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.