Rumors have resurfaced that
Wells Fargo & Co. is talking with UBS AG about acquiring the Swiss bank's retail-wealth-management operations in the U.S.
Industry participants and recruiters say they've been hearing from advisers that the firms may be having discussions about a possible tie-up. The rumors may have been inspired by
interviews Wells Fargo CEO John Stumpf had with CNBC and Dow Jones last week in which he suggested that the company was potentially interested in an acquisition in the wealth management area. “In the wealth and retirement business we are suboptimized,” Mr. Stumpf told Dow Jones. “If we could jump a curve with the right deal, that's great.”
And a curve it would be, according to executive recruiters. Wells Fargo currently has in the neighborhood of 15,000 advisers, many of whom have come from scores of other brokerages —largely through acquisitions. That list of acquisitions includes Wachovia Corp., A.G. Edwards & Sons Inc., Prudential Financial Inc. and First Union Corp.
The 6,800 or so UBS Wealth Management Americas advisers would vault Wells Fargo's wealth management business ahead of Bank of America Merrill Lynch and Morgan Stanley Smith Barney LLC in terms of adviser head count. It would also create another huge integration challenge for a company still rationalizing its advisory platform. “As we speak, Wells and Wachovia are still trying to integrate into one firm,” said Mindy Diamond, president of Diamond Consultants.
The resulting behemoth also would have trouble staying out of its own way, said Mark Elzweig, who manages an executive recruitment firm in New York. “They would have more than 22,000 advisers and they'll cannibalize their own business,” he suggested. “There would be six guys working at the country club for the same firm.”