Wells Fargo FiNet’s quest to turn 2016 into a record recruiting year has hit a snag. The wirehouse’s independent advisory arm lost a four-member team that oversees $4.5 billion in client assets, a spokeswoman confirmed.
In April, FiNet’s president Kent Christian said he expected this year’s pipeline to be the largest in FiNet’s 15-year history, exceeding the 102 advisers it recruited in 2015.
Thus far for 2016, FiNet has recruited 68 advisers who manage a total of $7 billion, a Wells Fargo spokeswoman says.
The largest teams to go indie this year managed more than $5 billion in client assets.
'VALIDATED' BY DOL RULE
The newest defectors include former Wells Fargo employee channel advisers Gerald Goldberg, Jonathan Yolles, Michael Lepore and Claire McDonald, who formed an independent practice under FiNet two years ago. They have launched their own RIA with Focus Financial Partners, according to a statement.
“We have had a great working relationship with Wells Fargo, but decided to make the move to full-fledged independence for our clients,” Goldberg says. “In the wake of the Department of Labor’s fiduciary rule we think our decision to become an RIA has been validated.”
The breakaway team is operating as GYL Financial Synergies in West Hartford, Conn., with Goldberg serving as CEO, Yolles as CIO, and Lepore and McDonald as senior managing directors. GYL's clients include high-net-worth, ultrahigh net-worth and select institutional clients, according to the firm.
The loss is FiNet’s largest to date this year and represents a departure from its recent steady string of recruiting wins. Just last week, the firm snagged seven advisers with a combined $780 million in AUM.
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Wells Fargo's independent arm landed seven recruits in its latest efforts to add more than the 102 advisers recruited from competitors last year.
July 27 -
After predicting a strong recruiting year, Wells' independent advisory arm attracts planners from LPL Financial, UBS and U.S. Bank.
July 14 -
In an unusual move, the two veteran advisers left the independent channel to rejoin an employee broker-dealer.
May 19
“Any time you have one of your largest teams defect to the independent channel, it sends a powerful message to the people left behind that the grass may be greener on the other side,” says consultant Tim Welsh of Nexus Strategy.
NATURAL EVOLUTION
While independent channels like FiNet offer increased flexibility over wirehouse employment, advisers are still constrained by compliance, product choice and oversight by the mothership, Welsh added, which is why the industry is undergoing a natural evolution to the fully independent RIA model.
He believes FiNet will likely have a difficult time reaching its recruitment goal now given that most deals tend to occur in the first half of the year.
Prior to going independent under FiNet, all four members of the GYL team worked for 11 years as Wells Fargo employee advisers, according to FINRA BrokerCheck records. They began their careers at Prudential Securities in the 1990s.
A spokeswoman from Wells Fargo Advisors declined to comment on the team’s departure.
