UBS Layoffs, Other firms too?

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staffwriter2's picture
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Are the UBS layoffs the first real major cut of advisors you've seen recently?We're wondering if advisor layoffs are going on at other firms (ML, SB, WF)  too, but just more imperceptibly? If so, are these cuts also based on production?Are national firms drawing a line in the sand in terms of production (with 300 T12 and less not making it?) Thoughts?Thanks.

B24's picture
B24
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Most big firms are forcing "voluntary" layoffs through changes to their grids.  At many firms, producing under 300K is now impossible to live on.

Bank of Amerrill's picture
Joined: 2009-01-27

Merrill got rid of most of the trainees but haven't laid off any producing advisors to my knowledge. Most have left because their payout was cut severely because of the penalty box.

staffwriter2's picture
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Thanks!  What is the payout, for a 50 fees/50 commissions book, for a 300K
producer...any specific examples of how this has changed (the penalty boxes) making it more difficult for these advisors to make ends meet?

What are some options for those producers? Where are they going?

Bank of Amerrill's picture
Joined: 2009-01-27

Most advisors in my office that fell into the penalty box have left and gone to independet firms where the payouts are almost tripple of what the penalty box grid is.

staffwriter2's picture
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How much would a 300k producer at say ML or SB bring home today than say a year or two ago?

Squash1's picture
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My guess is half, at the least.

Bank of Amerrill's picture
Joined: 2009-01-27

If they were heavily annuitized then half sounds about right.

burtonfinancial1's picture
Joined: 2008-09-30

I'd be extremely surprised if there's not a similar 'cut' in tiers 4 and 5 coming at Smith Barney and Morgan Stanley once the deal is done end of May. Will probably happen after Q2 ends in June. It would make a lot of sense for them to trim off the bottom <$300k producers once they have 1/3rd of the retail wirehouse advisors under one roof so to speak. They've already NOT retained these FAs and more.   If they don't cut, probable performance plans, penalty box shift, etc to push advisors out the door. 

Bud  Fox's picture
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Word is that WFC is going to be saying ADIOS to some PCG advisors on the WB Securities side.  My manager said the cutoff is either going to be at 150k or 200k for LOS > 5 years.  She was not sure if that is on the T12 or the fiscal year end but it is clearly coming very soon to a branch near you.  Really, can you blame them?  These advisors will never be any larger than what they are now at those #'s & LOS. They are only adding cost to the office and to the wholesalers by eating their lunches.  Good luck to all of you as YOU know who you are.

Omar's picture
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Joined: 2009-03-19

After B of A cut it's training program, we were told more than once that there will be no further layoffs for FAs. This was said on conference calls earlier this year. Also, some of the payouts that were dropped for lower end producers have been raised back up recently. I don't think they would have done that if they planned to can these guys.

3rd ID's picture
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Joined: 2008-11-30

Word is that WFC is going to be saying ADIOS to some PCG advisors on
the WB Securities side.  My manager said the cutoff is either going to
be at 150k or 200k for LOS > 5 years.  She was not sure if that is
on the T12 or the fiscal year end but it is clearly coming very soon to
a branch near you. *************************************************************I heard ISG will be showing the door to 250k and less. I also heard that they are preparing to terminate the FAIT program very soon. A lot of branch consolidation going on as they bring in new recruits from the wires and elsewhere. Very good producers are even losing branches to recruits. There really is no job security any longer even if you are producing solid #'s.

FABroker1999's picture
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I know someone with ML that went ot the penalty box. He threatened an atty and they backed off. Another FA from another office told me independently that they discontinued the penalty box program at his office.
 
I think the numbers were: Less than 300k = 20% payout vs. 40%... does that sound right?

Delmarva's picture
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FABroker1999 wrote:I know someone with ML that went ot the penalty box. He threatened an atty and they backed off. Another FA from another office told me independently that they discontinued the penalty box program at his office.
 
I think the numbers were: Less than 300k = 20% payout vs. 40%... does that sound right?
 
Are you hearing the BOM has discretion over who is in the penalty box and who is not?
 
Thanks.

fritz's picture
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burtonfinancial1 wrote:I'd be extremely surprised if there's not a similar 'cut' in tiers 4 and 5 coming at Smith Barney and Morgan Stanley once the deal is done end of May. Will probably happen after Q2 ends in June. It would make a lot of sense for them to trim off the bottom <$300k producers once they have 1/3rd of the retail wirehouse advisors under one roof so to speak. They've already NOT retained these FAs and more.   If they don't cut, probable performance plans, penalty box shift, etc to push advisors out the door. 
 
Conf. Call monday with MS management and said no cuts this year for sure, probably next year too ( my guess is larger loss of brokers at SB first quarter is the reason).  But plan is to raise the penalty box or  cut payout levels to guys 300K or under, maybe little higher for LOS over 10+.  If they stay great, if not they don't attitude is the way they are looking at it.
All this garbage happening after the firms did a large part to blow up the industry is pathetic.  Try to explain to the wife wtf is going on and she just stares at me.

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She's probably in shock. My wife is a registered nurse and I notice she has been putting in more hours since I told her about the crap going on at Smith Barney.
 
 
fritz wrote:burtonfinancial1 wrote:I'd be extremely surprised if there's not a similar 'cut' in tiers 4 and 5 coming at Smith Barney and Morgan Stanley once the deal is done end of May. Will probably happen after Q2 ends in June. It would make a lot of sense for them to trim off the bottom <$300k producers once they have 1/3rd of the retail wirehouse advisors under one roof so to speak. They've already NOT retained these FAs and more.   If they don't cut, probable performance plans, penalty box shift, etc to push advisors out the door. 
 
Conf. Call monday with MS management and said no cuts this year for sure, probably next year too ( my guess is larger loss of brokers at SB first quarter is the reason).  But plan is to raise the penalty box or  cut payout levels to guys 300K or under, maybe little higher for LOS over 10+.  If they stay great, if not they don't attitude is the way they are looking at it.
All this garbage happening after the firms did a large part to blow up the industry is pathetic.  Try to explain to the wife wtf is going on and she just stares at me.

Conrad Dobler's picture
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fritz wrote: 
Conf. Call monday with MS management and said no cuts this year for sure, probably next year too ( my guess is larger loss of brokers at SB first quarter is the reason).  But plan is to raise the penalty box or  cut payout levels to guys 300K or under, maybe little higher for LOS over 10+. 
 
Did they say specifically they were raising the penalty box, or is that you guessing?

fritz's picture
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Conrad Dobler wrote:fritz wrote: 
Conf. Call monday with MS management and said no cuts this year for sure, probably next year too ( my guess is larger loss of brokers at SB first quarter is the reason).  But plan is to raise the penalty box or  cut payout levels to guys 300K or under, maybe little higher for LOS over 10+. 
 
Did they say specifically they were raising the penalty box, or is that you guessing?
 
Managers said raise in penalty box coming, hard to say if it is a done deal or his interpretation.  Was confident though about no cuts.  Who knows, maybe they lied to him, but think as of April 2009 these are their plans. 
 
 4 years ago MS cut guys at <225K, then 6 months later they were hiring guys at 200K and giving them 75% upfront, after seeing that I got to wonder if anyone has a clue what their doing in this business.

nestegg's picture
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3rd ID wrote:Word is that WFC is going to be saying ADIOS to some PCG advisors on
the WB Securities side.  My manager said the cutoff is either going to
be at 150k or 200k for LOS > 5 years.  She was not sure if that is
on the T12 or the fiscal year end but it is clearly coming very soon to
a branch near you. *************************************************************I heard ISG will be showing the door to 250k and less. I also heard that they are preparing to terminate the FAIT program very soon. A lot of branch consolidation going on as they bring in new recruits from the wires and elsewhere. Very good producers are even losing branches to recruits. There really is no job security any longer even if you are producing solid #'s.
If this is true my old office is toast..only 2 or three guys left doing over 200k....well i guess that will make it alot easier to bring the straggling clients over...

fritz's picture
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nestegg wrote: 3rd ID wrote:Word is that WFC is going to be saying ADIOS to some PCG advisors on the WB Securities side.  My manager said the cutoff is either going to be at 150k or 200k for LOS > 5 years.  She was not sure if that is on the T12 or the fiscal year end but it is clearly coming very soon to a branch near you. *************************************************************I heard ISG will be showing the door to 250k and less. I also heard that they are preparing to terminate the FAIT program very soon. A lot of branch consolidation going on as they bring in new recruits from the wires and elsewhere. Very good producers are even losing branches to recruits. There really is no job security any longer even if you are producing solid #'s. If this is true my old office is toast..only 2 or three guys left doing over 200k....well i guess that will make it alot easier to bring the straggling clients over...
 
Know two guys under 200k who are doing with management encouragment the forefront/envision plans to get the "retention" from wells or whoever.  Not talking big money, 40-50K for each of them..hard to imagine they were told to do this, get their "easy money" and then they get canned right after getting it??? or before??? Does not make sense to me.  Can not see how 1000's of AGE guys got retention in the past 12 months and then now they are are canned for being under 200K or 150K (and loan is forgiven)??  Nothing surprises me, but guess knowing what is going on there it would.

Buckeye's picture
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Here's the thing about the envision program so I am told.   An FC gathers all the information about their  best accounts and inputs it into envision.  Now the firm has that information.
 
If someone leaves for any reason the firm has all the information on the clients and can pass it along to whomever is assigned the account.
 
An FC is only entitled to envision "bonus" money while they are employed starting sometime in 2010.  So if employment is terminated before then or anytime there after the payments stop -- if you took an upfront loan you own that back.
 
 
 

Bud  Fox's picture
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What AGE guys got retention within the last 12 months??? None on my planet.....    The "EASY MONEY" from the forefront plan will not even be paid to any qualifing FA's until 60 days after the next qualifying date, which is June 30th.  So you are looking at the first of September before being paid any forefront money on households that qualify as of June 30th.  Your guys will likely be gone before then and will have done the forefront/envision work for another FA in the office. How smart for the manager to be "encouraging" these short timers to get the work done for someone else....

fritz's picture
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Buckeye wrote:Here's the thing about the envision program so I am told.   An FC gathers all the information about their  best accounts and inputs it into envision.  Now the firm has that information.
 
If someone leaves for any reason the firm has all the information on the clients and can pass it along to whomever is assigned the account.
 
An FC is only entitled to envision "bonus" money while they are employed starting sometime in 2010.  So if employment is terminated before then or anytime there after the payments stop -- if you took an upfront loan you own that back.
 
 
 
 
if someone gets cut in this form they do not "owe" anything back.  But obviously their manager completely in the dark as they did not even want to bother with it and he kept hammering them that they are turning away "easy money." 

fritz's picture
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Bud Fox wrote:What AGE guys got retention within the last 12 months??? None on my planet.....    The "EASY MONEY" from the forefront plan will not even be paid to any qualifing FA's until 60 days after the next qualifying date, which is June 30th.  So you are looking at the first of September before being paid any forefront money on households that qualify as of June 30th.  Your guys will likely be gone before then and will have done the forefront/envision work for another FA in the office. How smart for the manager to be "encouraging" these short timers to get the work done for someone else....
 
How much would you bet that anyone is gone (other than trainees) by Sept 1st?  Both the two I know are on deals, whats your guess on that?

Buckeye's picture
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Not sure exactly what you meant by your post?   Are you saying that if someone's employment is terminated (quit, retire, die, are let go) they don't owe the money back?
 
If yes to any of the above you better read the rules.

Bud  Fox's picture
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fritz wrote:Bud Fox wrote:What AGE guys got retention within the last 12 months??? None on my planet.....    The "EASY MONEY" from the forefront plan will not even be paid to any qualifing FA's until 60 days after the next qualifying date, which is June 30th.  So you are looking at the first of September before being paid any forefront money on households that qualify as of June 30th.  Your guys will likely be gone before then and will have done the forefront/envision work for another FA in the office. How smart for the manager to be "encouraging" these short timers to get the work done for someone else....
 
How much would you bet that anyone is gone (other than trainees) by Sept 1st?  Both the two I know are on deals, whats your guess on that?
Everyone at AGE that signed the promissary note and received their retention bonus on Nov 15 2007 is on a "DEAL"....  I would bet there will be a lot of faces gone unvoluntarily by Sept 1st.  And per the contract language they signed they will have to pay back the unused portion (unamortized) of the retention that they received.  Even if terminated for not meeting the standards set by the firm. If this is not paid back, the firm will not release their license to another firm and they will take legal action.  I have already seen this scenario unfold in our office.

fritz's picture
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Buckeye wrote:Not sure exactly what you meant by your post?   Are you saying that if someone's employment is terminated (quit, retire, die, are let go) they don't owe the money back?
 
If yes to any of the above you better read the rules.
 
If you are let go YOU DO NOT owe the the money. 
Always has been the case and again in the UBS stuff today also was the written paperwork given to those let go. 

Bud  Fox's picture
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fritz wrote:Buckeye wrote:Not sure exactly what you meant by your post?   Are you saying that if someone's employment is terminated (quit, retire, die, are let go) they don't owe the money back?
 
If yes to any of the above you better read the rules.
 
If you are let go YOU DO NOT owe the the money. 
Always has been the case and again in the UBS stuff today also was the written paperwork given to those let go. 
With AGE, you can die or retire and don't have to pay the note back. That is the only way out.....

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Bud Fox wrote:fritz wrote:Buckeye wrote:Not sure exactly what you meant by your post?   Are you saying that if someone's employment is terminated (quit, retire, die, are let go) they don't owe the money back?
 
If yes to any of the above you better read the rules.
 
If you are let go YOU DO NOT owe the the money. 
Always has been the case and again in the UBS stuff today also was the written paperwork given to those let go. 
With AGE, you can die or retire and don't have to pay the note back. That is the only way out.....
 
Seen over 40 guys at MS get let go on deal over the last 12 years or so and ZERO have been asked to pay back who were let go, the ones who quit and went to another firm, in most cases settled for 30-40 cents on the dollar.  Today at UBS know of two guys let go, and it was clear your note was forgiven. Maybe AGE is different because dont know first hand, but the normal rule is you get let go for "production" you do not owe, if get fired for client issue or something like that its a different story.  I would bet you 5K it would be the case at WS/AGE also if there is a blanket cut.

Buckeye's picture
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I am referring to bonuses.  Read the rules.

fritz's picture
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Buckeye wrote:Bud Fox wrote:fritz wrote:Buckeye wrote:Not sure exactly what you meant by your post?   Are you saying that if someone's employment is terminated (quit, retire, die, are let go) they don't owe the money back?
 
If yes to any of the above you better read the rules.
 
If you are let go YOU DO NOT owe the the money. 
Always has been the case and again in the UBS stuff today also was the written paperwork given to those let go. 
With AGE, you can die or retire and don't have to pay the note back. That is the only way out.....
I am referring to the envision bonus.  Read the rules.
 
Ok, I was talking about the prom. note of the guys who are on deals. I know nothing about the envision bonus rules, do know the prom. note is not owed if you get let go for production.

Conrad Dobler's picture
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fritz wrote: 
 4 years ago MS cut guys at <225K, then 6 months later they were hiring guys at 200K and giving them 75% upfront, after seeing that I got to wonder if anyone has a clue what their doing in this business.
 
They let go LOS>11 @ <225K, I don't think they were hiring under $300k afterward. Now the minimum recruiting level is $500k.

IndianaJones's picture
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I heard ML get rid of the "penalty box" . Does anyone know if that is true?

staffwriter2's picture
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I just read that Wells may be laying off people at Evergreen Securities in Charlotte.Anyone heard about this...http://dealbreaker.com/2009/04/wells-fargo-keep-your-eyes-han.php

today1's picture
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no but i heard that they are cutting brokers at wachovia securities starting in may.

Gaddock's picture
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today1 wrote:no but i heard that they are cutting brokers at wachovia securities starting in may.
 
Was that just chatter or did you hear that from one that is reliable and in a position to actually know? I know for sure that they're laying off support staff. They've already began at some of the smaller satellite offices in my area.

fritz's picture
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today1 wrote:no but i heard that they are cutting brokers at wachovia securities starting in may.
 
We just hired a guy I know from a proir firm today..His t-12 was 240K year end 2008. His t-12 through March 09 was 210K..He got a surprisingly nice check up front and some backend.  I sure dont see any broker cuts coming in the near term. 

today1's picture
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gaddock, it wasnt just chatter. it was from someone high up on the inside that this info came from. very credible source.

3rd ID's picture
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Wach will be taking on the UBS refugees Im sure. specially in the ISG channel where they are packing them in from all over. Quality existing long term producers are losing branches and their referral sources to make way for the new guys. The word is they are cutting 250k and less as of June 30. I guess it wont apply to the refugees. They'll get a pass for a year or so.What did the guy you know get for coming? 75% up front?

fritz's picture
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3rd ID wrote:Wach will be taking on the UBS refugees Im sure. specially in the ISG channel where they are packing them in from all over. Quality existing long term producers are losing branches and their referral sources to make way for the new guys. The word is they are cutting 250k and less as of June 30. I guess it wont apply to the refugees. They'll get a pass for a year or so.What did the guy you know get for coming? 75% up front?
 
Yes, 50% Backend..Absolutely no chance they are canning PCG at 250 if they are giving deals at that level.  From what I have heard support staff and backoffice are getting cut, not brokers. 
 
 

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fritz wrote:today1 wrote:no but i heard that they are cutting brokers at wachovia securities starting in may.
 
We just hired a guy I know from a proir firm today..His t-12 was 240K year end 2008. His t-12 through March 09 was 210K..He got a surprisingly nice check up front and some backend.  I sure dont see any broker cuts coming in the near term.  Some of the LOS 5+ doing < then 150k will be going. many have already had the "talk" from the manager. Plus they have reached goal for trainees for the year. No more until Nov09 unless there are some LOS<>2-3 doing 150K. Then they do a quick trainee program on them.

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