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October 21, 2015 at 06:28 AM
(Bloomberg) — Wells Fargo & Co. struck a deal with Credit Suisse Group AG 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. advisers and clients to move to Wells Fargo 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 advisers, according to a person with knowledge of the arrangement who asked for anonymity to talks 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 percent to Wells Fargo’s net income in the three months ended in September, up from roughly 8 percent 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.
Financial Advisers
Wells Fargo’s brokerage has about 15,000 financial advisers 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 advisers 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.
