Wells Fargo Advisors Review

Wells Fargo Advisors is the financial advisory business of Wells Fargo & Company, one of the largest financial institutions in the U.S. The firm has branch offices across the country and offers portfolio management and financial planning services. Its clients include non-high net worth and high net worth individuals, as well as a number of different types of institutional and corporate clients.

All information included in this profile is accurate as of September 29, 2021. For more information, please consult Wells Fargo Advisors’ website.

Overview of Wells Fargo Advisors

Wells Fargo Advisors (WFA) is the trade name used by Wells Fargo Clearing Services, LLC, the name under which the firm is technically registered with the U.S. Securities and Exchange Commission (SEC). The firm is an affiliate of Wells Fargo & Company, a massive publicly held financial holding and bank company founded in 1852 by Henry Wells and William Fargo during the San Francisco gold rush.

Today, the firm has nearly 24,000 employees, just over 10,600 of whom perform investment advisory and research functions. All of the firm’s employees also act as registered representatives of broker-dealers. The firm is affiliated with Wells Fargo Advisors Financial Network, a broker-dealer that provides brokerage and advisory services, as well as Wells Fargo Investment Institute, Inc., a registered investment advisor that offers research and advisory services to Wells Fargo Advisors.

What types of clients does Wells Fargo Advisors serve?

The bulk of the firm’s clients are individual investors, with a number of clients who are and are not considered high net worth. For reference, the SEC defines a high net worth individual as someone with at least $750,000 under an advisor’s management or a net worth believed to be at least $1.5 million. After individual investors, the firm’s largest client groups are pension and profit-sharing plans, business and charitable organizations.

The firm has multiple investment program offerings aimed at serving different types of investors. The minimum account balances vary greatly depending on the portfolio selected, ranging from $10,000 all the way up to $5 million. No minimum is required for the firm’s financial planning services.

Services offered by Wells Fargo Advisors

The firm offers a full suite of financial planning and portfolio management services to clients throughout the country. Advisory services are offered through a broad range of investment programs. The firm provides investment management services on both a discretionary and non-discretionary basis, although the vast majority of assets are managed on a discretionary basis, meaning the advisor makes investment decisions without consulting the client each time.

Here is a full list of services offered by WFA:

• Portfolio management
• Financial planning
  • Retirement planning
  • Charitable giving planning
  • Education planning
  • Estate planning
  • Insurance planning
  • Family and divorce planning
  • Elder financial protection
  • Tax planning
• Retirement plan consulting
• Selection of other advisors

How Wells Fargo Advisors invests your money

The firm uses its Envision® Process program to recommend a mix of investments for each client’s portfolio. This in-depth planning process helps the firm to build a portfolio that’s tailored to each client’s current financial picture, future goals, risk profile and time horizon.

Your financial advisor will work with you to determine which type of advisory program best fits your needs and objectives. Options include unified and separately managed account programs, mutual fund advisory programs, financial advisor-directed programs and non-discretionary, client-directed advisory programs.

Different types of investments are used in different programs, with some investing in mutual funds and others using exchange-traded products or individual investments like stocks, bonds and commodities-based investments. Some programs offer clients the option to include ESG-aware investments for those interested in values-based investing.

Fees Wells Fargo Advisors charges for its services

For investment advisory services, Wells Fargo generally charges clients based on a percentage of assets under management. The rate clients will pay varies based on the product and services used, generally ranging from 2% to 2.50%. This is typically a wrap fee, meaning it bundles a number of costs into one rate. The firm says the fee it charges generally will cover the cost of its advice, the custody of assets, manager fees (if applicable), and the execution of most transactions. Additionally, clients may also be subject to a platform fee as well as other investment-related expenses and operational or service fees.

While the firm notes that it works with most clients under an asset-based fee arrangement, it does offer advisory programs with other fee structures, such as a commission for each transaction.

Clients who want holistic financial planning, beyond the Envision® Process, will pay an additional fee for that service. The amount of the fee depends on the scope of the plan, but it is capped at a fixed fee of $10,000. For consulting services, clients will pay a one-time or ongoing flat fee, or an asset-based fee.

Wells Fargo Advisors disciplinary disclosures

The firm has faced multiple disciplinary events within the last decade, many of which the firm settled by paying fines without admitting or denying the charges. For reference, the SEC requires all registered investment advisors to disclose on their Form ADV whether the firm, an employee or an affiliate has faced disciplinary actions relevant to their advisory business within the last decade.

Among the disclosures made by the firm in its Form ADV filings, the most recent events include:

• In 2020, the firm agreed to settle with FINRA over allegations that it failed to reasonably supervise the activities of two former registered representatives. From 2012 to 2015, these representatives recommended that many of their customers invest a substantial portion of their assets in certain high-risk energy securities. The firm had previously compensated numerous clients over $9.7 million for losses in these investments. Without admitting to or denying the findings, the firm agreed to a settlement that included a censure, a fine of $350,000 and restitution of $201,498 plus interest to additional specified clients.
• Also in 2020, the SEC found that, from 2012 through 2019, the firm recommended many investment advisory and brokerage customers buy and hold single-inverse ETFs without having adequate compliance policies and procedures in place and without providing proper training to financial advisors and supervision of the product. The firm agreed, without admitting wrongdoing, to pay a penalty of $35 million.
• In 2018, the firm was among dozens of firms that voluntarily agreed to repay clients whom they had put into higher-priced mutual fund share classes without adequately disclosing that there were lower-cost alternatives available. As part of the agreement, Wells Fargo repaid $17.3 million and promised not to commit further violations.

For more information on Wells Fargo Advisors, you can visit its IAPD page.

Wells Fargo Advisors onboarding process

1. Reach out to the firm: You can either call the firm at 1-866-224-5708 or find the office nearest to you using the Find an Advisor tool on the company’s website. You can also fill out this form to get a free consultation.
2. Go through the firm’s planning process to get a portfolio recommendation: You’ll then work with your advisor to go through the firm’s Envision® Process of planning, which will help your advisor tailor a portfolio to your financial situation.
3. Stay in touch: Wells Fargo recommends that clients and advisors connect at least annually. Advisors will communicate with clients via email, phone or in person — whichever works best for you. You also will have 24/7 access to your account online.

Where Wells Fargo Advisors is located

The firm has branch offices in all 50 states, plus the District of Columbia. In its Form ADV, the firm lists over 6,200 office locations in total.

Is Wells Fargo Advisors right for you?

Wells Fargo Advisors may appeal to a broad range of potential investors, given the firm’s large geographic footprint and numerous portfolio offerings for investors at all levels. Additionally, the firm’s positioning within a massive financial institution can make it a one-stop shop for those who also want banking or loan assistance.

However, the firm’s advisors can earn commissions on the sale of certain financial products, so it’s important to ask your advisor whether they’re benefiting from any recommendations. You also should take note of the firm’s potentially higher than average fees as well as its disciplinary history.

Before you decide on a financial advisor to work with, be sure to research multiple firms to ensure you find the right advisor for you.