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The Wells Fargo Fake Account Scandal, and its Impact on Financial Advisers and Recruiters

How it could affect financial advisers and why they should consider switching brokerages

The recent events with Wells Fargo have shaken things up in the financial services industry. Recruiters and industry firms alike believe that these events will have an impact on stock broker jobs, financial advisor jobs, financial services headhunters, financial services recruiters, and other advisory roles in the financial industry.

Americans were appalled to learn in 2016 that Wells Fargo employees opened a couple million fake customer accounts, without the customers’ permission, to hit sales targets or receive larger bonuses. Fortunately, the fraudulent practice was uncovered, and Wells Fargo now faces fines, class action lawsuits, and a US Labor Department Review. Chicago’s City Council suspended doing business with them and the State of Illinois may follow soon.

Many of Wells Fargo’s clients and advisors left the company after the scandal was exposed, and others are following suit every day. For many investors, the Wells Fargo scandal has become an excuse, or a smart decision for some, to shop other brokerages for services. That being the case, if you are a financial advisor, or manage a book of business for a financial service firm, it is in best your interest to consider a switch from a brokerage with a marred image and sensible to, at a minimum, contact a financial advisor recruiting firm to look at your options.


How Does the Wells Fargo Fake Account Scandal Affect Financial Advisors?
Did you know that the Wells Fargo scandal will have a massive impact on your business if you work as a financial advisor or if you work in recruiting financial advisors? Not only will it have a direct effect on various financial services, but it may also mean that you are working with a brokerage that is struggling through financial uncertainty, a tainted reputation, and a mass client exodus.

Effect on Services

Many organizations, including government entities have suspended their ties with Wells Fargo over the recent scandal. Which also means that if you are a financial advisor who is currently working with or for Wells Fargo, your business will be directly impacted. For instance, underwriting, brokerage, trustee, and many other services have been adversely impacted by the scandal. The Wells Fargo scandal is affecting financial advisors and wealth managers nationwide.

Effect on Financial Uncertainty

This fiasco is going to cost Wells Fargo millions of dollars in fines and refunds to clients. Furthermore, profit expectations and share prices have fallen. Any financial services recruiter who does business with Wells Fargo, is working under the assumption that they are doing business with a firm whose image and reputation has been tainted and that can have a lasting negative impact moving forward.

Effect on Reputation

The financial penalties may not be Well Fargo’s only problem. In fact, Wells Fargo is still in strong financial standing despite those financial penalties. As an example, their share prices rose by 2% just recently. That being the case, financial uncertainty still exists and investors are leery.

The primary problem is the damage to the firm’s reputation. By duping so many clients, many prospective investors no longer trust the Wells Fargo brand. As a direct consequence of their actions, there are calls from Congress to bring criminal charges against higher members of the organization.

What does this all mean? It means that investors may not trust Well Fargo Advisors due to the scandal Therefore, if you do business with Wells Fargo you’re doing business with a financial firm whose reputation has been compromised, and may scare away potential clients.

Why Should You Consider Switching Brokerages?

Let’s sum things up:

If Wells Fargo is your brokerage, you’re working with a firm whose reputation is questionable at best, and whose financial standing could be in jeopardy.

It you are Financial Advisor, it may be a good idea to switch brokerages immediately. Don’t delay!

At the Terrana Group we recruit stockbrokers and advisors, placing them with other major investment firms. We steer away from firms who are viewed as tarnished and in the spotlight of much headline risk. What this means is that you should switch to a firm that has more overall certainty, a good reputation, and in high financial standing.

We do not assume to be forecasters of Well Fargo’s future, but it’s a safe move to look for a new opportunity with a reputable and trusted brokerage. Contact us as a reputable Financial Advisor Recruiter at TERRANA GROUP. We are the premier headhunter in Chicago who match financial advisors with suitable firms and managers. We are a trusted consultant, who more than matches Financial Advisors based on their experience and always considers firm culture and an advisor’s personality to select the right firm which suits their needs and all parties’ expectations. Don’t delay …. give us a call today!

About Michael A. Terrana

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