What in the World is Wells Fargo?

The bank is attempting to be all things to all people, but is Wells Fargo the jack of all trades, master of none?
Justin Sullivan/Getty Images News/Thinkstock

Think about that question for a minute. What is Wells Fargo? Of course it’s a national bank, with the iconic logo. But what is it - what are they? What are they attempting to be in the context of wealth management? A bank brokerage? An independent shop? A full service platform? An aggregate of a few different regionals over the past decade? You could make the case that they are all of these... but what now? What’s next?

It seems to me that Wells Fargo is attempting to be all things to all people. If you actually count the legacy “profit formula” platform there are four different ways to transact business as an advisor under the Wells Fargo umbrella. That is ambitious to say the least. Does it beg the question - jack of all trades, but master of none? I guess I would make that argument. Let’s do a quick evaluation of each platform.


  1. Full service. About a decade ago, Wells Fargo was nothing more than a good size (and conservative) principally transacting business on the west coast. Nobody within the wealth management industry considered them a “wirehouse” or even a threat of any kind vs. their current competitors. The financial crisis dropped them squarely into the wirehouse space when they chose to acquire Wachovia Securities at the height of the crisis. Of course Wachovia had previously acquired multiple smaller regional firms (AG Edwards and Everen Securities come to mind). The Wachovia acquisition seemed a bit out of character for the bank, but the times called for a “robust balance sheet” hero and Wells Fargo dove in. In the simplest of terms, Wells Fargo became whatever Wachovia used to be. Thus, Wells Fargo Advisors was born.
  2. FiNet. In the same way that Wells Fargo simply adopted the Wachovia full service platform - the same can be said for FiNet. FiNet competes with the likes of LPL and Raymond James, yet remains attached to the larger organization. So when Wells Fargo states that they currently employ 14,000+ advisors, does Finet make up a sizable portion of that number? There have consistently been rumors (a few that I can personally attest to) that FiNet is no more nimble (as and independent should be) than the behemoth under which is operates. Operations suffer from the same largess as the full service channel - yet are being sold as “the independence you desire, and the resources you need”. So what is FiNet? Is it a nimble independent organization with the ability to compete with LPL and Raymond James, or an extension of one of the nations 5 largest banks?
  3. Bank brokerage. Wow! Talk about overlap. So the question should be asked again; when it comes to head count, is the bank brokerage channel included in the overall number? How does the organization decide which clients are good prospects for the bank channel as opposed to the full service channel? How in the world is “cross selling” handled across multiple platforms? This is getting bizarre.....
  4. Legacy Profit Formula. I told you it was getting bizarre. So if you’ve never heard of Profit Formula here you go : It is a hybrid platform within the full service model, operating out of full service branches where certain expenses are shared and, theoretically, a higher payout is affected. (SHEW!). So before hybrid platforms became all the rage - Wachovia was trying to create one inside of their full service brokerage branches. Got all that? By the way - Wells Fargo no longer offers Profit Formula (even though the hybrid platform is now a “thing” in the industry - becoming more and more popular by the minute read: HighTower and Cantor Fitzgerald).


So I ask the question again: What in the world is Wells Fargo? Is it a top tier full service brokerage firm? Many industry observers may quibble with that claim. Is it a top notch independent? This case could certainly be made; although operational challenges exist inside the larger organization. Is it a profitable national bank with robust profit margins and a quality name brand? Yes, that can certainly be said. Is it a hybrid platform within a full service brokerage house? Uh, no. It used to be though!

The point that I am making is that Wells Fargo has a well-deserved reputation as a national bank with a sterling brand name. Why all the fuss with multiple platforms that seem to contradict one another? Bank brokerage, profit formula, wirehouse and FiNet? When the rest of their competitors are “shrinking to success”, why does it seem like Wells Fargo (in the area of wealth management) is a fleet of boats without rudders?


Andrew Parish is the CEO and founder of AdvisorHUB and managing director of Axiom Consulting. Follow him @APadvisorhub



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