Wells Fargo Pushes for Cross-Sales with VIP Program

Imagine a full day of due diligence with a wirehouse’s experts in estates and trust, tax and other categories, scouring a high-net-worth client’s wealth plan. Is that a good thing? For the client? For the advisor? Or mostly for the wirehouse?

Under Wells Fargo Advisors’ VIP — for “Valued Investor Planning” — program, the wirehouse’s advisors invite clients worth more than $5 million to first undertake a six-week preparation period and then pay a full-day of visits to the brokerage’s headquarters in St. Louis. There, the clients meet with experts in retirement, estates and trusts, long-term care and other categories.

The VIP program started decades ago, but it has evolved and grown. So far this year, around 200 new clients have made the trek to Wells Fargo’s wealth-management HQ. On average, such visits bring in $2.4 million in new assets per visit.

Wells Fargo FAs extol the virtues of the program, but outsiders — rivals mainly — wonder if such a full-court press doesn’t alienate some clients. They contend the program, similar to ones at other wirehouses, is driven by the financial institution’s aim to get the clients to sign up for more services. In particular, critics say, the wirehouses seek to have the clients accept services — such as asset-based borrowing — that commit them to the institution rather than to the advisor.

But Tom Brady, a Wells Fargo advisor in St. Louis whose team manages about $120 million, finds all three constituents — client, advisor and firm — benefit from the VIP program.

“The process starts with the invitation to the client,” says Brady. “It’s a full-day, well-planned-out meeting.” Clients often begin sessions expecting to learn little, since they have typically accumulated wealth and have confidence in their wealth planning. “There is a tendency for them to think they have all their bases covered,” says Brady. “But by the end of the day, we have usually identified or uncovered five or six holes in their plans,” he says. This, he adds, is a result of focusing “on what they say their goals are, and giving them an action plan and suggesting efficiencies” in the whole-day meeting.

Brady’s teammate Paul Waller says this session brings many clients to the realization they can’t do it all themselves — even if they’ve managed things adequately so far. And for Wells Fargo advisors, he thinks the VIP program highlights the advantages of working with a big, multifaceted bank. “There is no way I can be an expert on everything,” he says.

But Ross Gerber of the Santa Monica, Calif.-based RIA Gerber Kawasaki Wealth and Investment Management thinks such programs — on offer at most wirehouses — aren’t universally appealing to rich clients. “Some people really like feeling important, and these types of things work well,” he says. “But it can also seem heavy-handed.”

Gerber, whose firm manages $375 million, says these all-day immersion programs give firms opportunities “to tout all their other services,” but they may not be services clients have much need for. And that’s assuming they aren’t just covers for asset-based lending vehicles.

In this sense, outcomes from these programs may not be wholly positive for advisors in the long run, says Gerber. If the clients sign up for additional services and products as a result of such meetings, and then the advisor wants to shift to another wirehouse or go independent, it becomes less likely they’ll follow.

In fact, says Gerber, this may be the underlying reason wirehouses are so keen to host full-day sessions for well-off clients in the first place.

By Miriam Rosen

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your financial advisor. No strategy assures success or protects against loss.

Gerber Kawasaki, 2716 Ocean Park Blvd. #2022 Santa Monica, CA 90405. Contact us at (310) 441-9393.

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