Wells Fargo Execs Call Credit Suisse Recruiting a “Success”
Wells Fargo’s hiring of about one-third of Credit Suisse’s U.S. brokers was just what it aimed for, bank executives said Thursday.
Wells, which negotiated an exclusive recruiting agreement last fall following the Swiss bank’s decision to close its U.S. “private banking” unit, ended up with 111 of CS’s 336 “relationship managers,” according to a tally leaked to k-tcc last week.
“We were able to recruit substantially all of the advisors that we targeted,” John Shrewsberry, Wells Fargo’s chief financial officer, told analysts after the third-largest U.S. bank reported a 6% drop in first-quarter earnings. “We are pleased with the success we have had in recruiting these advisors and look forward to their contributions.”
His tone was far removed from earlier more emotional responses that Wells executives had made after embarking on the open-door project. David Carroll, the head of Wells’ wealth and investment management division, said last November that competition for the CS brokers who tended to serve very wealthy clients had turned into a feeding frenzy. He and other executives have since tried to lower expectations.
While Wells still netted more CS advisors than any single competitor, it only slightly bettered the 101 who were hired at UBS AG’s U.S. brokerage unit. Credit Suisse has filed a raiding arbitration claim against UBS over its aggressiveness in recruiting from its brokerage unit as it was being closed.
For a list of the brokers who joined Wells Fargo and the dates they joined, click here.
Wells Fargo Advisors remains the second-biggest retail broker, behind Morgan Stanley, with 15,064 financial advisors, it reported Thursday. The total, which includes independent brokers at Wells’ FiNet channel, is unchanged from a year ago.
Wells Fargo does not break out its brokerage results from those of its broader investment management businesses. But it said that client assets at the brokerage as of March 31 were $1.4 trillion, down 2% from a year ago.
Bank of America, whose Merrill Lynch wealth unit is the third-largest U.S. broker with just over 14,400 advisors, said Thursday that its clients’ wealth management assets fell 2.3% from a year ago to $2 trillion. Average annualized per-broker productivity at Merrill fell 5.6% to $983,000 as of the end of the first quarter. Wells Fargo does not report productivity numbers.
Revenue at Wells’ wealth and investment management unit fell 3% during the quarter to $3.9 billion from the 2015 quarter. The bank attributed the decline to lower transaction revenue and asset-based fees.
Like Bank of America, Wells has been encouraging its brokers to sell mortgages and other loans to their clients. Average loan balances at Wells Fargo Advisors rose 22% year-over-year, the company reported.
John Stumpf, Wells Fargo’s chairman and chief executive, was upbeat about such numbers. Asked by an analyst about the bank’s acquisition plans, he the wealth division is the “most attractive area” for such expansion.
“If there was an opportunity to add something in that area that would make sense, terrific,” he said.