UBS to Advisors: Consider Paying Virus Bonuses to Support Staff
UBS Wealth Management USA is leaving it to its roughly 6,000 brokers to help out their support staff with additional pay to ease their way through the coronavirus pandemic.
“We are offering FAs the ability to submit a one-time compensation payment to offer economic assistance to team associates,” said a manager reading from the message UBS sent last Thursday. The payments cannot be made through “business builder” expense accounts that UBS gives brokers as a benefit because the tax-friendly accounts are earmarked for “non-compensation” purposes, the broker complained.
UBS framed the extra-pay opportunity as a way to help lower-paid associates deal with “the challenges of working remotely and providing home childcare during the coronavirus situation,” said another insider who also spoke on condition of anonymity. Client associates in the brokerage industry are generally compensated through salaries and bonuses jointly provided by firms and brokers.
The UBS notice did not provide guidance on how much additional aid brokers might contribute nor discuss whether the Swiss bank would provide help.
The guidance riled some brokers who were expecting more direct help for their associates from the firms, but was less extreme than policies adopted at some rivals. Edward Jones &. Co. last week told client service associates who work largely in single-broker offices that it is suspending their hourly overtime pay and freezing their wages for one year in order to soldier on during the crisis.
But companies across a range of industries also are awarding special pay to lower-earning employees during the crisis, particularly those who are so-called frontline workers in jobs considered “essential” to helping people through the health and economic crisis. While such hazard pay is going primarily to medical personnel and to hourly workers at supermarkets and shipping warehouses, some financial industry firms have made pay gestures.
Wells Fargo & Co. has granted full-time employees earning under $100,000 a $600 bonus, with an additional $1,250 paid over five weeks to employees required to work from branches or other offices.
Citigroup granted U.S. employees making less than $60,000 one-time checks of $1,000, JPMorgan Chase is giving branch and call-center workers a $1,000 one-time bonus and U.S. Bank said it has boosted the pay of more than 30,000 employees with a temporary 20% hourly increase.
A UBS spokesman declined to comment on whether the Swiss-based bank company has implemented, or plans to offer, such compensation enhancement at a corporate, regional or business sector level.
The U.S. Department of Homeland Security has included the financial services sector as a “critical infrastructure industry” that can seek exemptions to state shelter-at-home orders, but has not offered specific guidance on what operations to keep open or how they should be staffed.
Advisors, who are generally compensated with a percentage of the fees they collect from customers, have not participated in the special programs, although some firms said they are working on a case-by-case basis with those who ask for temporary relief from having “forgivable loan” interest payments deducted from their paychecks.
Some firms also have delayed instituting higher targets for broker compensation, citing the virus-debilitated markets that determine asset-based payouts.
Morgan Stanley postponed by six months grid threshold changes that would have lowered payout for some of its 15,500 brokers, and Merrill Lynch said it will continue paying qualifying team-based brokers an enhanced payout rate without a planned midyear review.