Wells Fargo Retains Advisors by Letting Them Join FiNet

Wells Fargo has kept hundreds of advisors within its firm by allowing employee advisors to transfer into Wells Fargo Advisors Financial Network, or FiNet, its independent-contractor channel. Data from tracking firm AdvizorPro show just over 1,400 registered representatives made that internal move from the bank’s two employee channels over the past four years, with 329 transfers in the most recent year.

FiNet is the firm’s unit for advisors who operate as independent contractors. John Tyers, president of FiNet, noted the channel draws interest from advisors who want to launch, grow or expand independent practices and that it offers an internal path to independence.

Recruiting specialists say the in-house option reduces several frictions that typically arise when advisors leave a wirehouse to join an outside independent broker-dealer. Phil Waxelbaum, founder of Masada Consulting, explained transfers to FiNet avoid client solicitation by the former employer, permit accounts to retain existing numbers and cut the paperwork that often accompanies a firm change.

AdvizorPro’s tally covers registered representatives, a category that includes some non-client-facing staff, so the number does not equal a pure advisor headcount. Still, the more than 300 internal transfers in a single year occurred as the industry saw roughly 11,000 experienced advisors change firms in that same period.

Wells Fargo accepts a trade-off by operating an internal independent channel. Employee advisors typically generate revenue that the firm retains while the firm provides office space, benefits and administrative support. Independent contractors generally keep a larger share of revenue but take on more business expenses.

Ron Edde, president and CEO of Millennium Career Advisors, listed costs advisors assume after moving to independence: health insurance, unemployment insurance, software licensing fees, rent and administrative staff. He said those expenses shift from the firm to the advisor after a change in status.

Another factor influencing moves to FiNet is recruiting-loan repayment. Advisors who received signing loans to join Wells Fargo’s employee channels often face repayment obligations if they leave early; moving from an employee channel to FiNet within the same firm typically avoids that repayment trigger.

FiNet’s origins trace in part to Wells Fargo’s 2008 purchase of Wachovia, which included an existing independent-advisor network. Wells Fargo reports about 12,000 advisors overall but does not publish a headcount specifically for its independent division.

Some competitors maintain mixed models. Regional firms such as Raymond James and Ameriprise have long operated both employee and independent channels. Other firms have reduced or sold parts of multi-channel operations; Stifel sold its independent advisors unit earlier this year.

Industry participants say movement flows in both directions. Brian Mora of Ameriprise noted some advisors return from independent status to employee platforms when they want to offload business operations and regain firm-provided support. Research firms project growth for registered investment advisors and independent broker-dealers in coming years and forecast a decline in wirehouse headcounts by 2028.