Wells ready to cancel loans to international advisers ahead of release
Finding a new job can be difficult in any industry, but financial advisers who move to another company can often have a cloud hanging over them that can prove costly – repayment of promissory notes.
Promissory notes are loans given to advisers when they join a business, often under the guise of a signing bonus or retention bonus, and which they must repay over a number of years.
The problem arises when they leave their business before they’ve paid off the loans, as this can leave them on the hook for tens of thousands of dollars with their former employer if a deal isn’t struck.
Since Wells Fargo revealed it was shutting down its international wealth management business earlier this month, questions have been raised about how it will deal with this issue. There will likely be a considerable number of affected advisers who still have an outstanding loan related to the promissory note and will soon be moving to another company or to https://bridgepayday.com/.
Sources say Wells Fargo executives are reviewing promissory notes given to international unit advisers and are considering canceling loans on a case-by-case basis.
Consultants to the cable company who have all or the vast majority of their book focused on international customers are given priority in this review, sources said.
Wells Fargo is also seeking to ensure that advisors who have accepted deferred compensation – salary or bonuses they were to receive by a specific date – are also paid to them. Typically, advisers who leave a business would lose such a payment.
The news will be a relief for some of his advisers, as there have been numerous recent cases of major cable companies, including Wells Fargo, suing former advisers using both the Financial Industry Regulatory Authority (Finra) and the courts to compel them to repay promissory notes. in its entirety.
A general pardon package for all of its international advisers is not being considered, sources say, as was the case when RBC left the international space in 2015.
RBC’s international wealth unit was much smaller than Wells Fargo’s – the former had almost 40 brokers in the unit, while Wells had over 330. In addition, RBC’s exit time was a lot. shorter, about 60 days.
“It’s not a straightforward process, however,” said a source familiar with the Wells Fargo shutdown.
The more than 330 advisors in the international unit have a wide range in terms of exposure to offshore and onshore clients, with some having a large portion of their portfolio comprised of domestic US clients.
As such, the company’s priority is to ensure that the most affected advisers can land on their feet “ without the note getting in the way, ” sources said.