Danny Ludeman, longtime chief of Wells Fargo Advisors (WFA), is set to retire at the end of this month. Mary Mack, 28-year veteran and current head of the firm’s financial services group, will replace him. The impending change, announced in September, has some advisors and branch managers concerned about the future of the firm’s corporate culture and morale, as Ludeman is widely viewed to be the last “advisor advocate” in senior management at the bank-owned firm.

Ludeman, 56, spent 34 years helping to build what is now WFA, with 15,000 advisors and more than $1 trillion in client assets. He served as executive vice president and head of WFA since the Wachovia merger in 2008. Prior to that he led Wachovia Securities for nearly ten years, and held key leadership roles at Wheat First Securities before First Union/Wachovia acquired that firm. He has overseen numerous successful mergers, creating a nationwide financial advisor sales force with a focus on client advice and planning.

"Under Danny's leadership, we have created a premier brokerage and advisory firm whose success is based on offering clients advice and planning through multiple channels, in brokerage offices, retail bank stores, or online," said David M. Carroll, head of Wells Fargo's Wealth, Brokerage and Retirement business, in a statement in September. "His many contributions to Wells Fargo, his commitment to our communities across the country, and his strong dedication to the client will be missed.”

Interviewing several current advisors at WFA, all of whom requested anonymity for fear of professional reprisal, many think that sentiment doesn’t go far enough.

“Danny Ludeman was the only guy in top management that had a broker's mentality,” said one advisor. “A lot of employees say he was the only thing still going for the firm—the only person interested in protecting the brokers and resisting the bank.”   

While Mack, who’d previously been responsible for WFA's advisory products, lending and banking services, advisor development and recruiting and integration, “is very bright and interesting,” says another WFA advisor, “it bothers us that she’s from the bank side. All management has left are bankers.

“She’s the Manchurian Candidate,” he continues, “and, we’re afraid of how this is going to be felt. A bank’s objective is to push lending products down the throat of the advisors to the point that, in some cases, advisors can’t hit certain bogey levels without reaching the goals that the bank has set. Lending capabilities can be a good thing, but not when they become a ‘must’.”

Raschelle Burton, a spokesperson for WFA, says those fears are baseless. “I can understand some people feeling anxious in this time of change. But it is important to note that we are operating in the same model as we have been for years. We’ve been operating as part of a bank-owned holding company for longer than anyone in the business and we’ve been doing it more successfully. So I don’t anticipate any major deviation in our strategy anytime soon.  

“We don’t push proprietary products over any others,” she continued.  “In fact we operate in an open architecture model and are careful to ensure that there is no conflict, and it is important to note that we are not about selling.  We are about advice, we start with a plan and recommend solutions based on client need.  So, for example, if a client comes to us and in the course of creating a plan we see that he or she could benefit from—such as a lower-cost mortgage, we will recommend that. “

Still, some fear recruiting new FAs may become more difficult for the firm’s branch office managers. “Recruiting intentions will be the same,” says Rick Peterson, who heads Spring, TX-based industry recruiting firm Rick Peterson & Associates. “But, this change in leadership could significantly affect the attitude of the local managers who do the recruiting, especially when they have to discuss the involvement of the ‘bank’ in their traditional business and in compensation.”

Some insiders feel that, as a broker’s advocate, Ludeman was being ‘run out’ for a number of years.

“Wells’ Private Client Group is the growth engine for the whole enterprise,” said one WFA office manager who requested anonymity. “The only real way to grow is for the banking side to cross-sell products and services.”

“It was in the early ‘90s, with the advent of the mega-mergers like Travelers/Shearson/ Smith Barney and Morgan Stanley/Dean Witter, that I think senior management lost sight of what was important to advisors and their clients,” says Glenn Fischer, head of New York Wealth Management (Raymond James Financial) in Garden City, NY, and a former Smith Barney branch office manager. “They believed it was no longer necessary to have management that came from the rank and file. Everything was about cutting expenses and increasing profits, at any cost. It seemed that little thought went into how it would affect advisors, and whether they’d still have the tools they needed to service clients properly. That took a toll on loyalty and morale and caused a lot of attrition.

“I think Wells advisors are right to be concerned that they’ve lost Ludeman,” he continues. “It was the same at Citi-Smith Barney and Bank America-Merrill Lynch when they lost Sally Krawchek, who was also a true advocate of for the advisors.”

While any successful broker-dealer must keep expenses in check, Fischer continues, “this must be done with plenty of thought as to the end result for its advisors and clients. If it is, company shareholders will be rewarded as well.”

That’s not the case at WFA, insists another of the firm’s branch managers, who also did not want to be identified. “It’s no coincidence that the same month Ludeman announced he’d be retiring, Wells Fargo also announced it was going to eliminate third-quarter branch office managers’ bonuses across the board. That amounts to about 25 to 30 percent of our annual earnings,” he says. “We were supposed to have gotten that check at the end of November.”

WFA spokeswoman Rachelle Rowe said branch manager pay communications took place Aug. 7, 2013, while Ludeman announced his retirement Sept. 27.

The bonus cut came a time of record profitability for the firm, the office manager continued. “And, branch managers here are just waiting for them to decide to cut another 25%. They have us over a barrel. There’s nowhere else to go. The industry is shrinking. And, while reps used to follow managers they liked, they are so tied up by retention packages these days that they can’t.”

Another branch office manager says this could wind up being beneficial for regional and independent firms whose names weren’t tainted by recent financial scandals. “Now is a time for others to really benefit. UBS and RBC have been hiring good managers away from the wires by offering upfront money. And I think they’ll be doing the same with top advisors.”