For Wells Fargo & Co. — a new regional wealth management structure and continuing merger and acquisition buzz surrounding the firm — could shift its role in the industry.

The changes come as Wells Fargo is set to mark the three-year anniversary of its acquisition of Wachovia Corp., later this year. The firm cited the ongoing integration as reason for reducing its regional offices from 12 to seven in May. The firm is also on the hunt for possible acquisitions, in what Wells Fargo Chief Executive John Stumpf called "sub-optimized" wealth management businesses.

The moves at Wells Fargo is indicative of the latest activity among major wirehouse firms in their quest for a new post- financial crisis identity. In some cases, that has also led to a shift in leadership ranks.

Most recently, Bank of America's Merrill Lynch wealth management division President, Sallie Krawcheck, named John Thiel as the new head of the firm's U.S. wealth management business in April. Thiel replaces Lyle LaMothe, who announced his plans to step down from that position in March. Thiel's appointment was also seen as a nod to Merrill Lynch's business.

Morgan Stanley Smith Barney, which has reached the two-year anniversary of the purchase of the Smith Barney business from Citigroup Inc., named Greg Fleming president of global wealth management in January. Fleming added to the leadership ranks in April, with the appointment of former JPMorgan executive, Jeff Hack, to serve as chief operating officer.

Like those changes, Wells Fargo's regional changes mark a continuing evolution as the firm moves forward from the Wachovia merger.

"This new organizational structure...will allow us to realize the efficiencies of the merger with Wachovia and enable us to focus more resources closer to our clients, as we continue to execute our core business model," Wells Fargo spokesman Vince Scanlon says in a statement.

With the creation of the seven new wealth management regions and coinciding regional manager appointments, the Northeast now includes Connecticut, Delaware, Massachusetts, New Jersey, New York and Pennsylvania. That region will be led by John Dowd.

The Mid-Atlantic region — which includes Maryland, North Carolina, South Carolina, Virginia and Washington, D.C. — will be led by Jeff Hartman.

Greg Bronstein will head up the Southeast region, which includes Alabama, Florida, Georgia, Mississippi and Tennessee.

The Great Lakes region, which contains Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, Ohio, South Dakota, North Dakota and Wisconsin, will be led by Tim Traudt.

John Duchala will head the firm's Southwest region-Arizona, Nevada, New Mexico, Oklahoma and Texas.

The Mountain Northwest — Alaska, Colorado, Idaho, Montana, Oregon, Utah, Washington and Wyoming — will be led by Jeff Grubb. And the California region — which includes Hawaii — will be headed up by Joe DeFur.

Scanlon declined to name the five regional managers that were displaced, but said that they were seeking new positions both in Wells Fargo and outside of the firm.

"I think the cutting of the operating regions is almost exclusively a cost-cutting move," says Bing Waldert, director at Boston-based financial services research firm Cerulli Associates. "Because they're highly compensated employees, if you're going to look to reduce your costs, you can do it quicker [by eliminating] more expensive people."

Looking for More

According to reports from Bloomberg, in Stumpf's address at Goldman Sachs' investor conference last December, the company's streamlining also triggered interest in more potential purchases to boost its "sub-optimized" wealth management business.

Since then, there has been speculation that UBS' Wealth Management Americas business — with its 6,811 financial advisors and $112 million in invested assets per financial advisor as of the end of the first quarter — could provide a substantial boost to Wells Fargo. A potential deal struck between the two would also make Wells Fargo the largest wirehouse.

That merger/acquisition speculation took another turn in May amid new reports that it could seek to sell its H.D. Vest Financial Services brokerage and tax advisory business.

Cerulli's Waldert notes that shedding that business would makes sense, as it would also result in shedding a lot of infrastructure. He added that H.D. Vest's advisor force is often part-time and has less production.

Wells Fargo declined to comment on the speculation, and H.D. Vest did not respond to a request for comment. UBS, however, continues to maintain that it has no interest in selling its U.S. wealth management business.

"WMA (Wealth Management Americas) is not for sale," says UBS spokeswoman Allison Chin-Leong. "There are considerable synergies with the other business divisions. UBS AG set out our strategy in November 2009 and this remains the focus of the Group Executive Board, the Board of Directors and UBS employees. This strategy is one which relies on all current business divisions with an emphasis on improved integration."

Doth Protest Too Much?

Despite those denials, the UBS rumors still have legs.

According to a May 13 equity research report by Keefe, Bruyette & Woods, Wells Fargo could easily complete a $6 billion acquisition. Authors of the report added that they would not be surprised to see the firm do a deal for as much as $10 billion to $20 billion. The most likely targets would likely include brokers and wealth managers, insurance brokers and lenders for credit cards, commercial and student loans.

"We would view an acquisition of UBS WM Americas (formerly Paine Webber) as one of the best fits within Wells' long-term expansion strategy," the report from KBW analysts Frederick Cannon and Brian Kleinhanzl states.

Charles "Chip" Roame, the managing principal of Tiburon Strategic Advisors believes a Wells Fargo/UBS deal makes sense, particularly as UBS faces larger competitors with two to three times the number of financial advisors. But with the highest assets and revenue per advisor, Roame says, the business would make a great acquisition.

"The U.S. wealth management business is not perceived as a high growth market relative to numerous other markets where UBS is present," Roame says.

But if a merger deal came after UBS was so active in recruiting away from large firms in late 2008 and 2009, many advisors who joined then would be unhappy to become part of a more massive firm with a more diverse advisor force put together by acquisitions, Waldert says.

"That advisor who is maybe two years into a nine-year recruiting deal and was sold one thing, and then gets something completely different is not going to be happy," Waldert says. "Think of the Merrill Lynch advisor who is running from the bank culture, and all of the sudden [he's] not working for the big East coast bank anymore, [he's] working for the big West coast bank."