Wells Fargo Steps Right Up in Compensation ‘Carnival Game’
Wells Fargo is latest to tweak 2015 awards for advisors, making them more complex
Financial advisors at the wirehouse firms are facing more complex compensation plans in 2015, compensation experts say.
“It is becoming close to being like a carnival game – you have to knock down three cans to get the top-shelf prize,” said Andy Tasnady of Tasnady Associates in Port Washington, New York, in an interview.
“Overall, the [wirehouse] plans are getting more complex, especially around deferred bonuses,” Tasnady explained. “There are sharply designed combinations for shaping awards and associated behaviors – with lots of curves and combinations.”
In general, the core pay grids are not being tweaked very much, he notes.
New for 2015 are adjustments to the hurdles. Advisors can lower the 22% compensation hurdle they have to jump over by achieving other objectives, such as revenue growth of 15% or $150,000.
Also, advisors can boost their client-experience results by having 60% of client assets in fee-based advisory accounts or 80% of their monthly fees and commissions tied to fee-based advisory accounts. In addition, lending credits of $6,000 and up will give them higher client-experience results.
As for deferred compensation, Wells Fargo says it has eliminated the rule that advisors have to hit two of three or three of three best-practice goals in order to qualify for best-practice awards. However, advisors can get a bigger best-practice award if they meet all three targets.
Advisors in the $350,000-$499,000 production tier, for instance, can earn $5,000 when they bring in $5 million in net new fee-based advisory flows. They can also receive $5,000 for hitting $6,000 in lending credits and $5,000 for net new assets of $5 million and up. But if reps achieves all three of these best-practice goals, their best-practice award jumps to $25,000.