Wells Fargo's brokerage ranks shrank again, dropping by 258 advisors from the year-ago period and suggesting that its advisor attrition problems are not yet over.
Meanwhile scandals on the bank side have drawn regulatory fines and ongoing scrutiny. Wells Fargo recently disclosed that its board was investigating alleged problems with its sales culture on the wealth management side of the business.
On Friday, Wells Fargo warned shareholders that it may have to take a charge of as much as $1 billion to settle a U.S. probe of its consumer banking business led by the Consumer Financial Protection Bureau and Office of the Comptroller of the Currency.
On the wealth management side, Wells Fargo's overall headcount fell to 14,399 from 14,657 from the year-ago period. The wealth management business includes wirehouse, bank-based and independent advisors.
Recruiting new talent is a top priority for the firm and advisor productivity is up, a spokeswoman says.
"This is directly related to our investments in best-practice resources for experienced advisors as well as training and succession programs for the next generation of advisors. We continue to take a disciplined recruiting approach and it’s working. We feel no need to focus on raw headcount numbers," the spokeswoman said in a statement.
While headcount was down, profits were up. The firm’s wealth and investment management business reported net income rose 7% year-over-year to $714 million, driven higher in part by falling income tax expenses. Client assets of $1.6 trillion were up 4% and advisory assets of $540 billion were up 10%. Higher market valuations and positive net flows boosted asset levels, the firm said.