By George C. Miller, Esq.  of Shustak Reynolds & Partners, P.C. posted on Wednesday, February 3, 2021.

George C. Miller

Partner

Location: San Diego, California
Phone: (619) 696-9500 (Ext. 105)
Direct: (619) 501-8270
Email: [email protected]

As Wells Fargo continues to reorganize its Wealth Management division, the firm recently dealt a major blow to its 330+ international financial advisors by announcing it will be exiting the international wealth management space altogether by September 2021.  According to Jim Hays, head of Wells Fargo Advisors, the firm is exiting the international space because it wants to “focus on [its] core business, which is serving clients who primarily reside in the United States….” He cited the additional processes, approaches, and infrastructure necessary to support the firm’s international advisory business as justification for the move. Enhanced anti-money laundering (AML) and compliance and supervisory obligations have contributed to other wealth management firms exiting the international wealth management market. RBC Wealth Management, once known for its international platform, abruptly exited the international space in late 2014, due in part to the stringent AML and supervisory obligations imposed by regulators.

In mid-January 2021, Wells Fargo began prohibiting the opening of new international wealth management accounts. The firm has now started an “exit process” for existing international wealth management clients. And while Wells Fargo pledges to work with its 330+ international financial advisors through the transition, details of what, if anything, the firm plans to offer those advisors are unknown. The negative impact on those advisors, most of whom reside in California, New York, and Florida, will be significant. In addition to lost clients and revenues, and losses associated with transitioning to a new firm, many international advisors may be handcuffed to Wells Fargo through up-front bonuses paid in the form of forgivable promissory notes. Wells Fargo will likely take the position those notes must be repaid when an advisor moves firms, despite the firm’s abrupt shift away from the international wealth management business. 

It is critical for any financial advisor dealing with an employment or transition issue to seek sound advice from experienced counsel. Our FINRA employment and promissory note attorneys are highly experienced in counseling financial advisors through employment and promissory note disputes. Contact us today for a confidential consultation.

Shustak Reynolds & Partners, P.C. focuses its practice on securities and financial services law and complex business disputes. 
We represent many broker-dealers, registered representatives, investment advisors, investors and businesses. 
Attorney George C. Miller can be reached in the firm’s San Diego office at (619) 696-9500. 

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