2020 Comp: UBS Delays Start of New Grid Hurdles for Teams
UBS Wealth Management USA is giving brokers who receive team-based payouts more time to qualify for higher revenue requirements going into effect next year, after some negative reaction to the hurdles introduced last week in the 2020 compensation plan.
The new qualifications were set to take effect on January 1.
The “combined” grid that pays all team members at least 48% of revenue generated will require team production of $6 million, up from $5 million currently. Individual team members must still have average annual production of $1.2 million as of January 1, up from $1 million currently.
The “highest producer” grid that awards all team members the payout of the top team earner will require team production of $3 million, up from $2.5 million currently. The average team member’s production as of January 1 must be $900,000 for the highest-producer payout, up from $750,000 currently.
“We are announcing these changes today based on Advisors’ feedback,” Chandler wrote. “We believe teaming enables our Advisors to deliver broader and deeper advice to clients, as well as create a more holistic wealth management experience.”
UBS is not delaying the higher hurdles that go into effect on January 1 for the bulk of its brokers who are paid solely on their individual production. The wirehouse has raised the threshold hurdles on its standard grid, meaning many brokers will have to produce $200,000 more under the 2020 grid to hit their 2019 payout levels.
The standard payouts range from 28% to 50% across 15 revenue bands, with the lowest payout kicking in at $300,000 of annual production (up from $200,000 in 2019) and the highest at $12 million (up from $10 million). UBS and its rivals pay “penalty” rates below their lowest payouts to brokers who fail to meet a minimum production level based on their years of experience.
UBS and most of its competitors have been encouraging solo practitioners to combine onto teams on the theory that dividing client-management and advisory roles leads to more time for prospecting and asset-gathering and makes it more difficult for en masse departures.
A UBS spokesman declined to comment on Chandler’s memo.
Modifications of new compensation policies are rare on Wall Street, but UBS two years ago temporarily reprieved a controversial plan that would have prohibited brokers who collected performance bonuses from calling their former clients if they left during 2018.
Ameriprise Financial last week canceled monthly fees it planned to impose in 2020 on independent brokers who used its discretionary advisory account platform after backlash from the brokers.
—Jed Horowitz contributed to this story.