Amid scrutiny, retired Wells Fargo wealth exec stands behind unit's integrity

The retired head of Wells Fargo’s wealth and investment management group said Friday he stands by the unit’s track record as the business faces scrutiny over customer referrals within the company.

“I’m proud of what we accomplished and feel good about the integrity of the business,” David Carroll, who retired from the company last year, told the Observer Friday. “And I feel really good as a meaningful shareholder of where (Wells Fargo CEO) Tim Sloan is taking the company.”

In a securities filing last month, Wells Fargo said its board was reviewing "certain activities" within the wealth and investment management group following inquiries from federal agencies.

The probe is looking at "whether there have been inappropriate referrals or recommendations" involving 401(k) plan rollovers and referrals of brokerage customers to other investment businesses, among other issues.

The Wall Street Journal has reported that the Justice Department and Securities and Exchange Commission are investigating the wealth-management business.

The disclosure was the latest black eye for a company that is still recovering from a scandal over sales practices in its community bank in which branch employees allegedly opened millions of fake accounts to meet aggressive sales goals.

Carroll retired from Wells Fargo in July after decades of senior roles at Wells Fargo and its predecessors. He played a key role in leading Wachovia through the financial crisis, resulting in the 2008 merger with Wells Fargo. He remained at the combined company as the head of wealth and investment management, serving as one of the bank's highest-ranking executives in Charlotte.

In the brief interview with the Observer, Carroll noted that he doesn't speak for Wells Fargo and would not discuss specifics of the investigation.

Rebuilding trust

Wells Fargo's wealth and investment management unit, now led by Jon Weiss, includes the Wells Fargo Advisors brokerage unit, as well as retirement, private banking and asset management businesses.

In a story Thursday, Bloomberg News reported that some clients of the unit were steered into investments that maximized revenue for the bank and employee compensation. The investments weren’t always in the best interests of clients, the story added.

In a response published on the bank's web site, Weiss said the story "did not accurately reflect how we do business and serve our clients," adding that: "We at Wells Fargo stand by our approach to client investment advice that is tailored to the individual."

In a statement, Wells spokeswoman Shea Leordeanu said the company's top priority is rebuilding trust with stakeholders.

The disclosures in last month's securities filing "reflect our continued commitment to transparency, even when all of the information or the final outcome of a matter may not be known just yet," she said. "We are making significant progress in our work to identify and fix any issues, make things right, and build a better, stronger company."

This story was originally published April 6, 2018 at 4:06 PM with the headline "Amid scrutiny, retired Wells Fargo wealth exec stands behind unit's integrity."