Administrative Action of Wells Fargo
Wells Fargo Advisors just announced it has eliminated bonus compensation for advisors’ sale of banking and lending products. This comes after its parent bank , Wells Fargo & Co. was fined $185 million for opening checking and credit accounts that customers never knew about or approved.
Although the press release stated there were “minimal changes for 2017,” reportedly, bonuses for bank products had been removed from the company’s grid, or payout schedule.
In the past, Wells Fargo advisers could make up between $50,000 and $100,000 in deferred compensation annually for lending, according to an article in Investment News.
AdvisorHub.com, an industry news site, first reported on Wednesday that Wells Fargo Advisors was cutting the ability of advisers to increase monthly payouts and annual bonuses by selling mortgages and credit lines.
Last week, the Financial Industry Regulatory Authority Inc. said it wanted to speak to any fired Wells Fargo reps about cross selling at the bank and its retail brokerage, apparently more fallout from the recent scandal.
The central part of Wells Fargo’s compensation plan is not changing. Advisers receive a payout of 22% for the first $11,500 to $13,250 they generate each month and a 50% payout on revenue above that level, according to the company.
In performance awards, or deferred compensation, advisers who generated between $400,000 and $499,000 in fees and commissions are eligible for a base award of $1,000, while advisers who generate $500,000 or more are eligible for an award of $3,000. The maximum base award rate will be 7.5% of revenue, according to the company.
For FINRA’s full findings visit their website, www.finra.org.
Recovery of Investment Losses
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