The network, also called FiNet, hired 152 advisors last year, its second best recruiting year since that business was launched 11 years ago, according to Wells Fargo. The pace of recruiting was second only to 2009, when advisors transitioned at a record pace immediately following the financial crisis. In addition, FiNet added 67 new independent practices in 2012, bringing its total number of practices to 561. The FiNet business currently has 1,167 advisors and $63.4 billion in client assets.
The choices that the FiNet business offers, from how to market a business to who to hire, also serve as a litmus test for prospective financial advisor hires as to whether they’re ready to go independent, Wells Fargo Advisors Financial Network President Kent Christian said in an interview Monday at the Investment Management Consultants Association’s New York Consultants Conference.
“For some folks, they hear that and they’re completely energized by it,” Christian said of the responsibilities that come with running an independent practice, while other advisors are not. “During the recruitment process, those are things that we’re listening for and probing.”
More than half of the advisors who joined FiNet last year came from wirehouse firms, according to Christian. Those rival firms, which include Merrill Lynch, Morgan Stanley and UBS, do not offer a multi-channel structure where advisors can practice independently. By contrast, last year Wells Fargo transitioned about 40 of its own advisors to its independent model. Other new advisor hires came to FiNet from regional wealth management firms, Christian said, followed by advisors from other independent wealth management models.
The financial advisors who join FiNet typically have an average industry length of service of 19 to 20 years and about $60 million in assets under management and $594,000 in gross revenue.
“They’re a long way from startup,” Christian said of FiNet’s recruits. “We’re frankly aren’t interested in folks that are starting up. There’s too much risk, there’s too much distraction for them to do that and to be independent, so we want to make sure they’re focused on that.”
Other advisors that FiNet also shies away from hiring are the ones who are on the brink of retirement. “We like folks that are thinking about retirement and succession planning, but they might be five to 15 years away from that,” Christian said.
For Christian, who was named to the helm of FiNet six months ago and has served at Wells Fargo for seven years, the appeal of the firm’s independent model for financial advisors now comes down to three reasons: the cachet that practicing independently now has with successful financial advisors; the strong technology platform that FiNet is able to offer that rivals what even the largest wirehouse firms can offer; and the opportunity to operate truly independently with access to Wells Fargo’s resources.
Those sentiments, combined with the industry changes successful advisors have seen in recent years—from terminated managers to lackluster technology—should continue to help FiNet keep up its hiring momentum, according to Christian.
“More advisors, and specifically more wirehouse advisors, are interested in talking than we’ve ever seen,” Christian said. “So our pipeline going into ’13 remains very robust.”