Wells Fargo has made its recruiting packages more generous than ever. The current deals on the street reflect Wells Fargo giving brokers with Trailing 12-month production (“T12”) exceeding $500,000 upfront forgivable loans that equal two times the previous year’s T12. The total value of some of these deals if the onboarding broker achieves back end bonuses of revenue and asset targets can exceed 325%.
The new deals Wells Fargo is offering resemble those that wirehouses such as Merrill Lynch, Morgan Stanley, and UBS used to make, during the peak of recruiting frenzies. Many firms have since scaled back on these expensive deals, due to the weight of forgivable-loan debt on their balance sheets and questions regarding the net return on such expensive broker book acquisitions.
Wells Fargo ended 2018 with approximately 13,970 brokers across its Private Client Group, branch bank group, and independent channel. Many brokers have been leaving Wells Fargo, possibly due to reputational issues affecting client’s perception of the banks abilities and platform.