The sale of Credit Suisse' U.S. brokerage to Wells Fargo is turning into a disaster for the U.S. bank. First, the Swiss bank's arch rival UBS poached a string of bankers, now the turn is on Morgan Stanley.
Wells Fargo was happy enough when Credit Suisse (CS) in October decided to sell the U.S. brokerage. With the expected increase in assets under management it hoped to boost its profits.
The joy didn't last for long. The best client advisers and entire teams are opting to join rival employers instead of Wells Fargo Chief Executive John Stumpf's outfit.
Latin American Crew
Morgan Stanley is latest source of irritation for Wells Fargo. A group of advisers with a total $36 billion in assets under management and an annual commission volume of $125 million has decided to join Morgan Stanley, U.S. news portal «Onwallstreet» reported.
The team and money changing hands are mostly Latin American, a target market for Morgan Stanley. Almost all of the concerned 35 advisers received a job offer at Morgan Stanley, which is ready to pay them their deferred bonuses, according to headhunters cited in the report.
«Raiding Claim» Against UBS
UBS has already attracted some 70 CS employees, reportedly offering them generous signing-on fees. The hiring spree by CS' biggest rival prompted it to report UBS to the U.S. regulator Finra, making a so-called «Raiding Claim» against the Swiss banking giant.
Wells Fargo is partly to blame for the disaster. It has set its limit for bonuses at $5 million with a condition attached that an adviser has to sign up for 13 years before becoming entitled for the payout – turning off potential talents.
Some advisers also harbor doubts that Wells Fargo with its strength in the retail business will be able to offer the super rich clients the level of service they receive from competitors.
