Thank you all for joining us today.
I want to welcome the 1,200 Wells Fargo team members in attendance at the Knight Theater in Charlotte, and the thousands across the country who are watching TeamTV and via webcast.
We’re meeting today because as your new CEO, I wanted to lead a conversation about the sales practices issues that have so clearly harmed our company’s reputation over the past several weeks.
I’ll begin by speaking on behalf of our entire leadership team, many of whom are in the audience today. On their behalf, I want to apologize to all of you. I want to say we’re sorry for the pain you have experienced as team members as a result of our company’s failures.
Our senior leadership is committed — and I am personally committed — to taking the decisive actions and to learning the necessary lessons to ensure our company and our customers are never susceptible to the kinds of behaviors and failures that got us to where we are today.
“My primary objective is to restore trust in Wells Fargo — restore pride in our company and mission. That may seem like a long ways off today, but I promise you we will.”
My primary objective is to restore trust in Wells Fargo — restore pride in our company and mission. That may seem like a long ways off today, but I promise you we will.
And know our senior leadership is committed to doing the same and we won’t rest until we are successful.
We have been engaging with all of our stakeholders. We want them to know that at our core our company and you — our team members — are not the people and company that has been portrayed in the news and social media.
However, we are also going to make sure they know that we are not in denial about our reality.
Things went wrong. Problems need to be fixed. Customers and team members were harmed and need to be cared for. And a better and stronger Wells Fargo must emerge out of all of this.
We need to recognize the following:
- There are things that need to be fixed within our culture. There are weaknesses within it that we must change.
- There are ways in which we behaved and did business that did not serve our customers, or our team members, or our investors or the many institutions and communities that rely on us to get things right.
That is not an easy thing to say, especially for a company with a long history of success as ours. But if my top priority as CEO is to restore the trust we’ve lost, then I also need to make it safe to talk about the problems that got us here — no matter where they began, no matter where their responsibility lies.
Take our Community Bank. The vast majority of our colleagues — tellers, platform and phone bankers and branch managers — did the right thing and do the right thing every day on behalf of our customers and company. But there also was something wrong, something bigger that we failed to act on sooner and more aggressively. We need to accept this, learn from it and become the better Community Bank that I know that we can become.
But I want to be clear: The job of fixing and learning, and building a better Wells Fargo for tomorrow is a job for our entire company — not just for the Community Bank.
Why is that? First off, I think we can agree the trust we’ve lost has affected all of us, so the effort to restore it needs to involve all of us, too. Wells Fargo’s great reputation has been an enormous asset for all of us and it will take all of us to restore it.
This means being champions and stewards for the company, our brand and our reputation.
We also can’t be complacent, anywhere inside our company, whether your team serves customers directly or supports teams that do.
“Things went wrong. Problems need to be fixed. Customers and team members were harmed and need to be cared for. And a better and stronger Wells Fargo must emerge out of all of this.”
So we need to come together, as one team and one company. And how quickly we do will determine how quickly we can win back the trust we lost and become the stronger and better Wells Fargo we must become.
Our history has shown that when we pull together and lean into a challenge, we accomplish great things. And I have no doubt that we will again.
Here are two ways you can help immediately — because I know many of you are eager and ready to help.
First, take care of our customers. Understand their needs. Address their concerns and provide great service and advice. Done ethically and with their interests at heart, it’s the most important work we can do to restore trust in our company.
Second, get engaged in understanding our reality and how we’re moving forward. When you do, you’re becoming part of the process of restoring trust in Wells Fargo by putting yourself in a position to be a knowledgeable and credible advocate for the company. Talk to your managers. Use the content we’ve made available on Teamworks. And, most importantly, stay engaged with our stakeholders.
Simply showing we care and we’re committed to regaining the public’s trust is invaluable.
It’s also important to note there are no quick fixes to our challenges. You also should expect more tough headlines, as additional accountability actions occur, and other investigations and reviews are completed. Some of that is going to be very painful for us.
Still, we can’t let any of that paralyze us. We must act decisively to move forward — serving customers, engaging stakeholders, building our future.
Understanding our reality
I think it all begins with understanding where things broke down, and where we failed — as a culture, a company and as leaders. And, honestly, we are still on the journey of figuring all of that out. Some of that work involves things we are driving as a company. Some of that involves investigations and reviews that are driven by others and are entirely out of our control.
No matter, here are some reasonable conclusions I think we can agree on:
- We had product sales goals that sometimes resulted in behaviors and practices that did not serve our customers’ or our team members’ interests. And we were slow to see the harm they caused.
- Second, despite our ongoing efforts to combat these unacceptable bad practices and bad behaviors, they persisted, because we either minimized the problem, or we failed to see the problem for what it really was — something bigger than we originally imagined.
- Third, we failed to acknowledge the role leadership played, and, as a result, many felt we blamed our team members. That one still hurts, and I am committed to rectifying it.
- Fourth, there were warnings signs in hindsight that we should have heeded sooner.
- And finally, our leaders should have invited inspection more often and welcomed credible challenges to how we operate.
All of this was unacceptable. My pledge to you is that we will keep these lessons, and others we discover, part of our ongoing conversation, so we may learn from our mistakes.
Steps we are taking
In the meantime, we won’t wait for all the answers before we take action. We need to trust ourselves and what’s good about our company. This has already involved a wide array of actions to address sales practices issues. Expect more to come.
In the meantime, there are several I’d like to highlight.
- We’ve changed the leadership of the retail bank.
- We have also changed the retail bank’s risk management processes. This is consistent with the reorganization of enterprise functions we have conducted across the company to create a stronger risk and control foundation that allows senior team members across the bank to provide more independent, credible challenges to how we operate.
- We’ve recommitted ourselves to our customers’ overall experience, eliminating product sales goals for all retail banking team members.
- Next year, we’ll introduce a new performance plan for retail bankers that will be based on customer service, growth, and risk management. Our goal: We want nothing to get in the way of doing what is right for customers.
- We’ve made system and process enhancements, including sending automated confirmation emails to our customers, and acknowledgements for credit card applications. We also have improved multi-factor authentication to protect our customer’s information.
- This year alone, we have committed more than $50 million on enhanced quality assurance monitoring.
- We’ve expanded an independent third-party mystery shopper program, adding risk professionals to provide greater oversight, and expanding our customer complaint servicing and resolution process.
- We’re contacting affected retail and small business customers, whether they have a checking, savings, credit card and or unsecured line of credit with us to ensure their concerns have been addressed. And we’ve established a dedicated toll-free number for any customer with a sales practices concern to contact us.
- We’re also determining if any secondary harm has occurred for our customers. For example, if their FICO score was affected by an unwanted credit card, we want to address that.
- We are doing a thorough review of our EthicsLine processes, because it has been disturbing to hear claims of retaliation against our team members.
- We have created a special HR team to assist former team members that are still eligible for rehire who left Retail Banking for performance reasons.
- We’re surveying team members to understand their views on our company’s approach to ethics and integrity.
- We also will be engaging an independent consultant who will be approved by our regulators and who will be reviewing sales practices and customer harm in the Community Bank. In addition, we will engage a separate independent consultant to review sales practices across the company. Our goal is to go beyond the requirements of the consent orders.
- And we will be engaging outside independent culture experts to help us understand where we have cultural weaknesses that need to be strengthened or fixed. We know we don’t have all the answers and want to have the courage to learn from others.
The road ahead, our strong foundation
I would like to close things out with some things I’d like for all of us to keep in mind, as they will be critical to the success of our reputation recovery.
First, as I mentioned, this work to restore trust in Wells Fargo is going to play out over a long period of time — weeks, months, maybe years. So, let’s be patient and strong. Let’s demonstrate perseverance.
Second, transparency will become increasingly important. We want to increase transparency with you and all of our stakeholders. You saw and heard that as John Shrewsberry and I walked our investors through our third quarter earnings on October 14th. I will continue to provide that transparency at my first CEO Town Hall on November 10th in Des Moines.
“My pledge to you is that we will keep these lessons, and others we discover, part of our ongoing conversation, so we may learn from our mistakes.”
Finally, the point of all our hard work will be to return our company to greatness.
How? By making sure that our work — today and going forward — stays true to the very things that made us great in the first place.
For example: Our values. I cannot think of a better set of values to live and work by: People as a Competitive Advantage,Ethics,What’s Right for Customers,Diversity & Inclusion,Leadership.
Our failures are not the result of our values. I suspect they are the result of some of us forgetting to be guided by them. But for the vast majority of us, it has been these values that have shaped us into great leaders and teammates, and advisors and servants to our customers. Let’s never forget this.
I would say the same about our Six Priorities: Putting Customers First, Growing Revenue,Managing Expenses, Living our Vision and Values, Connecting with Communities and Stakeholders, and Managing Risk. In the wake of the financial crisis, these priorities enabled our growth and helped us not to forget the kind of company we wanted to be each day when we reported to work.
And, of course, there’s our mission: “We want to satisfy our customers’ financial needs and help them succeed financially.”
This is why Wells Fargo exists. If our customers don’t succeed, we don’t.
Is it that simple? Of course not. It’s hard work and we know it, but the mission remains worthwhile because of the pride and satisfaction it gives us, and because of the opportunity it offers us to deliver value to customers, investors and communities.
This is our legacy and our future, and it’s worth fighting for.
Thank you for the hard work you are already doing.