Of the bank’s 72 million retail customers, 22 million are millennials or members of generation X, typically defined as born between 1965 and 1995, according to Jon Weiss, a longtime Wells Fargo executive who took over as head of that business some five months ago.
Wells Fargo Inc on Monday launched a new robo-adviser to give first-time investors a low-cost option to invest, joining other financial firms in the hunt for tech-savvy customers looking to enter the markets.
At a presentation unveiling the tool Monday in New York, Wells Fargo executives said the target market is Wells Fargo customers who already have another type of online account with the bank but do not yet have an investment account. Wells Fargo first said it was preparing to launch the robo-adviser, called Intuitive Investor, in February.
A very small percentage of them, however, currently invest with the bank’s Wealth and Investment Management unit, he said.
A push by Wells Fargo to get existing customers to buy more of the bank’s products, known as “cross-selling”, was at the heart of a fake accounts scandal that has dogged the bank for more than a year.
“Cross selling is a word we’re not using a lot these days”, said Weiss, “but what’s not a dirty word is trying to solve your clients’ needs.”
The robo-adviser, developed with technology firm SigFig, works with Wells Fargo’s online banking services and also gives users access to the Wall Street bank’s market research and financial advisers.
The Intuitive Investor allows users to start with a minimum $10,000 investment, at half a percent annual advisory fee. Existing customers will be offered a discount.
Wells Fargo is the latest Wall Street brokerage to join the robo-adviser party.
Bank of America Corp launched its Merrill Edge Guided Investing earlier this year and independent firm Raymond James Financial Inc debuted its Connected Advisor in January.
Wells’ scandal began after regulators found that employees opened as many as 2.1 million deposit and credit card accounts without customers’ permission. Wells Fargo later revised that number to as high as 3.5 million, and has since found problems in other areas, including auto insurance and mortgages. Multiple investigations and lawsuits are still pending.