UBS comp

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pewter's picture
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Joined: 2009-09-13

Love to see more detailed info be presented in Reg Rep article, than is distributed at the firm?? They are sooo f'n clueless! 

burtonfinancial1's picture
Joined: 2008-09-30

What is wrong with this picture?  I don't know the facts and would like to know more facts. IF the article is correct in stating that UBS would retain brokers at $500k+ with  65% of their T-12 on a 7 year note.... would that not be insane? It'd make no sense for anyone. I can't believe the numbers as stated in the article. If they should be true, goodbye to at least a sizeable chunk of UBS.

Shania Twain's picture
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Joined: 2009-09-23

burtonfinancial1 wrote:
What is wrong with this picture?  I don't know the facts and would like to know more facts. IF the article is correct in stating that UBS would retain brokers at $500k+ with  65% of their T-12 on a 7 year note.... would that not be insane? It'd make no sense for anyone. I can't believe the numbers as stated in the article. If they should be true, goodbye to at least a sizeable chunk of UBS.

?

Thats sort of what all the retention deals have been like mer ssb ws etc

ShotInTheDark's picture
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Joined: 2008-03-25

65% is if you've been at UBS for 20+ years (NOT NYSE LOS) AND you are doing $1MM or more.
 
If someone is doing 500k with 10yrs at UBS, you'll get 10% ($50k) upfront Dec 10' and another 10% ($50k) Dec 17' if your business is flat over that time.  If your business grows by 10% per annum your second check will be 20-30% instead of 10%.
 

pewter's picture
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Joined: 2009-09-13

I am not an alarmist...though I sense this deal will work contrary to it's intent. To little to late in my mind, much stronger options elsewhere. After apologing for the upteenth time for our firms, and after carrying the weight over the last two years, the retail guy wants paid now!! Green is green! biggest check wins!

borei's picture
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Joined: 2009-07-24

It is a 5 year then another 7 year forgivable loan structure. Most won't even qualify. Smoke meet mirror.

The McCann Can-Can't kicks up sand.

Shania Twain's picture
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Joined: 2009-09-23

ShotInTheDark wrote: 65% is if you've been at UBS for 20+ years (NOT NYSE LOS) AND you are doing $1MM or more.
 
If someone is doing 500k with 10yrs at UBS, you'll get 10% ($50k) upfront Dec 10' and another 10% ($50k) Dec 17' if your business is flat over that time.  If your business grows by 10% per annum your second check will be 20-30% instead of 10%.
 

20 yrs wtf

Shania Twain's picture
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Joined: 2009-09-23

UBS’ Deal: Too Little, Too Late?
By Matt Ackermann
December 11, 2009
¦
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UBS AG's Wealth Management Americas new incentive package to keep financial advisors may be too little too late, according to several headhunters.

Industry observers expect the Swiss bank’s U.S. brokerage unit to face an uphill battle as it tries to keep its financial advisors, especially when other firms are offering significantly larger retention packages.

Changes to UBS' compensation packages had been highly anticipated by advisors as they were expected to shape expectations industry wide on the size of the packages offered, according to a group of headhunters who recently participated in a Recruiters Roundtable sponsored by On Wall Street. “These UBS advisors have been though the war and they expected to be rewarded for their loyalty,” Mindy Diamond, a recruiter based in Chester, N.J., said. “They stuck with a firm that has been radioactive for a couple years. They needed to be rewarded for that loyalty and frankly, they may be offended by this.”

The retention program, called Growth Plus, will reward brokers who have been with the firm for more than five years and generate at least $500,000 in annual production starting next year, according to recruiters.

The recruiters said that advisors will be paid on a sliding scale, up to 65% of their production next year. Robert McCann, chief executive of UBS’ wealth management business, announced the plan at a meeting with the firm's top 300 advisors. Diamond said approximately 20% of UBS’ advisors would qualify for the payout. (Fore more on McCann's strategy for UBS read: "McCann Set Profit Targets for UBS Wealth Management")

“I think it is a noble gesture because they were in a position where they had to do something,” Diamond said. “McCann is boldly saying that retention is the most important thing and retention means bonuses, but it may be too little too late.”

A UBS spokesman said that its “Growth Plus” plan is an enhancement to its existing compensation plan for advisors. That plan is designed to allow advisors to “participate and share in the future of our firm in two ways. Participation is based on prospective 12-month— not trailing 12-month—production and secondly, Growth Plus recognizes long-term dedication to the firm. This new paradigm for compensation is aligned with our renewal efforts and our vision of becoming the best wealth management firm in the Americas.”

Paul Werlin, the president of Human Capital Resources, a St. Petersburg, Fla.-based executive search firm, said he expects 2010 will be “the toughest recruiting year in the past 20” as many wirehouses and brokerage firms “chase fewer and fewer top producers.”

He also said that “there are three to four major players who have an unlimited appetite for strong producers and they are emptying the bank to pay for them. At least six firms are looking for more than triple digits in new brokers and attracting them will require really large incentive packages.”

Werlin said that incentive packages at Morgan Stanley Smith Barney, Bank of America Merrill Lynch, and Wells Fargo are all superior to the package that UBS is offering, with Merrill offering up to 330% of their trailing 12-month production as a bonus.

“So many major players are throwing major numbers around,” Werlin said. “Merrill and Morgan Stanley have the capital to reach their targets, but everyone else will be scrambling. No one is sure about the economics, but everyone is certain that the talent pool is shrinking. Brokers can write their own ticket right now. UBS is playing with fire.”

New York-based recruiter Steve Rosen said that if these numbers are correct it would leave fewer companies—namely Merrill and Morgan Stanley Smith Barney—to vie for the biggest and best advisors.

“Merrill, Wells and Morgan Stanley have had retention packages and UBS did not,” Rosen said. “This is something that they are calling a ‘growth package,’ because if it was a retention package brokers would be insulted by it. … This is not going to keep brokers in their seat because it just isn’t competitive with the marketplace with the deals that are out there.”
Rosen said that this may just be “the first trick that is up McCann’s sleeve.”

“They clearly had to do something,” Rosen said. UBS couldn’t sit still “while the other three major wirehouses were offering their brokers 125% retention packages. This is an attempt to keep their advisors, but I just hope there is more to it.”

Diamond said that the package may be enough to keep some advisors “who are fearful of making a move.”

Rick Peterson an executive search consultant with Rick Peterson & Associates in Houston, said that details surrounding UBS’ plan remain unclear. But he expects the bonus to be higher than 65%. “The program certainly rewards guys that have been there forever, but it hasn’t been completely disclosed yet,” he said. “Anyone that says that they completely understand it or the ramifications of it is lying to you.”

Winston Smith's picture
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Joined: 2009-01-13

At Merrill they basically took the worst months for most people.  I know some guys that had done a million for 20+ years but based on the months they used were in the 700k pool.  Bob McCann is one smart puppy.  Oh, and he was never a broker...but he has one hell of a pr firm...I even like him. :)

secretknowledge's picture
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Joined: 2009-03-28

My veiw is this. If you were looking to leave this deal was never going to be enough to make you stay. However, if you have decided to stay it is better then what you had before. I do not believe that it will effect broker movement at all.

ABOM's picture
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Joined: 2008-11-01

yes it is too little too late, most long los FA's have already left. only about 1700 FA's qualify for the not a retention - retention deal which is pretty weak (most will get around 20-30% of forward 12 next yr) compared to a mssb deal of 250% right now.That being said UBS is the only wire that was not bought, didnt merge, didnt change name out there. not saying a retention deal is not warranted but it would have been good to see one a year ago not now.you want to see a good retention deal raise payout by 10% for FA's over 500k defer it in a def comp account that fas can have a choice of high quality mutual funds have it pay 1/4 every year at year end. instead of all these lump sum 7yr los deals.the problem with wirehouses is they all think alike. one raises account fees they all do. one makes a minimum household size 100k they all do. Why not think different? dont any of these guys read from good to great.....

TT's picture
TT
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Joined: 2009-09-04

I talked with a lot of folks yesterday who will be getting a check next December.  They all said they were very happy with the deal.
 
Quoting a recruiter, who gets paid to stir up &^%$ so that people move, is ridiculous.  What is she going to say, "It is a great deal and the FAs are really happy"?  She gets paid when people move, that's it.  Oh, and she recruits for MS.  Talk about biased.
 
 

pewter's picture
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Joined: 2009-09-13

This is a chrystal clear example of how senior management is out of touch with the mindset of the ground troops. Listen. All the wires hack, so if you are going to stay in that world....go get paid! 65% ain't gonna cut it....and oh yea, nobody wants to wait a year to get it!!! In this day and age, UBS could be a different firm by then, and the deal is cancelled.  Deferred comp is a joke, FA's have been loyal, and kept clients happy while the benifactors  (management, IB, Traders, product specialists...get bonused to the bejeesus) and you want to wait and see if we produce over the NEXT 12 months!?!? That is an insult!!

IndianaJones's picture
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Joined: 2009-04-22

ABOM wrote:yes it is too little too late, most long los FA's have already left. only about 1700 FA's qualify for the not a retention - retention deal which is pretty weak (most will get around 20-30% of forward 12 next yr) compared to a mssb deal of 250% right now.That being said UBS is the only wire that was not bought, didnt merge, didnt change name out there. not saying a retention deal is not warranted but it would have been good to see one a year ago not now.you want to see a good retention deal raise payout by 10% for FA's over 500k defer it in a def comp account that fas can have a choice of high quality mutual funds have it pay 1/4 every year at year end. instead of all these lump sum 7yr los deals.the problem with wirehouses is they all think alike. one raises account fees they all do. one makes a minimum household size 100k they all do. Why not think different? dont any of these guys read from good to great.....

You couldn't have said it any better. I'm concerned that McCann will be just like everyone else. We'll see.

borei's picture
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Joined: 2009-07-24

Worse it is an EFL with a 5+7 year tail. It is no where near good enough to keep the tier 2 folks. The tier 3 and 4 are mostly excluded so this will just help them decide to vamoose.

secretknowledge's picture
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Joined: 2009-03-28

the deal seems to be focused on under 50 FA's who have 600,000 to 750,000 in production. In my office it has been seen as too little ( below expectations). It is also seen as not very good for older producers and thos over a $1,000,000 in production ( next bracket is at $2,000,000.

It will have horrible effect if UBS announces a deal equal to what rest of street is now offerring.

The best thing McCann can do to hold brokers is make it easier to work at UBS.

The next 2-3 months will be the key. FA's will spend the rest of this week understanding how it affects them. Smart recruiters will spend the next 3-6 months offerring to do side by side financial. comparisons. they will show the premium as the chaos bonus for moving.

Oops. I assumed there were smart recruiters out there. Im sorry.

borei's picture
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Joined: 2009-07-24

ABOM wrote: That being said UBS is the only wire that was not bought, ...

Well, not exactly. How many dilutions from Sovereign Funds and other capital injections have happened? How many times has a new board put in a new CEO? From Wuffli to now it is a very different command and control structure.

amfUBS's picture
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Joined: 2009-11-04

UBS/USA hasn't been bought because they are the $720k condo in South Florida, snatched  up by idiots in the heat of the market. Its on the market for $620k, while there's an auction going on two floors down: minimum bid is $319k.  I thank the Swiss for having bought PW at the last top and overpaying for it. They are too embarassed to let it go at a fraction of what they're in for. Too bad they can't walk away but I'm sure they've thought about it. Look for them  to do a GE/Kidder deal in the future. They'll take stock from a buyer so they can save face, keeping their toe in the water and hoping for upside. McCann's the makeup artist: He needs a couple years to pretty up the pig. 

pewter's picture
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Joined: 2009-09-13

How arrogant for gruebl to think he has years to plan for USA WM. Months is the time frame!!! No body is waiting for UBS to come around! Are you F'n kidding me! Like no other firm is doing anything in the mean time????? 

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