Why Billion-Dollar Teams Are Flocking to FiNet

Wells Fargo has been investing billions into its independent FiNet platform, and the results are starting to show. In recent years, FiNet has become a magnet for top producers and a popular choice for teams at Wells’ own private client group, as well as billion-dollar teams from other wirehouses.

For ultra-high-net-worth teams with sophisticated clients, FiNet offers tremendous growth opportunities by combining the best of both worlds: the ability to be fully independent with all the resources of a large investment bank. As the independent space has evolved rapidly in recent years, there are many options for breakaway brokers but almost none that provide the same level of resources with top-of-market 1099 after-tax compensation.

FiNet advisors can offer and be paid on identical products and services to Wells’ Private Client Group, including SMAs, alternatives, lending, structured notes, trust services and access to investment banking and capital markets. But unlike PCG, where advisors give up half their revenue and do not own their practices, FiNet advisors own their book and can receive 94% payouts. After all local expenses including real estate and staff, that yields typical net 1099 income around 75%. Meanwhile, you have full flexibility to set your own culture, design your client experience and build your own brand and equity.

Advisors who may be concerned about the Wells’ name brand reputation need not worry because this division is separate and distinct from Wells Fargo brand. Only the name of the custodian, First Clearing, appears on client statements with no corporate Wells branding required anywhere including logos on team websites.

FiNet is over two decades old, but it has been growing rapidly since Wells Fargo has made a significant investment in the channel over the past five years. Wells strategically recognized that the breakaway broker movement had become an irreversible trend as almost every advisor seeks greater independence. Wells executives, led by Wall Street visionary Barry Sommers, recognized that they are in a unique position as the only major wirehouse to offer an independent channel.

Here’s a look at some of the economic selling points for third-party recruits:

• Recruiting offers that can stretch over 200%+/- of trailing-12 revenue
• Top-line 94% payout at a tax-advantaged 1099 income
• Access to internal succession programs with 250% payout taxed as long-term capital gains

FiNet is also the only major bank that allows outside investors to take an equity position into private team practices. Merchant Investment Management is one of the fastest-growing venture capital firms taking minority stakes in some of the nation’s most successful practices. Not only do they pay very attractive long-term capital gains valuations, but they also offer deep intellectual capital with an all-star list of some of Wall Street’s most experienced wealth management execs helping guide teams for growth. For example, Tim Bello, formerly a founder of SkyBridge Capital and the supported independent platform Dynasty, offers tremendous vision for almost any practice.

From day one, Wells’ onboarding and transition support specialists make transferring your practice a seamless process. Wells will also actively recruit for you, feed you referrals or connect you with retiring advisors and use its own balance sheet to fund practice acquisitions internally or hefty recruiting transition packages for external hires.  Managers who oversee recruiting for Wells’ private client group are rewarded equally for referrals to FiNet teams.

There are plenty of examples to illustrate proof of concept. One case study, ”How Does a $3M Team Grow to a $75 Million Team in 5 Years?”, shows how a Morgan Stanley breakaway team was able to turn their practice into an enterprise. Another practice, TSG Group, scaled to $100 million through strategic acquisitions and leveraging the platform for recruiting.

The FiNet offering is so compelling that now there is a wait time of more than a year and a half for Wells advisors looking to transfer from PCG. Whether you’re considering an internal transfer or evaluating independent brokerage options, FiNet has been one of the industry’s best growth stories over the last five years and should be at the top of any due diligence list.