| NEW YORK, June 10
NEW YORK, June 10 Wells Fargo Advisors has asked
its brokerage teams to formalize their pay and account
arrangements in a way it says is generous, but which some
brokers fear could lead to a client grab when teams change or
When the broker-dealer unit of Wells Fargo & Co.
outlined the plan several months ago - its first effort to give
benefits to teams rather than individual advisers - brokers and
firm executives said it would make working on teams more
For the first time, Wells said advisers could share deferred
bonus awards, devise inter-team revenue splits and transfer
revenue-target goals and recognition club trips among
Brokers who sign the deal could also get some bonuses they
would not qualify for individually if the team reaches a
cumulative target - such as for selling bank loans or bringing
in new accounts, rather than requiring each broker to meet his
or her individual sales target.
Still, after studying the agreement, some brokers are having
second thoughts and have yet to sign the pact.
Team-based brokers who fail to sign by the end of June will
continue to operate as in the past - organizing team
responsibilities as they like but receiving compensation and
benefits based on individual achievement.
Securities firms like Wells Advisors have been encouraging
brokers to work on teams to increase contact options for
clients, to enhance selling of specialized services and products
and to make it more difficult for individuals to jump to another
Some team-based brokers fear the new agreement could cost
them clients. It allows Wells to dissolve the team at its
discretion if it determines the action is in the best interest
of the clients, the team members or the firm.
More importantly, they say, it allows Wells to override the
teams' own arrangements for reassigning accounts when a broker
leaves or dies, and to assign that person's accounts to brokers
outside the team.
"What bothers us most is Wells's ability to take and to
disperse the accounts as it sees fit," said the head of one team
that has been together for more than a decade, and who did not
want to be quoted by name. "If they don't like what we decided,
they can take over."
Anthony Matera, a Wells spokesman, said the new plan gives
team members "amazing flexibility" in structuring compensation
and clarity about what happens if teams dissolve.
"You'd have to read a lot into this agreement to find
something to complain about," he said. "It's intended to be
beneficial to the financial advisers."
The reason for the focus on team breakups - some brokers
have called the new agreement a "pre-nup" - is that "we want to
spot the problems before they become issues," Matera said. He
said Wells had invited dissenting brokers to suggest customized
revisions for their practices.
Wells recently extended the deadline for returning forms
from May 31 to June 30, citing "additional demand" from brokers
who needed time to calculate their team formulas.
Some advisers and consultants said Wells' primary concern
was to shield itself from lawsuits or arbitration hearings that
occur when dysfunctional teams break up, and noted that other
firms also have team agreements.
"I'm guessing that a big firm like Wells has had all types
of issues, and this is an attempt to tighten up how brokers get
married, get divorced or split up the estate," said Danny Sarch,
a broker recruiter based in White Plains, New York. "It was
probably dealt with in an ad hoc way before."
The new team benefits will be made available to the more
than 11,000 brokers within the private client group of Wells
Wells would not comment on how many advisers work on teams
or how many teams had returned signed agreements.
(Editing by Linda Stern and Bernadette Baum)