Wells Fargo & Co's (WFC.N) U.S. brokerage business bolstered its adviser force in the final quarter of 2012, helping to expand the company's client asset base at a time when rival firms have seen more advisers walk out the door.
The company said on Friday its Wells Fargo Advisors unit grew by 247 advisers in the three months ended Dec 31, bringing its total U.S. force to 15,414 advisers - a net gain of 151 advisers from the year prior.
Client assets managed by the St. Louis-based brokerage rose to $1.2 trillion, an 8 percent increase from the same period last year. Wells Fargo Advisors is the third-largest U.S. brokerage by adviser headcount and client assets managed, following Morgan Stanley Wealth Management and Bank of America Corp's (BAC.N) Merrill Lynch.
"They've been doing really well and will probably have a good recruiting year (in 2013)," said California-based financial services recruiter Ron Edde, noting that Wells' has largely benefited from growth in its independent brokerage unit.
Wells is the only one of the top four U.S. brokerages - so-called "wirehouse" firms because of their affiliation with big banks - to have an option for independent advisers, in addition to traditional employee advisers.
"It carries some appeal that other firms can't offer," Edde said.
Both Morgan Stanley and Merrill, which are due to release their fourth-quarter numbers later this month, reported a decline in their respective adviser forces during the last reporting cycle.
Merrill's adviser force shrank by 75 advisers in the third quarter, while Morgan Stanley's (MS.N) adviser force declined by 105 advisers.
INDEPENDENT GROWTH A BOON
Much of Wells' success in recruiting for the year came from increased interest in the firm's independent brokerage division, Wells Fargo Advisors Financial Network, or "FiNet," which caters to independent advisers who also function as business owners.
"It molds a solid bank with a really entrepreneurial brokerage platform," said New Jersey-based securities lawyer Tom Lewis of Stark & Stark. "It's the best of both worlds for a lot of advisers."
In the fourth quarter alone, Wells added at least 12 teams that each managed more than $100 million in client assets, based on moves tracked by Reuters. Five of those teams joined the company's independent brokerage unit.
Among those recruits was California-based adviser Michael Kazmer, who managed $620 million in client assets with his team and joined Wells in early November from Merrill.
Kazmer, who decided to go independent after three decades in the industry, said he chose to do so with Wells because of the reputation and market capitalization of the company.
"It gave us a sense of comfort," Kazmer said in an interview.
FiNet managing director Ron Sallet told Reuters in early January that 2012 was the second-best recruiting year for the independent division in more than a decade.
"We recognize that one of our advantages is the strength of the Wells Fargo name," he said. "We think our firm is continuing to position itself in the market as the firm of choice."
Wells also said in its quarterly report that the portion of retail brokerage assets held in managed accounts rose 20 percent year over year in the fourth quarter, boosted by strong net flows and a run-up in market performance. Managed accounts are those for which a client is charged a flat management fee based on the assets in the account.
Wells, the first big bank to report fourth-quarter results, said on Friday its quarterly profit rose 24 percent to a record high of $5.1 billion.
(Reporting by Ashley Lau in New York; Editing by Jennifer Merritt, Andrew Hay and Bernard Orr)