Wells Fargo Advisors Review

Pros and Cons of Wells Fargo Advisors

Types of Clients

Wells Fargo Advisors serves a wide range of clients, whether you have an average income or are a high-net-worth individual. The firm offers two main categories for its advisory programs, non-discretionary and discretionary. This will command the account minimum you’ll need to meet before working with the company.

You’ll need at least $25,000 in investable assets for its non-discretionary programs. Since they come with heavy involvement from your advisor, the company’s discretionary programs require at least $50,000 in assets. However, Wells Fargo points out in its Form ADV 2A that it maintains the right to waive account minimums at its discretion.

Here’s a quick chart that breaks down the products and their account minimums:

Program Name	Account Type	Minimum Investment
Asset Advisor	Non-discretionary	$25,000
CustomChoice	Non-discretionary	$25,000
Private Investment Management (PIM)	Discretionary	$50,000
FundamentalChoice (FC)	Discretionary	$50,000
QuantitativeChoice (QC)	Discretionary	$50,000

Financial Advisor Services

Wells Fargo offers both client-directed (non-discretionary) and advisor-directed (discretionary) products. Along with the expertise of a professional, these programs include access to specific investment products, such as exchange-traded funds (ETFs), mutual funds, and unit investment trusts (UITs). The company also offers financial planning services.

Here is a breakdown of each and, if applicable, the programs within them:

Financial Planning

One of the main services that Wells Fargo Advisors offers is financial planning. With this product, you’ll sit down with a financial advisor and then discuss your goals and current situation. They’ll ask questions to learn about your income, expenses, assets, aspirations, and risk appetite. After your professional gains a complete picture of you and your finances, they’ll help you create a comprehensive plan involving one or more of the following:

• Retirement
• Building a portfolio
• Buying a home
• Education
• Having children
• Your estate
• Insurance

The one caveat with this service is that it’s for high-net-worth clients. According to the company’s client-facing brochure (ADV 2A), you’ll need at least $10 million in investable assets before you can receive a full-fledged plan. For in-branch planning services, you must have a net worth of at least $1 million.

Client-Directed Programs

Under a client-directed approach, you maintain control over the direction of your portfolio and will take care of your investments and finances yourself while consulting your advisor for recommendations.

There are two non-discretionary client-directed programs:

• Asset Advisor. Your advisor will look at your holistic financial situation and help you formulate an investment plan. Within your account, you’ll get access to the following assets:
  • ETFs
  • Closed-end funds (CEFs)
  • UITs
  • Bonds
  • Certificates of deposit (CDs)
  • Mutual funds
• Custom Choice focuses on investing in open-ended mutual funds, which your advisor will recommend after considering your situation. According to Wells Fargo, however, you may choose to invest in other funds or options since you retain managerial control over your accounts.

Advisor-Directed Programs

With the advisor-directed approach, you’ll get a portfolio manager who will have discretionary authority to act on your behalf. This means they’ll take an active role in executing trades and strategies. Even though they have a lot of power, be aware that they must act as a fiduciary and always keep your best interest in mind.

There are three advisor-directed programs. They primarily differ in the types of investments they include and their philosophical approach. The first two are Fundamental Choice and Quantitative Choice. The former focuses on equities and investments such as ETFs and cash equivalents, while the latter only includes equities and cash. The third option, Private Investment Management (PIC), is a well-rounded mix of the two, including a wide range of securities, such as stocks, bonds, ETFs, UITs, and more.

Fee Structure

Because Wells Fargo Advisors offers advice, management, and investment products in its programs, the company uses a wrap fee structure. This means you pay one fee for all the services you receive, including trading costs, brokerage expenses, and recommendations.

The fee is based on your assets under management (AUM). The standard fee for both the discretionary and non-discretionary programs is 2.0%; however, each has a varying minimum rate per quarter. In other words, even though the yearly cost takes your assets into account, your quarterly payment must be at least the listed minimum for the program you’re enrolled in.

Below is a chart that illustrates the minimum quarterly fee for each program:

Program Name	Minimum Quarterly Fee
Asset Advisor	$125
CustomChoice	$75
Private Investment Management	$250
Fundamental Choice	$250
Quantitative Choice	$250

Investment Philosophy

One of the main factors you can use to differentiate between advisory firms is how they approach investing. This is especially important if you’re working with a company like Wells Fargo that offers discretionary management services.

One of the best ways to find out an organization’s philosophy is in their Form ADV. In its form, Wells Fargo says that its advisors follow disciplined strategies while adhering to the objectives and risk tolerance you’ve mentioned in your meetings. They use the securities available within your chosen program and perform careful research to ensure they effectively carry out the investment strategies they have discussed with you.

Disclosures

Wells Fargo has two advisory subsidiaries registered with the SEC as an RIA and FINRA as a broker-dealer — Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC. The former comprises all professionals who work directly for the company, while the latter is a network of third-party advisors affiliated with the company.

Between both, the company has 550 disclosures, according to FINRA’s BrokerCheck. Of these, the overwhelming majority are arbitrations. There are also, however, 209 regulatory events for each subsidiary organization. This refers to legal actions, including criminal proceedings, against the companies or their representatives.

Customer Service

Wells Fargo Advisors offers several ways to contact support or set up an appointment with a financial professional. While the contact page on its website provides a complete list of phone numbers and contact methods, here are some helpful ones we’ve selected to help you get started:

• Open a new account – (866) 224-5708
• Help with online services – (877) 879-2495
• Help with your account – (866) 281-7436

How to Get Started with Wells Fargo Advisors

To begin working with a Wells Fargo professional or open up an account, you could either call a representative at (866) 224-570 or use the company’s locator tool. After this, you’ll have the chance to meet with an advisor and discuss your goals, investment preferences, which plan you want to pursue, and more.

Tips for Choosing a Financial Advisor Firm

Choosing a financial advisor, either an individual or a company, is a huge choice. Ultimately, you’ll have several factors to consider, including:

• Account minimums. This dictates whether you’ll be able to open an account.
• Fee structures. Some, like Wells Fargo, use an AUM structure, while others use a flat-fee payment schedule. Others may also take commissions, which can create conflicts of interest.
• Are they a fiduciary? Verify if a company is registered with the SEC via tools such as FINRA’s BrokerCheck and the SEC’s Investment Adviser Public Disclosure (IAPD) site.
• Discretionary or non-discretionary. Consider whether you’re comfortable or even need someone to have control over portfolio management duties.

An effective way to jumpstart your search is by using matching tools, such as this one. After answering some quick questions about your financial situation, it will present you with up to three fiduciary professionals in your area.

Methodology

This review is based on publicly available information directly from Wells Fargo Advisors’ website, the SEC, and FINRA. Neither the firm nor its representatives have any say on what we’ve included on this page.

Frequently Asked Questions

Is Wells Fargo Advisors a fiduciary?

The firm is registered with the SEC as an RIA, which means that it and its representatives must carry out a fiduciary duty. However, the company mentions in its CRS document that its advisors might make money from commissions. Be aware that this could, in some cases, present a conflict of interest. If you suspect any conflicts, it’s always a good idea to ask for full transparency from your respective professional.

What is the Wells Fargo Advisors Financial Network?

The Wells Fargo Advisors Financial Network (FiNet) is a network of independent financial advisors who carry affiliation with the firm. So, while they operate under their own name and employ their own advisors, they use the company’s products and have access to their investment strategies.

How much money do you need for Wells Fargo Advisors?

The firm offers services to a diverse clientele, with account minimums ranging between $25,000 and $50,000 for its investment advisory programs. You’ll need a higher net worth for financial planning services, though. Its in-person planning offering requires at least $1 million in assets.