“Attracting the industry’s top talent will always be a priority for Wells Fargo Advisors,” a spokeswoman for Wells Fargo told The Wall Street Journal. She said recruiting advisers who bring their clients with them to Wells Fargo has helped the bank “grow in key markets.”
The San Francisco-based bank sweetened its recruitment offers in the wake of reports that Morgan Stanley was reducing its bonus sign-on pay for new broker hires. UBS Group AG and Merrill Lynch have also recently tamped down on the practice, which gives bonuses structure as loans as well as commissions as high as 150 percent of the revenue the broker generates as fees.
Wells Fargo’s move against the grain of its competitors makes it the lone standout among the four main brokerages, which refer to the practice as a “zero-sum game” but a necessary channel for revenue growth, the Journal reports. (See also: A Split Outlook for Bank ETFs.)
Wells Fargo Advisors, the bank’s brokerage arm, has been losing brokers at a rapid clip. Now, the bank is trying to rebound from the impact of a scandal involving its cross-selling practices, a case it settled for $185 million in September 2016. Since then, it has lost 2 percent of its broker workforce, or 429 brokers, as of the first quarter, the Journal reports. (See also: Four Wells Fargo Managers Fired.)
Wells Fargo shares are down 4.4 percent year to date, and up 4.25 percent the past year.