Wells Fargo is raising the monthly revenue threshold for wealth advisers to qualify for a higher payout and linking deferred compensation more closely to client-asset growth. The changes take effect in 2027 and could affect advisers’ immediate earnings as well as longer-term retention incentives. The firm estimates advisers will need to generate about $15,000 more revenue a year, or roughly 2% more, on average to offset the higher threshold.
Monthly threshold rises to $16,000
Under the current plan, advisers receive a 22% payout on the first $13,500 of revenue generated each month and 50% on revenue above that amount. In 2027, the threshold for the higher payout will increase to $16,000. Sol Gindi, head of Wells Fargo’s adviser business, said it is the first adjustment to the threshold in about five years.
Gindi said average revenue generated by Wells Fargo advisers has risen 57% over the past five years, with strong stock markets among the contributing factors. The firm has also invested in and restructured its business during that period, changing the size of its adviser teams and the tools available to them. Wells Fargo now wants more advisers to expand their businesses, he said.
The higher threshold does not mean every adviser’s pay will fall by the same amount. Gindi estimated that advisers would need to add about $15,000 in annual revenue, or increase revenue by roughly 2%, on average to make up the difference. Individual outcomes will depend on each adviser’s revenue and business performance.
Advisers could lose about $8,400 without enhanced payouts
Andrew Tasnady, a compensation consultant and founder of Tasnady & Associates, estimated that advisers who do not qualify for the enhanced payout could receive about $8,400 less a year under the higher threshold. Advisers may offset some of the gap by generating more revenue or earning other incentives. For example, arranging a $1 million loan at 75 basis points would generate $7,500 in revenue.
Wells Fargo will retain its enhanced-payout program for eligible advisers. To qualify, advisers must have generated at least $2 million in net new assets over the past 12 months and at least $2 million in additional revenue during the same period. Advisers who meet both requirements can retain 50% of the revenue they generate for the firm.
Deferred pay will depend on asset growth
The firm is also changing compensation paid out over several years. Advisers who grow client assets will see their deferred-compensation rate rise from the current 5% to 10% range to 6% to 11% of current revenue. For advisers whose client assets are flat or declining, the rate will fall to 3% to 8%.
Advisers earning no more than $714,000 a year will not receive deferred compensation. Above that level, payments will be calculated across different tiers.
Gindi said the revised plan favors advisers who expand their businesses, deepen client relationships and draw on Wells Fargo’s broader services. Tasnady noted that Merrill Lynch introduced a compensation plan tied to asset growth in 2018, after which adviser departures increased. Reductions in pay are generally unpopular, he said, but Wells Fargo is cutting deferred compensation rather than advisers’ immediate cash payouts, a distinction from Merrill’s approach at the time.
New incentives for deposits and business accounts
Wells Fargo is adding incentives tied to clients’ banking activity. Advisers who help clients open business checking accounts or move funds into accounts will earn a payout based on the deposited amount: 15 basis points, or 0.15%, for accounts without a preferred credit line (PCL), and 25 basis points, or 0.25%, for accounts with one. A PCL is a loan backed by securities.
Growth in client deposit balances will also qualify for a deferred award. The award will equal 150% of the year-over-year increase in revenue from checking and other deposit business. It will be added to existing incentives for arranging credit lines, mortgages and other one-time products.
Big brokerages set out 2027 pay plans
Wells Fargo was the last of the four large full-service brokerages to announce its 2027 adviser compensation policy. Merrill Lynch and UBS are keeping their basic payout tiers unchanged, while Morgan Stanley is requiring advisers to generate more revenue to maintain their existing compensation levels.
Wells Fargo has historically offered relatively high payouts among large brokerages. Under this year’s plan, an adviser generating $1 million in annual revenue could receive $468,965, less only than at UBS. An adviser generating $2 million could receive slightly more than $1 million, the highest among peers. The effect of the 2027 changes on individual pay will depend on revenue growth, client-asset performance and eligibility for enhanced payouts.