank reported that just 29 advisers had left in the second quarter, compared with 140 in the first quarter and 106 in the fourth quarter of 2018.
"We had our best recruiting quarter since 2016 in terms of both the number of hires and the associated production," wrote Wells Fargo spokesperson Shea Leordeanu in an email.
"Adviser attrition has dropped, our pipelines are robust, and the recruiting activity levels of our local managers are very high," she wrote, adding that the company is currently hiring advisers who produce more revenue when compared to 2018.
Wells Fargo's problems started in September 2016 with the news that Wells Fargo bank employees had secretly created millions of unauthorized accounts in the names of customers without their consent. The bank was fined $185 million and then-CEO John Stumpf resigned abruptly.
At the time, Wells Fargo Advisors had 15,086 financial advisers across its array of channels, from bank brokers to traditional wealth management advisers to independent contractors. Since then, the firm has seen a decline of 1,287 advisers, or 8.5%.
Competitors including Raymond James Financial Inc. and LPL Financial have been among the firms that have successfully recruited Wells Fargo reps and advisers over that time.
"We anticipate continued productivity growth even if headcount continues to decline," Ms. Leordeanu noted. "With an aging workforce, we expect ongoing retirements.
Meanwhile, the bank reported retail brokerage client assets of $1.6 trillion, basically flat when compared with the same quarter last year.
Advisory assets increased 3% when compared to the same period, hitting $561 billion. The increase was driven primarily by higher market valuations, partially offset by net outflows,
according to a company presentation.
