Advisor Intelligence

UBS Upped Advisor Compensation in 2012

Under the leadership of former Merrill Lynch executive Robert McCann, UBS' wealth management division saw record profits last year and subsequently spent more on advisor compensation.

UBS paid its financial advisors a total of $2.9 billion, up 12 percent from 2011, according to UBS’ annual compensation report released Thursday.

Advisors operating under the USB Wealth Management Americas umbrella are paid on a grid-based compensation plan, derived from commissions, as well as supplemental compensation based on financial advisors’ productivity, firm tenure, assets and other variables.

UBS also offers advisors the chance to qualify for year-end awards, most of which are deferred over either a six- or 10-year period, the firm says.

The 2012 overall compensation payout increase is due, in part, to the record-breaking $873 million in pre-tax profits the division generated in 2012, UBS said, a 40 percent increase from 2011. The brokerage division's revenues increased nine percent over 2011, according to the company, as it brought in $49 billion of net new money, $11.5 billion more than the year before.

The compensation increases further supported recent comments made by UBS Chief Executive Sergio Ermotti that the company valued its wealth management division and had no plans to sell.

"It has always been my view that it would be a terrible strategic mistake for UBS not to have a significant presence in what is arguably the most important financial centre and wealth management market globally," Ermotti said recently according to a Reuters report.

The U.S. wealth management segment was losing both money and advisors before Robert McCann stepped into the role of the division’s chief executive in 2009.

McCann earned the second-highest compensation package at the company with $8.97 million. That was down 6.8 percent from his 2011 compensation when he was the highest paid executive. 

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