For banks, "financial literacy" often means educating low-income or underbanked people about mainstream financial products. But for the head of Wells Fargo's (WFC) wealth-management business, it's also a means of getting more business from existing bank customers.
"We're trying to build greater client literacy around all things financial," David Carroll, a senior executive vice president at Wells and the head of its wealth, brokerage and retirement business, said in an interview last week. "That's helping people get in touch with what their own financial goals are, buying the house, putting their kids through college … and charting a course to get there that's not happenstance."
Like several of its competitors, Wells Fargo is increasingly hoping to gain new business from its wealth-management operations. Banks are looking for new sources of revenue as regulations and sluggish loan demand eat into traditional sources of profit; some are trying to boost that revenue by selling clients financial advice and products to help them manage their savings, investment or retirement funds.
Some of Wells Fargo's biggest competitors, including JPMorgan Chase (JPM), have concentrated their wealth efforts on the upper end of the income spectrum. But Carroll claims Wells Fargo can provide wealth advice to - and get business from — a broader array of customers.
"We play in almost every strata of wealth, from mass and mass affluent to high net worth, and we are equipped to serve clients in each of those places," he said.
But Carroll acknowledged the difficulties of making a profit by offering money-management advice to people with less money: "It's very difficult to serve the true mass market, the beginning investors. It's not just a matter of having a competitive functioning website," he said.
Wells Fargo bankers reliably tout the amount of business it gets from cross-selling different financial products to existing customers, and Carroll was no exception; he said that 10% of his division's revenue in 2012 came "as a direct result of a handoff from some other part of Wells Fargo."
Carroll was speaking last week after a breakfast presentation his division held for reporters at New York's Four Seasons hotel. Several of Wells Fargo's senior executives and investment strategists spoke at the event, which focused on their advice for investors in the current market environment.
