3-star brokerage rating

Wells Fargo Advisors Review. Full Service Broker Wealth Management Account Fees 2020.

Wells Fargo Advisors Brokerage Review

Founded in 1852, Wells Fargo & Company is one of the largest financial services companies in the United States. Its full-service brokerage, Wells Fargo Advisors, a non-bank affiliate, is a leader in personal finance, wealth management, and retirement planning. With more than 19,000 registered representatives across the nation, Wells Fargo Advisors is the third largest full-service provider of retail brokerage services in the U.S. They specialize in personalized financial planning for individuals and offer plans and services comparable to other full service brokerages such as Merrill Lynch, Morgan Stanley, and Edward Jones.

Where to Start

When evaluating a full-service broker, commission rates and other fees are important, but more important are the customer-broker relationship as well as the fiduciary reputation of the brokerage. Finding someone you trust to give sound financial advice is important. Trusting the brokerage with your money is of the utmost importance.

The financial services community is rife with financial frauds, Ponzi schemes, and other less than honest business practices. One need only mention Enron, Bernie Madoff, the Savings & Loan Crisis in the 1980s, or the housing bubble and resulting “Great Recession” of the last decade to be reminded that not all venerated individuals or institutions have your best interests in mind when you give them your money to invest. Reputation and trust are paramount, both of the institution and the individual assigned to manage or advise a brokerage account.

Wells Fargo Advisors has built a good reputation over the decades and its registered representatives are held to a high standard. Still, an investor must get to know and trust any individual before deciding that a particular advisor is capable of giving appropriate financial advice that will help the investor reach her financial goals with an appropriate level of risk.

Wells Fargo Advisors offers these investment options:

  • Stocks
  • Bonds
  • Mutual funds
  • Options
  • Annuities
  • Insurance
  • IRAs
  • Certificates of Deposit (CDs)
  • Futures, commodities, and Unit Investment Trusts (UIT) are investments suited to wealthier, more sophisticated Wells Fargo clients.

Working with a Personal Financial Consultant

The goal of the financial consultant is to know the client well enough to confidently recommend investments that are suitable for the client and are intended to help the client reach his/her financial goals. This may include doing a detailed financial plan, but informal discussions with the client may be sufficient in some situations.

The advantage of a brokerage such as Wells Fargo Advisors is they will take all the time needed to understand a client’s risk tolerance, financial goals, and degree of investment sophistication, then suggest and explain investment options the advisor feels are appropriate for the client.

Because the financial consultant takes the time to understand fully a client’s financial situation, Wells Fargo Advisors offers multiple levels of investment advice, management, and monitoring. They are:

  • Fund Advisory Programs
  • Separately Managed accounts
  • Unified Managed accounts
  • Financial Advisor-directed Portfolio Management
  • Client-directed Portfolio Management

These programs run the gamut of client involvement from entrusting one’s entire portfolio to either a designated portfolio manager or the financial advisor, to setting up separate or unified managed accounts to take advantage of multiple investment advisors, to using a “fund of mutual funds” approach that features minimal input from a financial advisor other than periodic rebalancing of a portfolio.

All these programs come at a cost, and the investor should fully understand his capacity to manage his own finances and weigh that against the competence and trustworthiness of the portfolio manager when determining the personal value of specific services.

Wells Fargo Advisors Review

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Wells Fargo Advisors Commissions and Fees

Wells Fargo Advisors’ commission structure is buried deep in a fee statement that downplays individual transaction costs and emphasizes the annual fee structure of the company’s investment service pricing.

Their premier account, the Command Asset Program, is the base account from which annual fees and specific charges are computed. The basic annual fee for a household, no matter how many accounts are held, is $100. The fee is waived if balances are above certain minimum levels, generally over $250,000 for 2020. Fees are reduced or waived for regular activity including monthly direct deposits and signing up for paperless documentation.

Above that, trading commissions for normal securities such as stocks, bonds, options, and mutual funds are $7/trade. No-load mutual funds may incur an “accommodation fee” of $50 when purchasing a no-load mutual fund.

Not shown on the “Annual and Operational Fees” statement are the fees charged for administering the particular advisory services such as the Unified Managed Accounts and the Financial Advisor-directed Portfolio. Typical annual fees for these sorts of accounts run about 1.00%-2.00% of assets in the account (investors should be able to find better priced Financial Advisor. ) These fees should be disclosed before the investor signs up for any specific level of asset management.

Customer Service

Wells Fargo Advisors is a traditional full-service brokerage that relies on its reputation, expertise, training, and vast resources to provide high-quality personalized customer service. Considering the fees an investor expects to pay for those services, exemplary service should be the standard. Personal dealings with certain financial advisors and the home office staff confirm a high quality experience.

Wells Fargo Advisors Review Summary

Full service brokerages such as Wells Fargo Advisors are not for everyone. Potential customers should compare annual fees plus commissions to the trading costs of a discount broker, especially if the investor trades infrequently. Paying someone 1-2% of your assets per year just to send out quarterly statements for an infrequently traded account worth less than $10,000 or so isn’t cost effective and substantially diminishes portfolio performance. Discount brokers, such as TD Ameritrade, that don't have annual fees and charge small commission on per trade basis are attractive alternatives.

For a professionally managed portfolio that costs a fraction of what Wells Fargo Advisors are charging, Ally Invest Cash-Enhanced Managed Portfolio with their 0.0% management fee is a great option.

High net worth individuals should consider Wells Fargo Advisors. Their investments, programs, account options, and services are broad and comprehensive. Fees are competitive with other full service brokers. Representatives are licensed and well trained. Wells Fargo Advisors is a solid choice when considering a full-service brokerage.