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 Although Credit Suisse's brokerage business has become profitable in
the last two years, it is too small "to sustainably compete without
significant investment or acquisition," the bank told brokers in an
internal memo
About 275 brokers work in Credit Suisse's 13 U.S. offices. Wells
Fargo operates the third-largest brokerage network in the United
States, with about 15,000 advisers.
Credit Suisse Private Banking, a name adopted to lure wealthy
Americans although it is not a bank, had revenue of about $700
million in 2015 and minimal profit, said people familiar with the
business.
The recruiting arrangement comes on the eve of a strategy update
that Credit Suisse Chief Executive Tidjane Thiam is giving investors
on Oct. 21. Thiam, hired in July, will likely outline shrinkage of
the bank's capital-intensive trading businesses and expansion of its
wealth and asset management in Asia and Africa.
Wells's ability to convince Credit Suisse brokers to join is not a
sure thing. Brokers have been deluged with calls from Merrill Lynch,
Morgan Stanley, and other large firms and wealth management
boutiques as word of the parent bank's strategy leaked out, brokers
and recruiters told Reuters. About 20 moved in the past two weeks,
despite pleas from their managers to wait and hear what a Credit
Suisse-approved rival will offer.
The offers will be made by top Wells executives. David Carroll, head
of Wells' wealth and investment management division, and Wells Fargo
Advisors President Mary Mack are meeting Credit Suisse's New York
City brokers Wednesday morning, brokers said. The allure is that
Credit Suisse clients are wealthier than those of average Wells
brokers.
Since Credit Suisse entered the U.S. market 15 years ago, its
brokers have enticed the wealthy with the cachet of the Swiss name
and products such as initial public offerings and private equity
investments sourced from Credit Suisse investment bankers.
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Wells is offering jobs at its private client group, which work out
of standalone brokerage offices, and in its Wealth Brokerage
Services unit that services wealthy clients of the fourth biggest
U.S. bank in its branches. Several brokers said Tuesday they worry
about the cultural fit.
The agreement does not allow Wells to recruit brokers in Canada or
Latin America, the most profitable part of Credit Suisse's Americas
operation.
The Swiss bank has told dozens of traders and operations employees
in the wealth unit they will be let go after the broker transition
is completed in the first quarter of 2016, according to people
familiar with the decision.
(Reporting by Jed Horowitz; Editing by Bill Rigby, Bernard Orr)
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