2021 COMP: UBS Keeps Pay Plan Unchanged–Memo to Brokers
UBS Wealth Management USA is not changing its 2020 financial advisor compensation plan in 2021, according to a top executive.
The decision to stay the course for at least the beginning of 2021 follows substantial changes UBS made in its 2020 plan, and comes amid volatile pandemic-influenced markets that has made some firms wary about further disrupting their sales forces. UBS’s approximately 6,000 U.S. brokers had to generate more fees and commissions this year than in 2019 to move into higher payout bands. Payout for UBS brokers will continue to range from 28% to 50% of what they produce.
A UBS spokesman confirmed the memo but declined further comment.
Unlike Morgan Stanley, which similarly raised revenue grid requirements in its 2020 plan but postponed their implementation after Covid-19 hit U.S. shores, UBS advisors operated this year under the tougher standard. The firm, however, delayed heightened requirements for team-based pay incentives.
Chandler’s note alluded to the unusual times.
“As we come to the close of this challenging year, I am extremely proud of how you have remained focused on doing the best for our clients and business,” he wrote. “Everything we do is focused on putting you in the best possible position to deliver a superior client experience, grow your practices, drive revenue and achieve your professional ambitions.”
Chandler reminded advisors that they will receive a 2021 compensation plan acknowledgment form early next year that they must complete by mid-February. UBS embedded in its 2018 acknowledgment form a previously unannounced policy restricting advisors from calling clients for 12 months if they accepted certain bonuses and then left for another firm. It reversed the policy amid a backlash from advisors.
Industry consultants have forecast that firms will make minimal changes in 2021 pay plans, and several firms—including Raymond James & Associates, whose fiscal year began in October—have kept their 2020 plans relatively intact.
Brokerage firms typically make compensation changes annually to promote their latest client-segmentation, asset growth and client strategies. Several have tweaked their 2021 plans with penalties and/or incentives to get brokers to work with wealthier clients, service them through teams and lock them closer by selling them loans and developing financial plans.
Wells Fargo Advisors, however, made a core 2021 payout change on Thursday. It lifted monthly hurdles for its core group of branch system brokers by $1,000, meaning they are credited with just 22% of the first $12,500 to $14,250 they produce each month (higher producers have lower hurdles) before receiving 50% payout on incremental revenue produced.
Merrill Lynch is leaving its payout grid and hurdles unchanged from 2020, but continues to withhold pay on the first 3% of monthly revenue its advisors produce.
Morgan Stanley Wealth Management has not yet released its 2021 compensation plan.
What’s crazy is that this year proved that the firm matters so much less than the advisor. Unchanged comp is sad. They should be upping Broker comp. you don’t need to stay at UBS. Just leave. You don’t need to stay at any firm. Ballsy to act like firms are doing favors by not screwing comp.
RBC shamefully reinstated their small account commission theft policy! The beatings will continue until production improves!
It’s $100k Tim… lol. Any idea what the other firms policies are? Man up buddy.
Hey Pal, Armstrong and Sagissor are the ones who need to “man up!” They need to
apologize for sticking it to their FA’s after decades of telling us that the firm would always honor the right of an advisor to run their practice as they see fit. Now we’re being micromanaged and having income stolen from us Time for an apology and an explanation rather than more BS about “best practices” and lies about policies being “fully vetted” before implementation!
Most advisors are getting 46% payout or less. What are you paying UBS so much for? Guys are paying millions a year out of their business and don’t have good technology, flexibility on team pay and buyouts, or ownership of your business. It’s such a raw deal unless you love the corporate world.
I wish they would have raised production hurdles. Every time they do it we end up bringing in more account and doing more gross. And the firm needs the extra money they take from us to reinvest into the business. They could give more money to senior management. What ever they pay these guy it too little . So it’s a win win .
Have to agree with the guy above. We can over to Ubs 5 years ago and we got paid a lot money it’s only fair that we get paid less. We love the motivation to get more clients .
Wow. You do not owe UBS anything. They bought your business for a price and now can do what they want to your business.