We Called It: Wells Fargo's Securities Foray

However, the bank is now entering a sphere where it lacks a track record. And while investment banking stands to boost revenue dramatically, it also creates earnings volatility at a company that prides itself on prudence and consistency. Atkins has made a point of noting that Wells has outperformed peers because it grew traditional loans and deposits, while avoiding all the fancy proprietary trading activities and exotic securities that brought others down.

Atkins' comments beg the question: How will Wells' foray into investment banking play out in practice? For instance, Wells is still averse to the notion of proprietary trading -- or trading to earn profits for the firm itself, rather than for customers who pay fees for such trading expertise. That has been a profitable, if risky, business for big Wall Street banks in good times. And Wells rankled Wachovia brokers last year by limiting retention bonuses, which could limit the company's ability to attract top talent.

It's unclear whether Wells will be able to maintain its culture of cautiousness and decorum in a world where booming profits get backslaps and every additional zero at the end of a bonus payment is another notch on the belt.

"I think they're jumping the gun on trying to hold onto too much over there," says Lee Munson, chief investment officer of Portfolio Asset Management. "I think they're getting too bloated and taking on too much."

Instead, says Munson, Wells should stick to what it does best: traditional lending. Indeed, while there seemed to be ample opportunity in the investment banking space, Wells-Wachovia's ranks have slipped markedly in league tables this year. The combined firm would have ranked 16 among the top 20 financial advisors in terms of deal value in 2006, 2007 and 2008, according to Mergermarket.