Wells Fargo Advisors’ midyear pay tweaks
Wells Fargo Advisors continues to tinker with its compensation plan for advisors, this time focusing on a series of changes to its fee on advisory programs that could add to or subtract from financial advisors’ pay.
According to a well-placed industry source, who spoke confidentially to InvestmentNews about the midyear compensation updates, the changes will have an impact on advisory accounts at the wirehouse, which has 12,000 financial advisors across various business channel.
Depending on the mix of assets in those accounts, about one-third of Wells Fargo’s advisors could see a significant boost to their compensation, while the other two-thirds could take a hit of up to $1,000 a month, according to the source.
The one-third of Wells Fargo’s advisors who could see the compensation bump from the changes are those who use money managers like T. Rowe Price and other third parties, the source said. “This could be a huge boon for those advisors.”
“Compensation drives financial advisors’ behavior,” said Danny Sarch, a veteran industry recruiter.
Broker-dealers are increasingly chasing registered investment advisor assets, and using bonuses and boosted compensation as ways to motivate advisors. RIA assets charge annual fees and are regarded in the wealth management business as stickier for firms and advisors.
As a result of the steady revenue stream from RIA assets, wealth management firms that are RIAs also are seeing higher valuations in the current mergers and acquisitions marketplace than broker-dealers, which charge commissions.
The financial advisors who benefit from the change would be getting a piece of the revenue the firm collects when advisors select a third-party money manager, according to the source. To
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