Wells Fargo & Company WFC has been making plans to merge the Wealth Brokerage Services and Private Client Group, as both the divisions are dedicated to serving high-end customers. The news was first reported by The Wall Street Journal.
The move is aimed at improving efficiency of the wealth management segment by streamlining operations. Details of the restructuring will likely be disclosed later this week, by Jon Weiss, the lead of wealth and investment management unit, at an internal meeting to be held in town hall.
In its latest quarterly filing, Wells Fargo had mentioned that its investment management segment was still undergoing a review to assess whether there have been inappropriate referrals or recommendations, with respect to rollovers for 401(k) plan participants, certain alternative investments and referrals of brokerage customers. The bank had initiated this review on receiving inquiries from the federal authorities.
Troubles for Wells Fargo started in late 2016 due to the outbreak of unfair sales practices at the retail brokerage business, which is part of its wealth management arm. Since then, the bank has been involved in a number of investigations and paid penalties for the same.
Wells Fargo recently received the final approval for a settlement of $142 million to compensate the customers harmed by the bank’s unauthorized account-opening scandal. With this settlement, the bank would finally get a chance to move ahead of its past misconducts.
Wells Fargo’s impressive cost-control plan for 2018 will help it deal with the pressure on its costs. Also, the bank’s efforts to improve image among customers and its improving economic backdrop might support the company’s growth in the near term.
The stock has lost 7.9% over the past six months compared with the industry’s decline of nearly 2%.
Wells Fargo currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Fifth Third Bancorp’s FITB earnings estimates have been revised upward by 6.4% in the last 60 days. Additionally, the stock has gained nearly 23% in a year’s time. It currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comerica Incorporated's CMA current-year earnings estimates have been revised 1.2% upward over the last 60 days. Over the past year, the company’s share price has been up 31.1%. It currently carries a Zacks Rank #2 (Buy).
M&T Bank Corporation’s MTB current-year earnings estimates have been revised slightly upward over the last 30 days. Additionally, the stock has jumped 9.5% in the past 12 months. It also currently carries a Zacks Rank #2.
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