Wells Fargo (WF) is known for ..... Banking. The number of retail branches is impressive but there are some sides of Wells Fargo that are not there yet. Let's look at two: 1) Mortgages - Origination and 2) Invesetment Management. Both parts of Wells Fargo are immature, at best and are worth looking deeper into.
For mortgages, WF placed bets that housing would recover and there was a significant layoff in 2013. In 2008, the bank wrote bad mortgages and they have to now work with Fannie Mae on restitution in the form of a fine. The bank buys a lot of MBS and manages the models conservatively. My experiences with WF Mortgage is less than stellar. WF really has not offered any additional guidance in regards to new products, options, etc. So, customer service is not very proactive.
In regards to Investment Management, I entered into a trial with Wells Fargo to see how they would do with managing money. Well, YTD in 2014, they are (-3.1%) while the S & P 500 Index that I use to benchmark investments is about (.36%). Looking at the big picture, Fidelity Funds are not doing very well YTD so WF is really just doing what others are doing which does not justify a 1.5% management fee.
Let's look at research recommendations. Two options were recommended that focused on index funds. At best, index funds will NOT do very well in 2014 given the choppy investment environment. Specific sectors, industries, equities, and ETFs are the way to invest in 2014 until the economy gets a footing. This is driven by: 1) ObamaCare with the healthcare industry still adjusting, 2) Govt. Shutdown that caused slowdowns of major programs, and 3) The Weather that wiped out retail in Dec and early Jan.
Research recommendations should do no harm. In the middle of 2013, Europe and China were recommended. I had a feeling that the economies were not strong and chose to not follow those recommendations. It turned out that was the correct choice. Investment management is a combo of 1) Value of a DEAL - Buy Low, 2) Growth Potential, 3) Timing on when an asset will appreciate or depreciate. All 3 were wrong by the WF recommendation.
Service is supposed to be a core facet of WF. Well, asking to set up an online portal for myself was met with 'Do It Yourself.' While I'm technically astute enough to do this, I would have expected that this was set-up, already. In trying to reach people at WF, you get pushed to 'helpers' who are probably entry-level teller promoted to a new role. Not much knowledge going from a teller to an investment professional.
My conclusions. If I wanted to get average returns, I would use an Index Fund like a Vanguard or iShares ETF. If average is negative or .x%, that is not investment management, that is following a herd.
Look at the return statements that you get, do they justify the 1 - 1.5% off the top of a fund return? I believe the answer is NO. Would I recommend Wells Fargo for Banking, Mortgages, or Investment Management? NO, I would not.
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