June 1, 2022
Wells Fargo CEO Charlie Scharf.
The CEO of Wells Fargo & Co. Charles Scharf on Wednesday voted in favor of the bank’s wealth management department, crediting its dramatic reorganizations in recent years with the creation of a more streamlined “distribution force”.
“We love our wealth business and believe it is an incredibly important asset for us, both on a stand-alone and integrated basis across the company,” Scharf told an audience at the Sanford C Bernstein Strategic Solutions Conference online. .
Scarf, who praised the head of wealth and investment, Barry Somers, was increasingly focused of the unit despite its relatively small growth in the bank. It represents 18% of Wells Fargo’s revenue and 9% of the bank’s profits in 2021, but other heads of major banks, including JP Morgan CEO Jamie Dimon, were advertising their brokerage operations in the recent months.
In his presentation Wednesday, Scharf welcomed the relocation of the wealth department last year to combines its two private banking businesses with extremely high net worth and fold them into a traditional brokerage operation. It was the latest in a series of changes designed to reduce costs and streamline leadership across multiple channels, including traditional brokerage, based on advisory banks, private bankers and independent brokers.
This move provoked a increase in departures to large private banking teams that were said to be frustrated by the cultural clash between paid private bankers and commission-based intermediation.
But Scharf said the combination “significantly improved” product lending offers and trusts that were blocked at the private bank but are now open to its traditional brokers, who target a wider range of wealthy high-net worth clients. .
“We will ensure that we have a range of products and services that are tailored to the needs of our customers and their wealth, not based on where they are in our individual business,” Scharf added.
Scharf also signaled that he expects cross-sales of the bank’s products and services, once disgraced by the fake commercial bank scandal scandal in 2016, to become a slogan at Wells Fargo again.
“We combine deposit products, payment products, credit products, consulting products and investment products,” Scharf said. “The wealth business is an integral part of this discussion.”
The CEO also identified a “huge number of wealthy clients” in the consumer bank and the small business banking department as a group of potential investors. Scarf also did not rule out greater cost reductions on a bank-wide basis. “We know there is still a significant amount more,” he said of Wales’ inefficiency.
Scharf’s cheerleader in the wealth business is following a series of changes in the executive branch at the top of the company’s brokerage operations.
In May, Wales has announced that James E. “Jim” Hayes will retire from July 1 as head of Wells Fargo Advisors. Hayes, who the company said was retiring after a 35-year career, has been replaced by Sol Gindi, chief financial officer of the Wealth and Investment Management Division.
In March, Wales has announced that John Alexander, who was the “head of a separate network” managing the eight regional leaders in 12,400 Wells Fargo Advisors brokers, is leaving.
A month earlier, in Januaryy, Keith Vanderwine, one of the eight regional directors overseeing Wells Fargo Advisors’ private client group, left the company after leaving on leave for a few weeks. Vanderwine, who has spent the past two decades in various leadership roles at Wirehouse and was promoted to manager of the Southeast Department in March, is also retiring, an AdvisorHub spokesman said at the time.