Wells Fargo announced plans this week to sell its asset management unit, Wells Fargo Asset Management, to GTCR LLC and Reverence Capital Partners for $2.1 billion.
But the firm assured its 12,600 advisors that its investment and wealth management unit (WIM) would continue to work closely with the asset manager and that nothing would change for them or their clients invested with Wells Fargo Asset Management products, according to a memo to advisors obtained by WealthManagement.com.
“Through this new partnership, WFAM will be even better positioned to execute our strategy and provide our clients with innovative solutions to help them reach their investment goals,” wrote Jim Hays, head of Wells Fargo Advisors, and Nico Marais, CEO of Wells Fargo Asset Management. “As one of our largest fund partners and our largest separately-managed account (SMA) manager across WIM, we already collectively serve over $100 billion of client assets. We look forward to continuing to expand the relationship moving forward and working closely together to serve WIM clients.”
When asked whether any compensation arrangements change for advisors because of the WFAM deal, spokesman Robert Julavits said everything would remain the same.
The memo also said Wells Fargo Asset Management would continue to be the exclusive provider of a popular rising-dividend-equity strategy, called the Managed Diversified Stock Income Plan, to Wells Fargo Advisors.
The DSIP is a preselected, diversified, regularly reviewed list of stocks with attractive yields and are likely to consistently raise their annual dividends. The Managed DSIP Portfolio consists of about 50 stocks that represent the best of that list. In addition, the memo pointed out that the firm plans to expand the DSIP suite this year to include international DSIP and ESG DSIP offerings.
The asset manager will also continue to exclusively provide the Income Multi-Asset Portfolio (IMAP), an SMA that invests in 30 to 50 individual securities across multiple asset classes, and the Current Equity Income SMA.
There will be no changes to these strategies’ availability, fees or minimums, the memo said.
The memo also said WFAM’s existing approved and recommended strategies remain in good standing and available for purchase.
“We view the acquisition of WFAM by GTCR and Reverence Capital as positive for the future growth and investment in WFAM’s capabilities and investment teams,” the memo said. “The transaction does not affect WFAM’s current standings on the WIM platform and its products remain open for purchase. Global Manager Research will continue to cover and monitor WFAM’s strategies going forward, just as it does today.”
