Trade show organizer Jill Eckhaus is driving growth at Wells Fargo Investments LLC, the Newport Beach-based investment services arm of Wells Fargo & Co.
Eckhaus started with a checking account at Wells Fargo. She later added a home loan and one for her business, Orange-based Afcom Inc., which puts on computer trade shows.
Now Eckhaus has started using the San Francisco-based bank’s investment services.
That’s the goal, said John Evans, a vice president and regional manager of private client services in Newport Beach. About 6% of Wells Fargo’s banking customers have brokerage accounts, which probably is typical among big banks, he said.
Rivals Bank of America Corp., Wachovia Corp. and Washington Mutual Inc. have similar strategies.
About 4% of Wachovia’s local customers also have investment accounts, a spokeswoman said. Bank of America and Washington Mutual declined to comment.
For the past decade, Wells Fargo Investments has grown from $400 million to $3 billion in money under management in the county. It averages 20% revenue growth each year, according to Evans.
Wells Fargo Investments is the sixth largest stock brokerage in Orange County, according to the Business Journal’s October list. In the past year, it has added 40 people to its 190-person local workforce of financial advisers and support staff, a 27% increase.
In all, the 20 largest stock brokerages here saw a 4% gain in workers in the past year.
Like most investment advisers in the county, the growth in millionaires and retirement savers has been a boon for Wells.
It also has been able to do what every big bank has hoped to do since the deregulation of the 1990s: turn checkbook and savings account holders into more lucrative investors.
The typical Wells customer has five accounts with the bank, Evans said.
Existing customers are a key source of business for Wells’ investment arm. The bank has $9 billion in local deposits, second only to Bank of America. It’s been growing deposits and branches here.
Cold calling and direct mail are part of Wells’ strategy. A big push has come from making investment and other services readily available to bank customers.
Even tellers are part of the action. They’re trained to offer the company’s investment services to customers in line to deposit checks or apply for a loan, Evans said.
Investment advisers are stationed at branches.
“If someone wants financial advice they just walk down the hall,” Evans said.
Many of those who’ve gone from banking to investing are entrepreneurs, according to Evans.
When Eckhaus grew her business and needed more money, she said it was natural to tap Wells for business banking.
Eckhaus, who used a business loan from Wells to buy her company, has been a customer for 10 years.
For someone with extra cash, mutual funds are a common sell, Evans said.
For those with lots of cash, the process is more involved.
To qualify for the company’s wealth management programs, a customer typically has about $1 million in balances.
They meet with a team of advisers that could be anywhere from two to five people, Evans said.
The team gives advice on managing investments, estate planning and banking services.
About 20 of Wells’ 90 or so local branches have licensed brokers, said Kim Young, an executive vice president and region president with Wells.
Wells has had brokers in branches since 2003, when the company made OC its own region and appointed Young to oversee it.
Wells tries to cross sell all of its clients, she said. Some need help investing, Young said, while others need advice on paying off debt or retiring.
The company’s cross selling has been helped by making small business loans, she said.
The bank has to walk a fine line between drumming up business and annoying the day-to-day banking customer who just wants to deposit a check or take out money.
Customers are given the option to not be asked about investment or other services, Evans said. Accounts are flagged if a customer doesn’t want to be solicited, he said.
“This isn’t hard selling,” Evans said. “We just ask if they have an interest.”
Financial advisers for Wells start at the branches and are licensed by industry group NASD Inc. with oversight from the Securities and Exchange Commission.
The advisers have the chance to become certified financial planners through a program at the University of California, Irvine, and then become private bankers with the company, Young said.
Wells’ investment services division has four parts.
Private client services deals with those with a $1 million or more balance. It offers advice on selling businesses, tax planning, brokerage services and insurance.
Trust officers help with estate planning and philanthropic giving.
The brokerage unit handles mutual fund and stock investments.
The investment management arm picks portfolios for clients, whose investments typically are larger than those handled by the brokerage arm.
The growth has been good for hiring.
In the past five years, the bank added 450 local jobs, a 17% increase to about 3,000 people in OC. Next year it plans to hire more as it opens three branches.
The investment services business accounted for 15% of Wells’ job growth in the past five years. Its retail and commercial businesses each grew 3%.
About a quarter of the growth came from mortgage-related jobs.
The bank recently saw a $1.4 billion quarterly loss related to mortgages but has gotten off lighter than other banks in the home lending downturn. Wells sold off most of the mortgages it made and didn’t invest heavily in mortgage-backed securities.
Even with upheaval in the mortgage market, no layoffs are planned, Young said.
