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Wells Fargo Increases Minimum Ticket Size on Equities Trades

Wells Fargo Increases Minimum Ticket Size on Equities Trades

Wells Fargo Advisors' compensation plan for advisors remains relatively stable going in to 2015, but it has increased the minimum ticket size for its advisors to get paid on equity transactions to $125 from $95 last year and made it easier or advisors to hit goals toward a deferred compensation plan.

Last year, the firm laid out three areas where hitting certain goals would make an advisor eligible for the deferred compensation plan, including net new flows to the advisory business, lending credits and adding new clients. This year, the firm lowered the bar slightly, and an advisor will be rewarded for hitting just one of the three; the rewards will still scale higher if they hit more.

The other change is increasing the minimum ticket size for advisors to get paid on equity transactions to $125.

“That is not a big deal because probably at least 98 percent of commissionable trades done by all the FAs at Wells Fargo are above $125 anyways,” said Rick Rummage, an industry recruiter and founder of The Rummage Group.

Advisors can still discount ticket charges to $55, the firm said, but the FA just won’t get a payout on those transactions. Rummage believes the change in the minimum doesn’t apply to the majority of advisors, who are either running equity trades in a fee-based account or whose client transactions bring the commission above the $125 threshold. Ticket sizes are typically between 1 to 3 percent of the money invested, Rummage said. 

“The overall theme here is they are encouraging advisors to do more advisory business and less commissionable business,” Rummage said. “What most firms are doing is steering advisors toward more advisory business, and the reason they are is because it’s more predictable from a revenue stream standpoint and it’s less litigious.”

In the 2015 plan, Wells Fargo makes no changes to its three hurdles or its payout rates. In its “growth” hurdle, advisors will earn 22 percent on the first $13,250 in revenue per month. Anything over that, they’ll get 50 percent payout. For “premier growth” advisors, those who achieve any one of six levers that the firm has laid out, the hurdle is lowered to $12,500. For “premier plus” advisors, the hurdle is lowered to $11,500. These are advisors who achieve high performance, one client experience lever and one growth lever.

Wells Fargo also added a length of service component; FAs who have been at the firm for 15 years or more will get 0.5 basis points. Advisors with between $500,000 and $850,000 that were not premier advisors are also now eligible for a base award.

Previously, Wells Fargo gave an award to FAs who grew their practice 15 percent. But now advisors who grow 10 to 14.99 percent will also get an award.  

Lastly, the firm tweaked its FA estate protection program. The program was previously just for teams, but this year it’s being expanded to cover solo practitioners as well. 

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