Wells Fargo has reportedly asked its brokers and private bankers to refer clients with household assets of $2.5m to each other, down from $5m when the partnership plan began two years ago.
The bank believes that this move to sync the two groups will open a $300bn opportunity for the group annually, reported Reuters.
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The new rules were launched nationally in the past few weeks because of the program’s success at the higher threshold, David Carroll, head of Wells’s Wealth, Brokerage & Retirement division said at a bank analyst conference in Boston.
The cut in the wealth threshold to $2.5m from $5 million two years ago is expected to nearly quadruple client households eligible for referrals to 50,000 from 13,000 as well as double its brokerage assets now kept outside the bank to $300bn.
In addition, the number of brokers with clients eligible for referrals will increase to 8,200 from 5,800, and the number of advisers in the program will jump to 900 from 500.
"It is not an industry norm for traditional private bankers to play nice with brokers, but we are making it work very well," Carroll said.
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By GlobalDataCarroll added that bankers and brokers are driven by internal recognition for playing team ball rather than by financial incentives.
Private bankers at Wells Fargo targets clients with household assets between $1m and $50m, while brokers aim for households with $250,000 to $5m. Since 2012, Wells Fargo has booked $1.7bn of loans, $2.2bn of new brokerage assets and $1.4bn of trust assets.
Next year, the firm’s wealth businesses is planning to spend about $250m on product upgrades and training. The wealth division aims for average profit margin over the next five years in the mid-20% level.
