Wells Fargo advisors jumping internally — to FiNet

investmentnews.com:

Wells Fargo Advisors, the broad marketing umbrella for close to 12,000 bank advisors, wealth management advisors and independent advisors, is betting big on its independent advisor business, in which an advisor works as either an independent contractor or registered investment advisor.

With thousands of financial advisors leaving or retiring from Wells Fargo since the banking scandals of 2016, the bank has turned to its independent business model, where advisors pocket a larger percentage of revenue, as a way to hang onto its veterans. Last summer, Wells Fargo took a big step in bolstering its independent broker-dealer, Wells Fargo Advisors Financial Network, known as FiNet, when it created a new bonus for advisors who would have otherwise lost hard-earned deferred compensation.

Senior Wells Fargo executives are touting the growth in FiNet and its RIA business.

“We really do believe that five years from now, the independent channel will be our biggest channel,” Barry Sommers, CEO of Wealth & Investment Management, said in an interview last month with Bloomberg News. “We’re not sitting there worrying about margins, we’re worrying about building the right platform for advisers and clients.”

InvestmentNews Research data make it clear that Wells Fargo has created an easier path for advisors to switch from Wells Fargo Clearing Services, the broker-dealer that’s home to its 9,000 or so wealth management advisors, to FiNet.

What’s not clear is how much revenue this is costing the firm; each Wells Fargo advisor generates on average near $1 million or more in annual revenue.

Independent contractor brokers or investment adviser reps typically capture 80 cents of each dollar of revenue they generate in fees and commissions;