Wells Fargo Narrows Search for Brokerage Chief
Brokers at Wells Fargo Advisors are touting three internal candidates as most likely to replace Mary Mack as head of the third biggest U.S. brokerage firm, as measured by its roughly 15,000 advisors.
Mack in late July was unexpectedly promoted to run Wells Fargo & Co.’s community bank division, the bank company’s biggest business. She began her new job on August 1 after two-and-a-half years at the retail broker-dealer.
An announcement on her replacement is likely to be made made this month, according to two veteran brokers with knowledge of the search process.
They and other sources close to senior management said the lead contenders, in alphabetical order, are Jim Hays, head of the Wealth Brokerage Services in-bank branch business; David Kowach, head of the freestanding network of Private Client Group brokers; and Jay Welker, president of Wells Fargo Private Bank, the traditional trust and wealth management business for high-net-worth clients.
Each has strengths that could weigh in their favor as the third biggest U.S. bank by assets seeks to better integrate its commercial banking and investing/wealth management businesses to build market share among the wealthy. Ever since the former Wachovia Corp and its farflung network of small broker-dealers was absorbed by Wells Fargo during the financial crisis, traditional brokerage executives have been nudged aside in favor of those with commercial banking lineages.
“The likelihood is that the bank wants to get its clutches around the broker-dealer,” said a veteran Wells Fargo broker on the West Coast.
By that standard, Welker could have an inside track with David Carroll, Wells’ Wealth and Investment Management Division head who is running the search committee, and Mack, whose influence remains strong, sources said. Each has been with Wells and predecessor banks Wachovia and First Union for some 35 years, and were bankers before they knew much about the brokerage business.
As president of the traditional private bank since mid-2003 and regional president of U.S. Trust Co. for six years before that, Welker has deep experience with selling credit and trust services to “affluent” and high-net-worth clients with about $500,000 and more and pitching them investment management services. He joined Wells Fargo Bank in 1988 as a commercial banker and in the mid-90s ran its private client services brokerage unit in California.
A move from the private bank’s $185 billion in client assets and 70,000 relationships to Wells Advisors’ $1.4 trillion in client assets and 3.1 million household accounts would be a big one for Welker.
He is not a favorite with the field largely because “he did not come from this side of the house,” the West-coast broker said.
Mack attracted similar criticism when she was elevated to run Wells Fargo Advisors in 2014, but she has steered a diplomatic line between her bank superiors seeking more loans and referrals from brokers and reassuring brokers of their core value to the bank’s cross-marketing ambitions. Prior to her elevation, Mack briefly ran the bank’s in-branch brokerage business, but spent most of her career as an investment and commercial banker.
Hays has straddled the brokerage-commercial banking divide from a different perspective. He joined Wells Fargo Advisors in 2005 after 18 years at Merrill Lynch to run the farflung private client group brokerage network with some 10,000 brokers, but in what was widely viewed as a demotion was shifted in 2012 to Mack’s former role running the in-branch Wealth Brokerage Services unit. Together with his earlier role running Merrill’s trust company, family office group and high-end “private wealth” brokers, however, the skills put him in serious contention for the top job with bank honchos.
“I think he is misunderstood [by the brokers] but he’s a balanced thinker,” said the West Coast broker who has been with Wells since 2000.
Kowach, who has been at Wells Fargo since 2000, is by some lights the popular choice among brokers in the field. He is a lifetime broker and manager, and currently runs the private client group that Hays once headed, Wells Advisors’ biggest business line. He was previously head of private client sales, or “business development,” and also was national sales manager for the former Wachovia Bank’s Evergreen Funds asset management unit.
A Wells Advisors spokeswoman said that the three were “obvious choices,” but declined to say where they stand in the search committee’s deliberations, whether outside candidates are being considered or when a final announcement on Mack’s replacement is expected.