Wells Fargo will discontinue its Abbot Downing wealth-management brand and fold the unit, which catered to the ultra-wealthy, into its larger private bank, according to an internal memo seen by The Charlotte Observer.
The move continues the ongoing consolidation underway in the bank's wealth management division. Last month, Wells Fargo sold its mutual fund business to two private equity firms for $2.1 billion.
"The change we're introducing today is only to the name under which we'll do business," said Barry Sommers, head of Wells Fargo's wealth and investment management division, in the Wednesday memo.
"As we begin the work to transition the brand, I want to reiterate that we will continue to maintain and grow our ultra-high-net worth business," Sommers said.
Abbot Downing was announced in 2011 to combine multiple existing units at the bank that served the rich. It was named for a manufacturer of Wells Fargo stagecoaches in the 19th century. The unit manages over $47 billion, according to its website.
A Wells Fargo spokesman was not immediately available for comment Thursday morning.
Private banking
It is common for major Wall Street banks to have separate units for the very wealthy, staffed with advisors who can deal with the unique challenges of substantial money.
A 2012 notice advertised that Abbot Downing offered "a full suite of services to address the financial, social, and personal dimensions of multigenerational wealth."
Based in Minneapolis, the specialized brand provided much more than a regular financial advisor could offer. Its services ranged from helping prepare young heirs to inherit the family riches to crafting a specialized tax strategy. It even had a historian on staff.
The move brings the bank closer to its goal of unifying its wealth and investment management business, Sommers said. He said it was the right move "in light of the larger transformation happening across Wells Fargo."
Wells Fargo is in the process of cutting its annual expenses by $10 billion, which executives say is necessary to make the bloated bank as efficient as its peers. A large portion of the cuts will be from streamlining the organizational structure of bank, cutting the numerous layers of bureaucracy despised by CEO Charlie Scharf.
Most of the savings will come from cutting payroll through layoffs and natural attrition. In the fourth quarter last year, headcount at the bank dropped by 6,400 in the fourth quarter to 268,531.
Employees have criticized the process for its lack of clarity and spotty communication. Last year, Scharf acknowledged in an internal webcast that the cost-cutting process was impacting morale at the bank.
