Wells Fargo’s (WFC) Financial Network, its independent-advisor unit, has raised its bonus awards for 2012 to encourage its roughly 1,100 advisors to grow their sales at a robust pace, according to FiNet President John Peluso (left). To be eligible for the award, advisors and teams must hit certain targets of net new assets and best-practice results, the executive said in a recent interview with AdvisorOne.
“This is part of our quality hurdles, and there is also a scoring system tied to several best practices,” said the FiNet executive. “This includes having written investment plans for clients, using bank solutions, employing written continuity plans and taking other steps to build client loyalty.”
Advisors who join FiNet by June 30 are eligible for the Voluntary Growth Opportunity Award program in 2013.
In 2011, the Innovation and Growth Team—consisting of 16 executive-level managers—was introduced to complement such efforts. The team is “focused on looking at ways to ensure business growth by designating a specific leadership team and resources for this goal,” Peluso said.
"In general, FiNet’s yearly growth target is to help FAs open up between 75 to 100 new practices a year. And we believe this is sustainable,” he said. “Including solo practitioners and teams, this entails about 140 to 200 advisors per year joining FiNet.”
An important trend, both he and experts say, is that larger teams—with above-average yearly fees and commissions—are exploring and moving to independence. “We should continue to see this trend and strong organic growth, i.e., same-store sales,” Peluso said.
“We want mature business owners to join us, and we are best positioned to help them grow the business,” said the executive, who joined the industry in 1988 at Wheat First Securities. “We hope to grow in the double digits going forward, in terms of revenue.”
The average production of FiNet’s rougly 1,100 advisors is about $530,000, or $1.05 million per team. Prospective FiNet reps that Peluso and his colleagues at Wells Fargo are talking to these days are generating even greater production, he says.
“The pipeline is bigger and better in terms of independent reps and teams,” said Peluso. “This started in the second half of 2011 and is continuing in the first half of 2012.”
Still, going independent is not for everyone, he admits, and that “is a long-term trend.” Nonetheless, there are probably three out of every 10 advisors exploring this option today versus about 1 out of 10 in the past five to 10 years, he says.
“Not all advisors are capable and want to run a small business,” Peluso said. “FiNet is about making that move as simple as possible. There are myths in the marketplace [about going independent] and through a partnership with us, we demystify this process.”
Check out John Peluso’s profile as a 2012 IA 25 honoree.