Image: Bloomberg News
Image: Bloomberg News

(Bloomberg) -- Wells Fargo struck a deal with Credit Suisse to smooth the recruitment of the Swiss lender's private-bank employees as their firm retreats from managing wealth for U.S. clients.

The deal would allow U.S. advisors and clients to move to Wells Fargo Advisors by early 2016, according to a joint statement Tuesday from the firms.

The agreement, hinging on clients' consent, gives Wells Fargo access to more detailed information about customers, their investment portfolios and the products and services Credit Suisse marketed to them than if Wells Fargo simply tried to hire individual advisors, according to a person with knowledge of the arrangement who asked for anonymity to talk about the details. It also makes it smoother for Credit Suisse employees who join Wells Fargo to transfer their business, the person said.

Wells Fargo, the largest U.S. bank by market value, is seeking to boost the smallest of its three main divisions as Zurich-based Credit Suisse shifts strategy under new Chief Executive Officer Tidjane Thiam. The division contributed more than 10% to Wells Fargo's net income in the three months ended in September, up from roughly 8% two years earlier, data compiled by Bloomberg show.

"The wealth-management business is a major area of growth and focus for Wells Fargo," David Carroll, head of the San Francisco-based bank's wealth and investment-management division, said in the statement.


Wells Fargo's brokerage has about 15,000 financial advisors and $1.4 trillion in client assets. Credit Suisse's U.S. private bank, led by Philip Vasan, has customer assets of about 100 billion francs ($105 billion) and around 350 relationship managers, according to estimates by Citigroup Inc.

Wells Fargo plans to offer retention bonuses in line with recruitment offers it gives to attract advisors from other firms, according to the person. The bank usually offers bonuses of about 2.5 times trailing 12-month revenue, according to Mindy Diamond, the principal of Chester, New Jersey-based recruiter Diamond Consultants LLC. In other deals like this, the buyer will usually offer less, such as 1 times trailing 12-month production, to retain employees, she said.

"The incentive package to go elsewhere can be much larger but it's easier to stay," Diamond said. "As long as you believe that your life won't change materially, you are inclined to stay put. Wells, as opposed to some lesser-known firm, has a better chance of retaining the brokers."


Wells Fargo executives will travel to Credit Suisse offices in the coming days to speak with advisors and try to convince them to stay, the person said.

The two companies will also work on making more Credit Suisse investment-banking and asset-management products available to Wells Fargo clients, the lenders said. Those talks are still at an early stage, the person said.

Terms of the deal weren't disclosed. Analysts at JPMorgan Chase, Morgan Stanley and Citigroup had estimated the unit could fetch 400 million francs to about 860 million francs.

Credit Suisse plans to outline the bank's strategy under Thiam on Oct. 21. The lender is weighing a stock sale that may raise between 6 billion francs and 8 billion francs, a person with knowledge of the plan has said.

--With assistance from Noah Buhayar in Seattle.

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