Wells Fargo restructured its wealth management division on Wednesday, adding its asset management unit to the mix. Overall, the wealth business reported a 10 percent gain in profits during the third quarter, but shed over 160 advisors.
In the firm’s earnings report, the San Francisco-based bank stated that it moved its asset management business out of Wholesale Banking and into the newly christened Wealth and Investment Management unit (formerly Wealth, Brokerage and Retirement division).
The bank also realigned its re-insurance business and strategic auto investment, taking the businesses out of wealth management and community banking, respectively, and categorizing them as part of the wholesale banking business.
“The name of the division was changed effective today,” spokesman Tony Mattera said. “Wealth and investment management business now includes wealth management, retail brokerage, retirement and asset management. The name change is just a reflection of that move.”
Mattera noted that there were no external branding changes, adding that Wells Fargo Advisors will not change. As part of the new structure, performance results of Wells Fargo Advisors, the Private Bank, Abbot Downing, Wells Fargo Institutional Retirement and Trust and Wells Fargo Asset Management will all be reported under the Wealth and Investment Management division.
Here are the highlights:
- Wealth and Investment Management reported a net income of $606 million, up 3 percent from the previous quarter and 10 percent from the prior year.
- Revenues for the new division hit $3.9 billion, remaining flat year-over-year, but declining roughly 2 percent from prior quarter. The firm noted the quarterly decline was primarily driven by lower gains on deferred compensation plan investments, and lower asset-based fees and transaction revenue.
- St. Louis-based Wells Fargo Advisors reported client assets of $1.4 trillion, down 4 percent from prior year. Managed account assets for the third quarter were $409 billion, essentially flat compared to a year ago.
- The retail brokerage unit shed 163 advisors, ending the third quarter with 14,988 reps.
- The brokerage and wealth cross-sell ratio continued to increase, hitting 10.52 products per household, up from 10.44 a year ago.