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Wells Fargo CEO is looking to use wealth clients to drive growth in the consumer bank, taking a page from rivals’ playbooks

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  • Wells Fargo’s CEO said the bank can look to better link wealth and consumer units for growth. 
  • “It’s what we see with what so many of the other wealth managers have done so well,” he said. 
  • Charlie Scharf has remade its wealth arm as he looks to focus on core operations and cut costs. 
  • See more stories on Insider’s business page.

Wells Fargo Chief Executive Charlie Scharf is looking to drive growth at the bank by leveraging more relationships across its many segments — a strategy its biggest rivals have put to work. 

The bank is looking to take advantage of its large wealth management base to cross-sell other products and services, he said, pointing to the competitors’ success during a virtual financial services conference. 

After all, Wells is one of the largest US wealth managers with some $2 trillion in client assets as of March. Bank of America, which oversees some $3.5 trillion for clients through its Merrill Lynch Wealth Management business and its private bank, has looked to a similar strategy to keep more assets under one roof as the second-largest US bank. 

“It’s what we see with what so many of the other wealth managers have done so well, which is just doing a great job on the wealth management side and things like deposits and loans come along with it,” Scharf said on Wednesday, according to a transcript on investment research platform Sentieo, without naming rivals. 

“The opportunity to greatly increase the rate of growth in both our wealth segment as well as the consumer and business banking segment is huge because of that,” he said. 

It’s long been a focus at other firms. During a call with reporters in January, a senior Merrill Lynch Wealth Management executive said 46% of Merrill clients had checking or savings accounts with the bank. The wealth manager will “continue building that bridge between Merrill and the bank in order to serve clients comprehensively,” the executive said. 

Scharf, who joined in October 2019 from BNY Mellon, for his part has drastically reshaped Wells Fargo’s wealth and investment arm in an effort to focus on core businesses and cut costs.

He tapped Barry Sommers, a former JPMorgan executive, to run the sprawling business. Wells Fargo sold its asset management business in February to two private equity firms. It got out of the international wealth management business. It reorganized its private banking business, and Insider first reported last month that private wealth head Julia Wellborn was leaving the firm. 

By looking to drive growth through linking different business units, Scharf confronts the bank’s history of cross-selling. It’s a strategy that is not unique to the San Francisco-based bank but has become closely associated with it.

Scharf was hired as Wells Fargo’s third chief executive in three years to help it recover from one of the most far-reaching financial scandals in years, centered on employees who felt intense pressure to cross-sell customers on products or open new accounts without their knowledge to meet aggressive internal targets. 

On Wednesday, Scharf noted each of the bank’s four segments — wealth and investment management, consumer banking and lending, commercial banking, and the corporate and investment bank — has the opportunity to grow more profitable and grow faster by “being far more competitive in the marketplace.” 

He sees a similar opportunity to use relationships in the commercial bank, which provides companies with financial services and products like credit and treasury management and is led by Perry Pelos, to drive more business to the investment bank and link those two worlds more deliberately. Jon Weiss runs corporate and investment banking.

“But because we’ve run separate lines of businesses, we’ve not shown up and said, ‘Hey, to the extent you want to access the public markets, we’ve got those capabilities or if you need strategic advice, we could do the same,'” he said.