Independence is a powerful elixir, especially for brokers who are more or less employees for those wirehouses. Not surprisingly, many of those in-house brokers decide to test the waters and embrace the benefits of being an independent.
Kudos to Wells Fargo & Co (WF) for recognizing this dynamic.
Last week, AdvisorHub wrote about how WF “Leans into Its Independent Broker Channel.” Unlike the other three big wirehouses – Merrill Lynch, Morgan Stanley, and UBS Wealth Management USA – WF maintains an independent channel called Wells Fargo Advisors Financial Network (FiNet).
And that approach is paying dividends, according to Charlie Scharf, the chief executive officer of the bank, who spoke recently at the Sanford C. Bernstein Strategic Decisions Conference. While he conceded that the wirehouse makes less money on independent brokers, “we want them on our platform.”
Scharf added that WF decision is based on a “dramatically” changing industry. “The large company adviser model is not the fastest-growing part of the segment,” he said. “It is the independent channels where advisers want to have a feeling of ownership.”
And with that ownership comes self-determination and potentially better compensation.
AdvisorHub alluded to this, quoting managers, who said that FiNet brokers “have found they can make more money while still operating with largely the same resources as Wells employees.”
This is no surprise to Chris Stacey, the COO of 3xEquity, the industry leader in facilitating career transitions within the wealth management space.
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“We’re seeing a flood of in-house brokers at the wirehouses, who know there is a better alternative out there, and are engaging us,” Stacey said. “They recognize that the infrastructure is in place to be more successful than ever as an independent.
“The nice thing is that brokers don’t have to take my word for it when it comes to demand for their services. We offer an anonymous ‘Secure My Offer’ tool, which gives advisors the freedom to explore what is available. Embracing a more rewarding opportunity, as an independent, has never been easier for brokers.”