ORLANDO, Fla. -- Wells Fargo Advisors Financial Network President Kent Christian sat down with On Wall Street at IMCA's annual conference to discuss the wirehouse's independent brokerage arm's recruiting practices and the newly announced DoL fiduciary rule.
FiNet had a big recruiting year in 2015, bringing in 102 financial advisors in 79 new practices. How does FiNet identify possible recruits?
I'm very proud of the results we've achieved in recruiting and that we're seeing for 2016. We're off to a terrific start. The types of advisor we're looking for from a cultural standpoint is the higher-end advisor who is serious about independence. They're serious about independence because they see it as an important next step in the way they work with their clients. This is someone who isn’t running from something, but instead seeks [that] independence, control, flexibility, and the opportunity to better serve clients in a personalized and unique way.
Do you turn away candidates that may not be a good fit?
Independence isn't for everyone -- not everyone is quite frankly qualified, if you will, to affiliate with a firm like FiNet. Having the strength of a large, full-service firm behind us along with the ability to own and operate your business doesn’t always align with everyone’s definition of independence.
We think that we're selective in that regard, but that said, we are very gratified by the pipeline of advisors who are interested in affiliation, talking to us, learning more about the firm, kicking the tire if you will about the firm. That pipeline is bigger than it's ever been in our 15-year history.
We think that's the result of a combination of the success that folks see. They have perhaps, former colleagues and friends who are at FiNet. They hear from us, they find us and listen to our story and parts of our value proposition that make sense for them, it's really fed upon itself. We've got great momentum as it says and knocking wood a little bit we hope it continues. We think it will.
How do you help candidates decide whether they should join the employee side of Wells Fargo, or go with FiNet?
For plenty of folks who are thinking about changing firms and deciding between going independent or employee, what they've decided first is they're leaving where they are in most cases. So there are different parts of that decision-making process that are critical for each [individual] advisor.
I say regularly that the biggest decision that they're making is whether or not they choose independence. It's a different business model. They're going to have more flexibility, more autonomy. If they come to FiNet, they'll be affiliated with a great firm and a great platform. But that decision "hey, I'm going to do more things on my own and take on that additional responsibility but reap the benefits of that," that's the bigger decision.
We almost act like consultants when we're talking this through - trying to tease out from them, if they don't already know, what are the things they are looking for? What are the things that are most important to day with the way they run their practice? What do they see their practice looking like 3, 5, 10 years from now? The types of questions we ask and the answers we hear generally guide advisors--and us--to whether or not independence makes sense or if they're better off remaining in an employee model.
How do you see the new fiduciary rule changing the industry and the way FiNet does business moving forward?
I think it will precipitate some big change. I think most of it is going to be positive. The starting point around treating clients with their best interest in mind is the right way to think about client care. That's a great place to start. Having said that, we're still working through the particulars of the 1,023 page rule. The good news for a firm like Wells Fargo is we feel that the rule is directionally right. We were happy to see that they listened and gave the industry more time. Because there's so much change there's a lot of work to do.
My advice to our advisors at FiNet was be prepared for change. They already know how to act generally in a fiduciary way because of the advisory work that our advisors already do. But this introduces new elements to that, an added dimension that is going to require change. We're hopeful that there's a way for clients who are looking for advice on their IRA that they continue to have the kind of choice that they want and deserve.
I think people need to get a firm grasp about what it means to be a fiduciary under THIS rule. There are certain elements that firms and advisors just need to make sure they're on top of. How do we pursue business inside the best interest contract exemption? That's where most of the change will take place. The net effect of that is will advisors and their clients still have the same choices they have today? Will those choices change or possibly narrow? I think an unintended outcome could be a narrowing of options. We hope that isn't the case, but we'll see as things unfold.
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