Wells Fargo unit taps independent broker movement

* Wells independent broker unit sees 85-100 new affiliates

* FiNet president sees demand for “independence with help”

By Joseph A. Giannone

NEW YORK, April 11 (Reuters) – Wells Fargo Advisors
Financial Network, a unit supporting nearly 1,000 self-employed
brokers, expects to add 85 to 100 affiliates this year as more
big-firm advisers seek independence — with help.

FiNet, like other custodians and independent brokerage
firms, allows Wall Street advisers to go out on their own but
still get access to the operations management, investment
selection and business development help of the big firms.

“We’re a do-it-yourself society,” said FiNet President John
Peluso. “But they also don’t want to be all alone.”

Without acquisitions, FiNet in the past 10 years has
swelled in size, first as part of Wachovia Securities and since
2008 as a unit of Wells Fargo Advisors, the third-largest U.S.
brokerage.

Peluso said the business last year added 83 affiliates —
either individual brokers or teams — on top of 100 that joined
in 2009. It currently has about 985 advisers in some 500
practices managing more than $43 billion in client assets.

FiNet boosted revenue 38 percent last year, fueled by
growth of the network and growth generated by existing
offices.

Industry studies have shown that independent brokers and
investment advisers have gained significant market share from
the big traditional Wall Street banks in the past decade.
Independent brokers typically keep 85 to 90 percent of the fees
and commissions they generate, though they pay their own rent,
trading costs and other business expenses.

That said, there are dozens of independent broker networks,
including industry leaders like LPL Financial (LPLA.O: Quote, Profile, Research) and
Raymond James Financial (RJF.N: Quote, Profile, Research).

Prying brokers away from the big firms is usually easier
said than done.

“There’s a lot of inertia, a lot of multimillion-dollar
practices in the national wirehouses and other firms, and they
just don’t move,” Peluso told Reuters on the sidelines of a
SIFMA brokerage industry conference.

“Wirehouse” refers to big Wall Street banks such as Morgan
Stanley, Merrill Lynch and Wells Fargo Advisors that employ
brokers. They traditionally provide a wealth of services and
keep a bigger portion of the broker’s fees and commissions.

Peluso earlier this year reorganized FiNet management and
named Craig Avery to lead a new “innovation and growth” team,
Avery is charged with driving revenue growth by, among other
things, simplifying the going-independent process and
encouraging sales of Wells Fargo banking and credit services.
(Reporting by Joseph A. Giannone; editing by John Wallace)

Wells Fargo unit taps independent broker movement