Wells Fargo Advisors recently created an entirely new position, 'Head of Advice.' Atul Kamra, formerly head of First Clearing for Wells Fargo, will take up the role, with the aim of expanding Wells Fargo’s advice offering. Wealthmanagement.com spoke with Kamra about the new role and about Wells Fargo Advisors’ culture and advisor recruiting.
WealthManagement.com: Why did Wells Fargo create this new role?
Atul Kamra: So just to provide some background, Wells Fargo Advisors is a multichannel business managing $1.2 trillion in assets. I’d say we want the advice that our financial advisors provide our clients to be of the highest quality. As Danny [Ludeman, Wells Fargo Advisors President and CEO] puts it, we are committed to setting the standard around advice. I think about ensuring quality as a three-legged stool. I call it the 3D stool. The first D is diligence on our clients, their needs, their risk tolerance, their aspirations. The second leg is the diligence of the products, markets, solutions. That’s ultimately the content that makes up a client portfolio, we refer to that in industry jargon as the pie chart. The third D is the diligence and proficiency of advisors, making sure they have the right skills, the right tools, the right information. High quality advice is effectively connecting the advisor with the plan and the pie. And what this move does is places the accountability to connect all three under one role. By that it positions us to strengthen each one of them.
WM: Are there individuals in charge of each of the three areas that then report to you?
AK: Kristen, at the heart of this role is to collaborate effectively across all parts of Wells Fargo Advisors. And no, not all of these groups report to me, and that’s almost a point. The diligence on the products and the markets and the solutions has generally fallen under the Advisory Services Group, which would report to me. The diligence on clients is the responsibility of advisors. The diligence and proficiency of advisors is something managed by the team that is responsible for advice and for our channel leadership. That’s a collaborative role.
WM: Does this new role mean there will be a closer alignment between the full-service and the independent channels?
AK: No, I don’t think it changes the dynamic there. We have a model where we leverage things that are common but we appreciate the differences between the independent, full-service and bank formats. We want to make sure we preserve those differences as well as making sure that the scale-based model we have stays in place. This is essentially designed to make this the most empowering place for our advisors to do business and the safest place for them to do business.
WM: So as part of this role, you’ll be expanding Wells Fargo’s advice capabilities, and that entails creating new advice offerings in a bunch of areas: income potential and protection strategies, insurance, liability management, as well as products, pricing and process. Can you tell me more about what that means, to create new advice offerings in those areas?
AK: There are two additional parts to how I think about the role, Kristen. And we can talk in a couple of years as to what we pulled off, right? One part of the role, I refer to as risk management and stewardship, which is on an ongoing basis, stress testing the portfolio we have of our client assets for a wide variety of scenarios. But when you think about innovation, I would say collaborating with other parts of the organization to build innovative solutions—income based solutions, protection based solutions.
WM: When you say solutions what do you mean? Are you talking about model portfolios or product manufacturing, or what?
AK: I would say that it’s all of the above, right? Ultimately, we’re here to understand what our clients need and what sets of solutions best fit their needs. They all ultimately go back to asset allocation, risk tolerance and their aspirations. So any product you build is going to come down to some form around which their assets get allocated. The other piece of it is to anticipate the impact of technology and digitization on advice and research and how that can be effectively applied to the way our advisors relate to our clients. That will be an exciting part of what this will be.
WM: We just recently wrote about a strategic shift at Morgan Stanley to make performance the first priority for advisors. They did this with a number of different technology tools, allowing advisors to benchmark the performance of their clients against one another and against that of other top advisors at the firm, among other things. Does Wells Fargo allow its own advisors to do this kind of performance benchmarking now or does it plan to in the future?
AK: When I talk about the three-legged stool, Kristen, diligence on clients, the plan, the pie, the proficiency of the advisors, ultimately this is tethered to what we can achieve for our clients, and how we position our advisors to achieve that for our clients. Part of this role is to provide clarity to clients about what they can expect, clarity to clients about how the advice they received was suitable and that we have delivered to clients what they hired us for. I don’t know how our peers are approaching this, but I sort of think of this in terms of the client, to say, hey, what did they expect, is the advice suitable and did we deliver what they hired us for. You made a point about performance, which can mean so many different things to a client. Some will want to have control, some will want to have flexibility, some want to have freedom, some want to have cash flow.
WM: Some critics say there are still separate cultures within Wells Fargo Advisors. The legacy A.G. Edwards advisors and the Wachovia folks. This is always a problem at firms that are cobbled together over time, but do you think these distinct cultures need to be integrated into one, or is it ok that they remain separate. Do you even believe that they do remain separate?
AK: I have the benefit of being both an outsider and an insider. I spent ten years at Booz before I came here. What I would say is our most distinct advantage is our client-centered culture, in almost all the decisions we make around here. That is the one lens we look through to make a tough decision or any decision.