Virus Relief: UBS Delays Higher Comp Hurdles for Team Bonuses and Clubs
Acknowledging the coronavirus’ impact on customer service priorities and productivity, UBS Wealth Management USA has postponed by three months stiffer requirements for advisors to qualify for higher team payouts and for 2021 membership in production-based clubs.
UBS also is tossing out higher criteria it planned to impose for 2021 membership in its four recognition councils that offer reward trips and other perqs, using 2019 production instead of what brokers might generate in the current crisis year.
“As you have been there for our clients, colleagues and communities, we want to support you to continue to stay focused on what’s more important—the relationships you’ve built,” Chandler wrote in the memo that brokers received two weeks ago. “As a result, we are extending the effective date for the previously announced changes to teaming and rolling back Recognition Club qualification changes.”
The changes acknowledge brokers’ need to focus on client hand-holding during the health crisis and its economic and market disruptions, the memo indicated. “During challenging times, our value proposition becomes self-evident, with advice never more important nor more of a differentiator,” it said.
The delays may also reflect UBS’ desire to ameliorate broker discontent. The higher team-grid requirements generated backlash when first announced last year, causing the firm to postpone implementation, even before the spread of Covid-19, to July from the planned January 2019 start.
Other retail brokerage giants also have made accommodations to the crisis, including offering recruiting loans based on year-end 2019 numbers rather than on March 2020 12-month trailing numbers, according to several executives and recruiters.
Morgan Stanley has delayed until October 1 its plan to raise payout grid thresholds that would have required many of its brokers to produce more revenue to earn the same payouts as in 2019. The higher hurdles were originally slated to become effective on April 1, 2020.
Merrill Lynch has waived its plan to review at midyear whether teams could continue to qualify for higher payouts than they would receive as individuals. It is allowing current team payout qualifications to remain in place through yearend.
Wells Fargo Advisors and RBC Wealth Management-U.S. have relaxed payout penalties they had planned to impose on “small” household accounts, acknowledging that assets in client accounts have been dented by the coronavirus’s effect on the economy. (The S&P 500 fell almost 34% from an all-time high on February 19 to its March low point after the pandemic spread to the U.S.)
UBS stimulated additional internal pushback when it suggested last month that brokers reach into their own pockets to support staff who might be struggling with childcare and other issues during the shelter-at-home coronavirus crisis.
“These modifications will allow us to prioritize what matters most to all [of] us—people,” Chandler’s memo said. “I am confident that we will emerge from this crisis stronger and as more trusted partners to our clients.”
UBS has not modified across-the-board hikes in production thresholds that took effect at the start of 2020 for individual advisors, other team compensation qualification changes that will still take effect on July 1 or production “multipliers” for recognition club purposes that are tied to generating new business, Chandler wrote.
A UBS spokesman declined to comment on the memo.
So thankful I’m not in the wirehouse games anymore. What does this mean, “As you have been there for our clients, colleagues and communities, we want to support you to continue to stay focused on what’s more important—the relationships you’ve built,” Chandler wrote in the memo that brokers received two weeks ago. “As a result, we are extending the effective date for the previously announced changers to teaming and rolling back Recognition Club qualification changes.”
So in challenging market times focus on what’s important? Why not every day? And then focus on the hurdles when things start to improve. What an absolute joke.
Agreed! If there’s one takeaway from my time at the Wirehouse before starting our own indy firm, it’s this…the firm runs the show! Always have, always will. Lower grids, higher hurdles, cross-selling, lagging technology, decreasing support staff, over-hiring of under-motivated trainees…it’s all completely out of your control. The largest producers have NO VOICE. The only voice comes from the board of directors. Oh yeah, and those clients aren’t yours. Ha ha.
[What does this mean, “As you have been there for “OUR CLIENTS”, colleagues and communities, we want to support you to continue to stay focused on what’s more important—the relationships you’ve built,” Chandler wrote in the memo that brokers received two weeks ago.]
Shouldn’t he have said “YOUR CLIENTS”? This pretty much sums up the thinking of the UBS types, loud and clear.
It’s very clear who the client belongs to at the major wires, the form legally. Read any agreement. They can transfer any account at any time to another advisor. Also very clear in their lawsuits. Thankfully, even with non protocol firms, we all know who the client recognizes as their partner, their trusted advisor.
So much anger here …If you started at a wire house ..they made a huge investment into you ..and got you up and running .. you are successful because of your hard work and the firms model ..if you don’t like it leave ..if you left and went else where you already voted with your feet ..still stop complaining ..some of us are successful in the wire houses mode ..some people are successful in another model ..every person is different ..when you work for someone they make the rules ..when you work for your self you make the rules ..it’s not that ones better ..it’s that they are different ..half of the people that make comments on this site are purposely trying to get you upset ..because they gain from you getting upset ..they are head hunters..:there is nothing negative about UBS relaxing some hurdles during pandemic ..cant understand the anger
The anger is because the proposed changes which are now on hold are excessive, unfair, harmful to the culture and there is no proof they do anything but create rage and bitterness. Advisors are treated like swine by executives who have never been seated across the desk from a real live client and think high net worth clients can be ordered into existence
I agree with you anonymous. Every firm has pros and cons. If you don’t like where you’re at…move. But don’t spend the rest of your life talking smack about where you used to be. It sounds so bitter. I’ve been in the business for 24 years. 19 at Merrill and 5 at UBS. They are both imperfect, but they supported me and allowed me to grow my practice and serve my clients well. I left Merrill because things had changed and felt it was time to go, but I don’t constantly bash my former firm like many do. I feel very fortunate to have the job that I have in the industry I love.
Anonymous, believe me – I’m not a head hunter and I’m not trying to upset or anger anyone. I spent 25 years at a major before taking early retirement and moving on to the independent model some 10 years ago, so I know how both sides work. And you are correct, they are vastly different however, one side is not better than the other, just different. That being said, I’m happy that I chose the route I took a decade ago.
Peace….
Hey Anonymous, Glad you’re happy in your current environment. I came up thru the Smith Barney system and was also very happy. I had 25 years before firing them and taking their 60% share with me. Just sayin’, the RIA model is not that complicated and the grass is definitely greener. I was able to move 90% of the assets. You’re just getting ripped off, that’s all. Good luck to you.
Anonymous,
I’m not a headhunter/recruiter, just an advisor that got sick of UBS mentality and left–and couldn’t be happier now.
Better technology, no cross selling, management that appreciates what I do every day.
At UBS I always heard how the “business” was a three legged stool—the advisor, the client and the firm.
Where I’m at now its the client and the advisor–period. The belief is that if you take care of the client and advisor, the firm will naturally do well–as evidenced by our stock performance nearly tripling in last 10 years.
UBS stock on the other hand has gone from 19 to 10.
Watching the ever changing decisions of the management at the wirehouses is like watching a slow motion car crash. And its unfortunate… because the crash was avoidable.
The wire houses of 2020 are not the same as those of old. I didn’t grow up in the wire house space but moved into it as the old partnerships merged into larger entities. The old firms were defined by the relationships between the client and the advisor. With slogans like “Merrill Lynch is Bullish on America” and ” when Paine Webber talks everybody listens” the firms were relatable. There was a culture and people were proud to be part of something bigger. Recently UBS talked about YOU and US but it hasn’t been about the advisor or the client for years. And certainly few employees listen when management speaks. No one begrudges a company for making money but the continuous drive to add banking products, use firm ROBO models and cross sell have left the advisors out of the picture. Asset gathering is now the model versus the old client / advisor relationship. Legal and compliance are a ridiculous constant and local management ( yes local management), CSAs and advisors dread the ‘gotcha’ moment that is around the corner of the next branch audit. The majority of wirehouse advisors feel disenfranchised and do not trust management as far as they can throw them. This is a long way from when we helped each other, celebrated life’s victories and had Christmas Parties. Sure there are a few people who care but its a long distance between Brian Hull’s vision and the local branch….and there are layers upon layers of self serving middle managers and compliance wonks that stand in-between. And of course there is Switzerland too.
After more than 30 years as an advisor I do have to laugh though. Chandler’s tune change regarding the fake team payouts showed how out of touch the senior folks are today…and im not talking about this COVID change but the one a few months ago that temporarily deferred the grid change for teams. Under fire from individuals who merged with others to get a higher grid payout without ever truly embracing the spirit of the teaming agreement ( 99-1 is not a team payout) UBS pushed back the start date of the new grid…but only for these ( fake) teams. The sole practitioner didn’t get the reprieve and today is asked to do more with less, deal with crummy technology ( who wants to bet on the promised tech refresh?) and get paid less…..(and recently pay extra support toward their sales assistants…even though UBS clearly states the CSAs work for the firm and not the advisor….)
Needless to say I am happy I am out of there. As someone earlier wrote there are different models for different people and some will be successful in the wirehouse version. And many will continue to leave the model seeking a different way of life. Regional firm? RIA? Anything but UBS. And sadly by the time management recognizes the true level of discontent there will be little left of the once proud firm. Like I said…a slow motion car crash…..