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The perplexing case of Wells Fargo's non-wirehouse advisors: A blueprint for Merrill, UBS and Morgan or a cheap lesson in what not to do

The good news is that FiNet is the fastest growing channel at Wells Fargo; the bad news is that its brand and compliance can be hindrances

Author Lisa Shidler July 29, 2014 at 9:14 PM
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Jeffrey Fratarcangeli is the dream FiNet recruit -- big assets from a big rival.

KImberly Hollenbeck


Ryan Shanks


Danny Sarch


Sallie Larsen


Sarch Leitner


Joseph Line


Ron Sallet


Jeffrey Fratarcangeli



July 30, 2014 — 4:58 PM

Do not forget that Wells’ non-wire house advisors are subject to Well’s compliance policies and procedures; I also understand it to be the case that they bring in their legal guns to defend these non-wire house advisors in an arbitration hearing or lawsuit.
At the end of the day, maybe there is a cost-sharing of litigation fees? We do know that si some cases the records of these advisors are successfully expunged from the public forever. In that event, I guess Wells owns them?

What is perplexing?

What is perplexing?

July 30, 2014 — 5:36 PM

The title to this story is perplexing. It’s the fastest growing division of WFA, #1 individual assets per advisor, their wirehouse advisors are clamoring to switch over to FiNet, their comp packages are compelling. What is perplexing? “Is FiNet, the only wirehouse attempt at supporting independents, a success, a failure or a brand with such conflicting signals that it threatens to confuse more than clarify the designers of new indie-inside-wirehouse business model?”

“A cheap lesson in what not to do?”

Analysis and critique is great. Interviews with recruiters who do and do not work for FiNet are fine. But come on, you’re not talking about some fledgling little shop that’s on the precipice of collapse.

These headlines and catch phrases are attention grabbers for the supermarket checkout lane. Step it up.

Brooke Southall

Brooke Southall

July 30, 2014 — 6:12 PM

Notwithstanding the supermarket aisle, I do find FiNet hard to analyze for the experiment that it is. It’s wirehouse dogma that you can’t have employees and independents under the same brand. After 13 years of FiNet, nobody seems ready to declare victory or defeat for how it has done. One top recruiter says it’s a top choice. Another says it’s very much not. So yes it has $80 billion and that’s nothing to sneeze at but wirehouses measure success more in trillions. So I remain perplexed!


What is perplexing?

What is perplexing?

July 30, 2014 — 6:47 PM


Perhaps we’re splitting hairs, but FiNet doesn’t compete with wirehouses. They may be pulling wirehouse advisors, as do Ray James, LPL, Hightower, RIA’s, etc. But FiNet competes in the independent B/D space, and judging by the results included in this article, they’re doing it quite well.

Put another way, of the 3 primary channels at WF, FiNet is the only one showing significant growth. To ask the same question you are asking of internal WF management, you would receive a resounding Yes to your question of success or failure.

The better question is why WFA/Merrill/Morgan Stanley are languishing, and their advisors see greener pastures outside of the wirehouse world. We all know the various answers to that question, presumably, which also is one reason FiNet is doing so well.

By the way, don’t discount that WFA allows its higher producing FA’s to transition to FiNet.

If Merrill or Morgan Stanley built an independent B/D channel, one would expect similar rapid growth for similar reasons cited above. At the most basic level – advisors enjoy independence, higher payout, ownership of their practice, branding flexibility, and portability.

Teresa Vollenweider

Teresa Vollenweider

July 30, 2014 — 6:48 PM

The title is perplexing, because the whole thing is perplexing or maybe the better word is confusing. Confusion, obfuscation—that’s the name of the game for the financial services industry, isn’t it? I mean if you guys that are in the industry find it confusing, imagine how bewildered the people outside of the industry—the industry’s clients and customers—are. They are kept in complete darkness. Is he a financial advisor or a financial adviser or an asset manager or a wealth manager or a financial planner or a financial consultant or a money manager OR IS HE JUST A BROKER, I.E., A SALES REP? If you are in the industry, I suppose that you know that there are only these things to consider: Is he an investment advisory representative or is he a registered representative or is he both which translates to is he (broker/sales rep) a wolf cloaked in authentic-looking sheepskin (masquerading as an advisor/er).

Are those working for FiNet independent contractors or are they employees?

Are those working for FiNet fiduciaries?

How are they being compensated? Are there those things called compensation grids that drive/incentivize bad behavior?

Who supervises those at FiNet? Is it the branch manager? Is the branch manager/supervisor rewarded for the production of the FiNet guy or is the branch manager/supervisor rewarded for the FiNet guy’s maintaining a strong moral character and working in the best interest of his client/customer?

Mr. JoeDaWealthManager, I’m curious. How do you know this? — We do know that si some cases the records of these advisors are successfully expunged from the public forever. And who is “we” in your statement?

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