In a move that stands to impact at least 45,000 customers, Wells Fargo private bankers are being instructed to move clients with balances of less than $5 million to a new mass affluent offering within the firm’s wealth and investment management division, a Wells Fargo spokesman confirmed.
The news is based on internal documents first obtained by Insider, a news site that focuses on financial and political news.
The strategy, which Wells Fargo launched in late August with a carefully worded script for advisors to use with clients, is on schedule to be completed by the end of November and could mean additional fees for some customers as they are moved into lower-tier offerings, the documents show.
"Periodically we review our client's accounts to ensure they have the products and services that are appropriate for them," the Wells Fargo script for advisors reads.
"In our recent review, we saw that there was another deposit account, mentioned in the letter, which was a better match with the financial activity that you are currently conducting with Wells Fargo,” the script continues.
"Keep the positives top of mind," the bank told brokers in a recent memo explaining the changes. "The Wealth Management team will continue to serve the client, all monthly fees will be waived until 12/31/2023,” Insider reported.
The move is the latest in a reorganization that cost Wells Fargo 5% of its advisors last year, the company reported.
The strategy which was motivated by cost-cutting appears to be having the opposite affect on the firm’s bottom line. Wells Fargo’s wealth and investment management unit brought in $603 million in second-quarter earnings, an almost 30% increase over 2021.
The move has included placing its private-banking operations and brokerage unit in the same unit and absorbing its elite Abbot Downing brand, which has worked with clients with $50 million in assets, into its private bank.
The firm started notifying clients with less than $5 million in assets of the shift on August 12 and the transition, with the transition expected to wrap up by November, according to the materials.
Previously, the private bank served clients with between $2.5 million to $50 million in assets, while richer clients were managed by Abbot Downing.