Why Wells Fargo Is Tapping Into Banking Customers

Would you like a brokerage account with that?

Wells Fargo is upping its cross-selling game and looking to tap into the assets held by its vast pool of affluent banking customers. By offering wealth management products — like brokerage or retirement accounts to banking clients with $250,000 or more in assets — the wirehouse is hoping it can squeeze a little more juice from its existing business lines. For the firm’s few thousand bank-based advisors, the plan is starting to gain traction, said Wells CFO Mike Santomassimo.

“We’ve got millions of existing customers in the branch system that don’t do much investments with us — or any at all,” he said at a conference last month. “We did a good job managing the banking side of it. We hadn’t focused as much on the investment side of it.”

Baby, Come Back

Wells Fargo Premier, an account that links banking, investing, and lending services, is a prime example of how the bank is trying to connect its assets to different sides of the house. Customers get certain discounts and perks for being part of the program, which was launched in 2022, including a waiver of annual fees in their Wells Fargo Advisors accounts, no ATM fees, and others, according to its website.

It’s a huge opportunity for firms, and one that could bring in billions of dollars in new revenue industry-wide, according to Matt Zampariolo, an analyst with Cerulli. “There are dormant dollars sitting in checking and savings accounts,” he said. The problem is that the number of bank-side customers that also use wealth management services has plummeted in recent years, according to a recent Cerulli report. The research found:

• The percentage of clients using only banking services increased to 56% this year.
• That’s compared to more than 70% of customers who used some combination of wealth management and traditional banking services in 2017.

Although the math can get fuzzy, Zampariolo said the benefits are projected to be massive. “While we can’t assign a specific total addressable market, it’s more like billions,” he said.

Sharing Is Caring. Cross selling has been a mainstay in the industry for decades, but the majority of major brokerages are simply missing the boat, according to the report. Instead, bankers should think about adding one-time referral bonuses and other non-monetary incentives, like employee of the month awards, to help spur new business. They help make sure bank branches are looking at the wealth and brokerage businesses as core offerings, Zampariolo said.

Apparently, Wells got the memo. “The good news is when you can do a good job on the investment side, they’ll bring in more banking too,” Santomassimo said.