Wells Fargo turns the breakaway into a recruiting channel

Wells Fargo spent the years after the fake-accounts scandal watching its own advisers leave in waves; this year, independent advisers have deposited $17 billion in client assets onto its platform and new full-time hires have added another $24 billion. The bank that was once a recruiting target is now selling the exit it once feared.

The recruits who drive that number work outside the W-2, using Wells Fargo's compliance, research, and consumer lending while keeping their independence and their books. Barry Sommers, who joined in 2020 to revamp the wealth management business, has made that arrangement the centerpiece of the franchise, and high-end producers are taking it seriously.

Gianluca Palermo, a managing partner at Infinity Private Wealth on Long Island, left Bank of America earlier this year with $1.8 billion in client assets; James Taylor brought a team and nearly $6 billion from Morgan Stanley in May. Together, those two books represent close to half of the $17 billion independent advisers have brought in this year.

Palermo's account of the arrangement reads like the recruiting brochure: "I have all the tools at my disposal," he told WealthManagement.com, "but nobody is telling me what to do with my clients." The promise is autonomy without the operational burden of starting an RIA—no custody negotiations, no technology build, no payroll for a back office.

Taylor, who praised Wells for "skating to where the puck's going," said the bank offered a spot where he would not have to change firms again if he later chose full independence. Wells Fargo is positioning itself as the last platform an adviser will ever need, and the economics support the pitch: a $2.4 trillion wealth business gives it scale, while its commercial banking arm supplies lending, mortgages, and trust services that a breakaway RIA would otherwise have to source on its own.

That positioning is the work of Sommers, recruited by CEO Charlie Scharf in 2020 from their shared history at JPMorgan. Rather than fight the movement toward independence, Sommers set out to make it easier for advisers to run their own shops on the bank's platform, a strategy backed by the $1.5 billion revamp WealthManagement.com reported. The shift came after Wells Fargo's reputation had been battered by the fake-accounts scandal, the Federal Reserve had capped its asset growth for years, and thousands of advisers had left; the Fed lifted the cap last year, but by then the firm was on the losing side of recruiting.

Sol Gindi, head of Wells Fargo Advisors, says the firm is now "at a fraction of the attrition" of five or six years ago. Earlier this summer, two veteran Wells Fargo teams took $580 million to Ameriprise and Janney, PWD's tracking shows, but the larger flows are running in the other direction: Palermo and Taylor alone brought $7.8 billion, more than ten times what those departing teams took.

Morgan Stanley's $8 trillion book and Bank of America remain formidable competitors, but the fight has expanded to the entire independent custody and platform universe. LPL's recruitment of a Wells Fargo technology chief for its Latitude platform earlier this month shows how fiercely the platform arms race is being waged, and Wells Fargo is spending to be the destination advisers choose.

The combined $41 billion in new assets this year—$17 billion from independents and $24 billion from full-time hires—is a sliver of Wells Fargo's $2.4 trillion book but a meaningful one. Morgan Stanley still dwarfs the figure, but the platform now determines where advisers land. The next downturn will show whether a $1.5 billion revamp and $17 billion in independent inflows are sticky enough to keep them.