Advisers spar with Wells Fargo over growth award bonus program
Bank Investment Consultant
Two law firms are pursuing FINRA arbitration claims on behalf of former Wells Fargo advisers who say they were cheated out of their “growth award” bonuses.
The firms claim the bank engaged in patterns of conduct to deprive advisers of the bonus program it created to reward them for meeting revenue growth targets.
Some advisers were terminated for minor infractions just before the bonus awards were due to be paid, says Philip Aidikoff, a partner with Beverly Hills-based Aidikoff Uhl & Bakhtiari. Others, he contends, were given the bonus only to be fired shortly after and asked to return the money. Still others experienced working conditions that led them to quit and lose the bonus and other incentive compensation, Aidikoff says.
“What we see is a pattern of employees being not treated the way that they’re supposed to be in accordance with good business practices and honesty,” says Aidikoff.
Helen Bow, a spokeswoman for Wells Fargo Advisors, declined to comment on the allegations.
Aidikoff says that his firm and a partner Los Angeles firm, the law offices of Patrick R. Mahoney, are representing eight to 10 advisers. FINRA arbitration hearings have been scheduled, according to Aidikoff.
The firm has also spoken to dozens of other advisers who are considering whether to pursue arbitrations, says Ryan Bakhtiari, another partner at Aidikoff Uhl & Bakhtiari.
Aidikoff says his firm received a call a little more than a year ago from two former advisers who worked in the same branch. Shortly after, they received another call from an adviser who worked in a different state.
As a result of the calls, Aidikoff began talking to former employees of the bank and its broker-dealer arm. “We started learning that in fact this was known in the management community at the bank that this was going on,” Aidikoff says.
On its website, the firms provide details of what they describe as an “investigation” into the issues surrounding the Wells Fargo bonus program. They are looking into possible tactics the bank may have employed to limit or prevent its advisers from earning the bonus, such as adding new requirements that would disqualify advisers from the award.
The bank developed the program to keep advisers from leaving for rival firms, according to the website. Advisers qualified for the award if they grew their revenue by 15% in a least one year during the four-year period between Jan. 1, 2012, and Dec. 31, 2015.
The firms contend that the bank significantly underestimated the amount of money it would have to pay in growth award bonuses because many more advisers were on track to become eligible than anticipated.