This month, the contingent of PaineWebber brokers who remained at UBS following the 2000 merger will receive the final installment of their post-merger retention bonuses — a chunk of UBS stock.

The expiration of this program, coupled with some general advisor discontent at the firm, could well touch off a mini-exodus of brokers come the first of the year, advisors and recruiters say.

UBS is “one of the better firms but they're going to have an outflow of good people, guys with average lengths of service of 10, 12, 15 years,” says one recruiter who did not want to be identified.

In a statement, UBS says that any assumption that the final round of retention bonuses holds more significance than the previous three is an erroneous one.

“The fourth payment for eligible FAs is a very small fraction of their overall production,” an official says. “It is one of a number of ongoing retention awards and by no means the most significant.”

But one recruiter says the fact that bonuses are closing out is significant enough, noting he's “known unhappy reps to stay three or four months for less than 10 grand.”

At the time of the Paine Webber merger, reps were given allotments of UBS stock based on production and/or length of service, and on a case-by-case basis.

“Reps with $1 million-plus in production could have received as much as $500,000 in UBS stock to vest over the four years,” said Rick Peterson, a Houston-based recruiter, who notes that the stock price was locked in for reps at the time. “Since 2000, the stock has absolutely skyrocketed,” he says.

At the beginning of 2000 a share of UBS stock traded for about $40. It's now 78 percent higher, $71.

“The entire cast of PaineWebber reps are having a final check dangled in front of them, and many of them are disappointed with the firm,” says a recruiter.

UBS has remained largely outside of the regulatory spotlight, but that positive note doesn't resonate with reps. Brokers at the firm are less happy than most, and that has been true for a few years — the firm received the lowest rankings among reps surveyed in the 2003 Registered Rep. broker report cards.

One New York-based UBS broker, who said he intends to stay, acknowledged the coming situation is tempting. “I like it here, but if someone holds that kind of a carrot in front of you, you're going to look long and hard at your options,” he says.

Another said the reps' discontent is related to UBS' continued emphasis on high-net-worth clients, and the brokers that serve them. “It's a great place to work if you're a big producer with a lot of high-net-worth clients. Otherwise, it's not so great,” he said.

Another rep said the salesforce wasn't the only victim of the new culture. “I left the banking side because of what they're doing now,” he says. “They're raising fees, squeezing every penny out of clients and treating them more like numbers — it's just not client-friendly like it was, and a lot of guys are PO'd about that.”

One UBS rep confirmed the push to sell UBS product, saying it was being pushed on to his plate more than ever before. “Increasingly, they're telling me what to do and what to sell,” he said.

“Nothing is going to happen right away,” a recruiter says. “But I'm convinced — starting in January they'll leave in droves.”