Wachovia agreed to sell itself to Wells Fargo & Co. last fall (see “Wachovia Leaves Citigroup at the Altar’). Wachovia brokers felt an “initial shock’ Friday when told that they wouldn’t be receiving a retention bonus from Wells Fargo—but Wachovia Spokesman Tony Mattera told PLANADVISER.com that was only the first part of the story. The firm is telling advisers this week that they will have better financial incentives through Wachovia’s client retention program, 4Front, which implements step-by-step best practices for a client.
Previously, financial advisers were paid after completing every step in the 4Front model. Now, the program has been changed by paying the financial advisers as they execute each step of the model.
Mattera said Wachovia decided the approach is a better way than a “conventional bonus,’ given the current financial environment, in which client portfolios are struggling. He said it puts the needs of clients first, and rewards advisers for doing that. “If the broker does this [program], they can earn substantial incremental income just by doing these things for their client, and we think that’s a better way right now to make this a better place to stay,’ Mattera said.
He said advisers can bring in more business using the 4Front program, and that brokers who use the program grow their revenue more than double than those who don’t.
Mattera also said the firm nixed the idea of a retention bonus because traditionally it is given because a move disrupts the adviser’s practice, as was the case when Wachovia acquired A.G. Edwards (see “Wachovia to Acquire A.G. Edwards’). Wachovia brokers won’t be moving to a new platform, and their business will remain relatively unchanged, Mattera said.
When asked about the risk of advisers jumping ship, Mattera said he thinks Wachovia will still look good. “This is a pretty tumultuous environment….In relative terms, we have a strong, stable parent, and we’re not going through upheaval right now,’ he said.
It was also announced that Wachovia Securities will be renamed Wells Fargo Advisers in May, according to reports.
Merrill Lynch offered retention bonuses that favored higher producers after its sale to Bank of America (see “BoA, Merrill Retention Package Rewards Top Producers“). Morgan Stanley Friday announced bonuses to Morgan Stanley and Smith Barney top-producing brokers of as much as 105% of their annual production to stay on at Morgan Stanley Smith Barney (see “Morgan Stanley to Reward Top Producers“), according to news reports.