Thread regarding Wells Fargo & Co. layoffs

I mean yeah, doubt these big wig FAs leafing will cause a material run. Pretty easy to look at the P&L and quarterly financials. 300mm left in August and didn’t even show as a blip on radar

@mah look again. WIM is not the same as WFA (FA's). WFA is doing quite well for the bank. We are tied to the other segments of WIM for common reporting–private bank, Abbot Downing, and WFAM.

Take a look at the 2019 Annual Report table 7. Hence the large recruiting bonuses.

Post ID: @mah+17CDXE7j

Well I’ll be happy to pass your thoughts on to our leaders who are making the FA recruiting decisions for the bank. I’m in plenty of meetings around the topic of the company’s dwindling advisor and asset numbers since the 2016 scandals and subsequent tarnished reputation. All I hear is concern, and they aggressively want new ideas regarding how to retain our current FAs, as well as attract new talent.

Wells Fargo is actively courting new advisors and wealthy clients. We are currently offering advisors from other firms anywhere from 150% -285% of trailing twelve months production upfront, as well as substantial back-end payments, depending on that production. Additionally, we have increased the fees to recruiters. To date, I see no change in advisor strategy even with the cost-cutting, the asset cap, the pandemic, the low interest rate environment.

I can’t say that won’t change. Charlie is a whole new ballgame. But I deal with people all day long who have limited situational experience and knowledge but look at data/spreadsheets/financials. They mistakenly think that tells the whole story. It’s often those people who make the worst decisions that have contributed to our current situation.

I read this post and some of the responses and there are some really dumb people working here.

@dlt

There is zero reason to guess at the math or dispute what I am saying. These financials are reported in black and white every quarter and published on the website. Expenses, income and nets are all there for anyone interested in facts.

Read them or don’t, but the basic fact of the matter is that WIM does not generate most of the profit at the bank. Consumer and Commercial make all the money.

Personally, I hope FAs start leaving in droves and taking their high-net worth clients with them. These are the high net worth clients who Wells Fargo loves to cross-sell their many financial services to. We handle their investing and trading, their credit, financial planning, trust and estate services, many of these clients own their own companies- so we handle their 10b51 programs, their 10b18 stock buybacks. Some have relationship with money managers so we handle that investing/trading/quarterly rebalances.

Then Charlie will say: “Why do our FA #s keep shrinking? It’s getting much worse, and our upfront recruiting packages are the largest they’ve ever been.” And someone, maybe me, will answer “The truth is that we have a few know-it-all’s in the ranks who continue to insist publicly that you do not value that segment of the business. For some reason, that makes no sense to anyone who is actually familiar with that business, these know-it-all’s keep pushing the rumor that you don’t think we make enough profit from that segment and will probably sell it off.” Guess Charlie should try to find out who loves to flap their gums.

Are you including commissions? If an FA generates $1m (fees and commissions), he gets 40% (using round numbers), add 70,000 for benefits and 401k match. You're saying WFA is unprofitable with a gross of 530,000? There is office and hardware expense, too, as well as support, and taxes, licensing, etc. I can't imagine WFA being unprofitable without interest income. They make a ton on margin accounts by rehypothecating marginable assets.

The primary way FAs create income for the bank is that they charge fees to clients. As of Q3 2020, the amount FAs brought in with fees was less than how much it cost to operate. They are not profitable by themselves, but universally appear to fail to grasp that.

Other parts of WIM generated interest income (usually with loans) and made it so that WIM turned a small profit. This is all available in the quarterly reports that anyone can read.

@mqn+17CDXE7j

"The non-interest fee income generated by FAs is actually less than their expenses"

Please elaborate, this makes no sense to me.

Banks are awash with deposits, so sorry there's not going to be any silent bank runs. The more deposits the better though since it will lower the COF's and help with NIM expansion. I think the real take away is you don't want to piss off star sales people no matter what. The bank lives and dies by sales. Charlies whole socialism campaign i hope to god is just for political theater. If Charlie doesn't have the consent order lifted by March ME, he and his friends in NY should be sh– canned.

You're right, but your conclusion is not correct. If the assets FAs take with them meant that much to the bank, it would put up a fight to keep them, but they don't. It's a way to grow other more profitable parts of the business under the cap. Those big dolla accounts you reference sound like a lot to most folks, but when looking at the company as a whole, isn't much money at all. It's about perspective and the bigger picture. Wholesale and retail is where the money is at, I would be surprised if almost every other piece isn't sold off so they can focus on those two.

I agree. Head of HR is equally stupid. Both should be gone. If Scharf were smart he'd make a show of showing DG out of the door.
But it's too late, now we all know. Plus the racist comments.... I don't know he's qualified for the job. If his shares are not vested it's not too late to replace him at a nominal damage.

The non-interest fee income generated by FAs is actually less than their expenses. Without a marginal amount of interest income, WIM would be close to bankrupt. Assets under management do not equal net income.

This has to be a joke. Go try this pump and dump trash somewhere else

I don't think FA's taking their clients will bankrupt the company, but it will have a severe effect on WIM's bottom line.

Its already happening

https://www.financial-planning.com/news/embarrassed-by-wells-fargo-6-advisors-take-300m-in-aum-to-raymond-james

Do yourself a favor and read an annual report.

You are living in a WIM/FA fantasy. Assets under management are not deposits.

Deposits by LoB at WF as of Q3

Consumer $888B
Commercial $418B
WIM $175B