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Archive for the ‘Wells Fargo Growth Award’ Category

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.


Wells Fargo Advisors unveils new bonus plan for brokers

In an effort to get its advisers to focus on snagging more of their existing clients’ assets, along with new clients, Wells Fargo Advisors LLC has introduced a new rewards program in its deferred-compensation plan.

Until Jan. 1, the firm’s 12,000 advisers were eligible for a bonus based on growth in revenue. Now the bonus will be based on bringing in new assets. “The focus for this coming year is organic growth and incentivizing FAs for their expertise in gathering assets from new and existing clients,” said Wells Fargo Advisors spokeswoman Teresa Dougherty. “This complements the base award that is production based and the recurring revenue award.” The minimum amount of net new assets to qualify for this award is $500,000, and the incentive is 2 percent of an adviser’s total revenue.

The award is also partially based on the tenure of the adviser. For example, said Ms. Dougherty, an adviser with seven years at the firm who brings in $600,000 in revenue and $750,000 in net new assets would receive a bonus of 2% on that $600,000, or $12,000. Wells Fargo is following the lead of larger broker-dealers that are rewarding their advisers based on new assets instead of growth in revenue, said Danny Sarch, president of Leitner Sarch Consultants. “New assets is the mantra going on in the retail brokerage firm arena,” he said. Broker-dealers have to focus their advisers on grabbing new assets because there are only so many millionaires out there, said Rick Peterson, a recruiter who has an eponymous Houston firm. “It’s going to be a struggle for these firms to grow their businesses going forward, because we have fewer people who technically qualify for high-net-worth society and we have just as many brokers going after that same delta,” Mr. Peterson said.

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