Wells Fargo's brokerage unit is making it simpler for wealth advisors to qualify for higher compensation, while trimming payouts for smaller accounts as part of its 2025 advisor compensation plan.
The announced changes are modest, aligning with the industry trend where national brokerage firms, or wirehouses, adjust compensation annually with minimal disruptions to avoid discontent within their advisor ranks.
Wealth advisors at Wells Fargo are compensated based on a grid tied to the revenue they generate. Currently, the firm pays 22% on the first $13,500 of monthly revenue and 50% on any revenue exceeding that amount. The core structure of this grid will remain unchanged for 2025, marking the fourth consecutive year that Wells Fargo has kept these foundational elements of its pay structure intact. This consistency is aimed at fostering advisor loyalty and driving growth, according to Sol Gindi, head of Wells Fargo Advisors.
“Our focus on maintaining a clear, stable compensation plan that rewards growth is a major factor behind our success in retaining advisors and attracting top talent from across the industry,” Gindi said in a statement. He emphasized that a transparent and predictable pay model has been key to reducing attrition and supporting the firm’s recruitment efforts.
Wells Fargo also left its advisor expense allowance unchanged, while broadening the criteria for advisors to qualify for a 50% payout rate on all the revenue they generate. Advisors can now meet the qualification with $2 million in asset flows from 2024 or $4 million in flows over the past two years. Previously, eligibility was based solely on a single year’s performance.
On the other hand, the firm is raising the minimum revenue threshold for seasoned advisors to qualify for standard payouts. Advisors with at least eight years of experience must now generate a minimum of $330,000 in annual revenue to avoid a lower monthly payout rate. This is a 10% increase from the previous threshold of $300,000.
Wells Fargo, like other firms in the wealth management sector, is nudging advisors to focus on clients with larger portfolios. In line with this strategy, the 2025 plan introduces a stricter small household policy. Advisors will earn a flat 10% payout on households with assets under $250,000. Previously, the firm paid 20% on households with assets between $100,000 and $250,000, and 10% for those below $100,000.
However, in a move designed to ease the impact on advisors managing multigenerational relationships, Wells Fargo will offer a 30% payout on smaller accounts within multigenerational households. This adjustment recognizes the importance of retaining smaller accounts that are part of larger family wealth management relationships, such as those held by children of affluent clients.
Additionally, the 2025 plan introduces a new incentive for advisors: a $500 bonus for referring clients to open new active checking accounts, reflecting Wells Fargo's efforts to drive cross-selling within its broader banking business.
Wells Fargo's decision to unveil its compensation plan earlier than last year offers advisors more time to plan and adjust their strategies for the coming year. Last year, the firm revealed its plan in December, but this year’s early release is likely intended to provide advisors with additional lead time.
Earlier this month, Morgan Stanley rolled out its 2025 plan, introducing incentives for advisors to refer clients to other parts of the company. Merrill Lynch and UBS have yet to announce their plans for next year, though they are expected to follow suit with their own adjustments aimed at retaining top talent and driving growth across their respective platforms.
