Major events at UBS- Sale in the works now?
73 RepliesJump to last post
Still nobody has made a case for me to uproot my business and go indy. I'm not afraid in any way of being out from under their wing. Really, that wing is useless to me. It's really about not wanting my clients to have to go through another move. Been there, and unfortunately done that. Besides, with all the momentum my business has at UBS, why rock the boat? Business is great, and "if it ain't broke, don't fix it." Face it people, I'm happy where I am! What you folks don't understand is that I'm not feeling any pain due to UBS right now. If there's no pain, why go through the pain of going indy to get back to no pain again. Doesn't make a lot of sense to me. I have a beautiful office in a great part of town in arguably the best place to live in the country, where I work with several hundred of the best clients a knucklehead like me could ever ask for. I have a beautiful wife who loves me (3 out of every 4 weeks) and healthy, beautiful children who tolerate me. I play golf and work out twice a week, canoe once a week, I watch movies whenever I want on my big screen plasma, I drive the car of my dreams, I'm healthy, and this was all provided by winning the lottery of being born in America. I guess upper management stooges at UBS don't really have much of an effect on all that, try as they might. When and if they do, I then and only then will even come close to making a change of firms. Until then, it's onward and upward for this guy....at UBS! LA
When you jump the wall and get outside, you won’t care if they “get their act together” or repair their reputation. What value do you get from your firm? Don’t you deserve to have a better experience from your leaders? When all this passes…hey, you’re right - they won’t learn and nothing will change.
Like all firms UBS has good and bad. Marketing approval is a black hole for example. They are good at creating polished turn key products to deliver to clients. Pace Multi and FGA are great examples- but the elimination of PACE Multi models was a mistake. Bond Desk has its limitations, but can be worked around if you know what you are doing. There is a haircut on the bond desk before you see any bond offerings. Of all the firms, they did the best job of handling ARC issues…just about everyone has been made whole and because of the freeze, many clients were protected from themselves and actually had a positive return on the money that was tied up. For clients that absolutely needed access to funds (estate settlement etc), the client could borrow funds at no net cost to them. Their recomended equity portfolios have had good performance (which surprised me when I was there).
Middle and upper management tiers are a joke. No one wants to refer business to the HNW centers because after the initial referral fee is paid, the client is lost. Doing annuity business is more difficult due to compliance and admin issues. UBS Glolbal Asset Mgmt is mediocre at best, but their story is compelling and can be used to sell other products. Like all firms, some good and some bad. Though their headline risk is different than their competition due to IRS issues. They need to decide how they want to position WMUSA or sell it.Lew,
Why does UBS have to pay the highest recruiting bonuses on the street to entice brokers to join them?That's a good question. Every wirehouse is currently paying high bonuses right now. Maybe UBS pays the most, but I don't know. Merrill is certainly up there.
Here's what I think. Successful, self-motivated FA's are naturally entrepreneurs at heart. We all enjoy "owning" our own business. To entice FA's to stay within the wirehouse circle and not go indy, maybe that's what it takes. UBS probably feels that if they are going to compete with the other big firms, they must compete to win, hence the highest recruiting bonuses. But who the hell knows why they all do it? Maybe it's this... Changing firms is an absolute pain in the neck. If we're going to go through the misery, we must be compensated. If we leave and go indy, we are compensated with higher payout and autonomy. If we go with another wire, they have to write a check. One way or another, if an FA changes firms, he or she will only do it if it financially will benefit him or her as well as their clients. But it's crazy, if you ask me. The payback period is so long-- I'd love to see how many actually pay off. LALook at the question another way- which big wirehouse has seen the most FA departures in terms of raw numbers and AUM ? I think it is UBS, if not then they are a close second. They may be paying high upfront bonuses if only to keep their top producing FA and AUM numbers from looking worse than they do. They need to recruit if only to stay even.
UBS’s recruiting deal is currently below the levels of MER/BAC (highest of the largest Firms) as well as MS/SB.
“But it’s crazy, if you ask me. The payback period is so long-- I’d love to see how many actually pay off.”
I would put the payback at 3-5 years for big producers, shorter for smaller producers (because their payout is lower and the recruiting bonus is smaller). Look at it this way, 500K producer, average 50% payout at new firm (including bonuses, profit sharing, etc.). Get 150% of T-12, that's 750K. 50% of 500K is 250K per year. 250K x 3 = 750K. Also, depending on how much is upfront, it may be a break-even each year for those 3 years, with a new % coming due each year (the balance sits as a liability). They are basically just leveraging new business. And enough guys will stay beyond the retention period to make it wildly profitable. And with most guys being brought into an existing office, there is very little in added expense/overhead to bring them on.A little prediction revision here on the thread as intel seems to be more consistent around these issues:
1) On potential sale; HSBC or Credit Suisse and in 2009. HSBC would be a retention disaster for many reasons… if you care… I’ll answer with an in depth response as to why I say that. Credit Suisse… lots of upside imho.
2) On FA RIF (reduction in force)… instead of terminations like April, UBS will just adjust grid and starve LOS 5+ if < $350k starting in Oct. Why? Saves them lots of money. Much cheaper than terminating people and there’ll be less $ given away in voided/forgiven transitional packages. They might as well term folks because it’ll have the same impact on headcount and aum in the end. Few can drive production fast enough to dig out. If the market softens in Q3 into Q4 it’ll obviously accelerate this. There will also be some hits to long timers < $500k or close to that. For example…Mr. FA with LOS ‘forever’ dragging in the $300s or $400s.
3) Sales Managers… Oct. - I think this is well known already… massive ‘complexing’ will occur in small branches. A bunch of guys forced into production. Some smart ones with a good following and some willing and loyal FAs will lift out here and there.
Credit Suisse? After all that has happened you think another SWISS bank would try to gamble on the US market? Their model does not work here.
Also, if that happened I bet you would see massive departures as most UBS fa's don't want to be owned by a swiss bank now.We haven’t heard form secretknowledge for a long time. Secret, you out there?
LA
1. Robert McCann. He states in the documents that he filed in his suite against Banc Of America that his non compete is keeping him from taking his dream job. I do not think that his dream job is to run UBS unless:
A. It involves taking the old PaineWebber private. UBS gets cash plus stake in company and he has a chance to make a fortune on the IPO.
B. UBS and Wells Fargo Securites merge and he runs the merged company.
2. I do not think that Credit Suisee, HSBC or JP MOogan are buyers.
3. UBS U.S. has a scale issue. They either need to shrink the firm considerabbly or merge to get scale. I do not think that shrinking the firm to the size needed is a viable option.
4. On the October RIF. I think that it is mostly CSA’s and operations. The RIF in ops will be do to the complexing of the operations departments.
5. On lift outs of small branches because of the producing branch manager issue,I think this could happen, I believe they will be smallerbranches were the salary of the manager is very small and they can not afford the time to build a book or just do not want to. In that situation, the only thing they have to sell are the brokers in the office.
6. On UBS as a place to work. From what I here from the recruits from last year, some things are better and some are worse. Personally, I think that it is harder to get things done than it was in the past. At the same time, I am working on several projects that require a lot of support and I am getting it.
A lot depends on your local situation. We happen to have a very good office that has been together for a long time. However, some of the decisions made in the last reorg have weekend our office.
7, I think most FA’s are just waiting for the next sjhoe to drop. Replacement of Marten, Jamie or a sale being the most likley. Like FA’s everywhere they just want a stable environment with as little distractions as possible to work in.
8, The key for all of us no matter were we work is to call our clients, plan with them analyze portfolios and give advice on how they should reposition themselves.
9. Personally, I believe the overall environment for our businesses is better then it has been in a while. I think that both the clients and advisors have come out of there shell and are starting to figure out how to be iinvested in the new normal.
10. On channel preferences, I believe that it is whatever works fgor your particular situation. I know advisors in most of the different channels and they all have there issues. For example, all of my clients are out of ARC’s and Auction Rates. Most independent advisors are stuck. I am sure ther are things that exist in the independent channels that are both better and worse that what is at the wirehouses.
11. I saw an article this week that CitiMorg is going to complexes also. Merrill is already there.
12. I wonder what the labor day weekend will bring for advisors leaving all of the firms. It seems that movement over the past six weeks or so has declined.
Good luck everyone.
I can't find fault with any of your assertions, but I am especially hopeful for your point about McCann and taking PW private. This IMHO is the best case scenario for those that are like myself and like the product we have to offer our clients at UBS and who do not relish the thought of ever having to change firms again. Also, in addition to McCann making a fortune, we as FA's will have an opportunity to make a (smaller) fortune as well with said IPO. We can also rebuild this firm with a new culture blended from many, since many currently at UBS did not start our careers here. I'm not drinking the Kool-Aid, but if our firm plays this right, we could be looking at the dawning of a great "new" company. Well, a guy can dream, right? LA
1. Robert McCann. He states in the documents that he filed in his suite against Banc Of America that his non compete is keeping him from taking his dream job. I do not think that his dream job is to run UBS unless:
A. It involves taking the old PaineWebber private. UBS gets cash plus stake in company and he has a chance to make a fortune on the IPO.
Lew… with all do respect(I can say this because I said “with all do respect” said Ricky Bobby)… You have no right whatsoever talking this way if you are not an original PaineWebber guy. I’m sorry Lew, you are right that I am bitter but the Swiss Nat…have so much fuked this firm up it is not repairable.
Why do I not have the right to be optimistic about our firm's future. Being optimistic is being American, brother! Sure, the Swiss management certainly has done their best to screw us up. And you are correct that I am not an original PW guy, but I play one on TV. No, really, I know enough original PW people, and it sure sounded like things were great at one time. But to say we're not repairable, isn't that a bit pessimistic? That would mean that no wirehouse is repairable because we certainly aren't any worse than the others, IMHO. And the firm isn't so fuked up that I can't give my clients a high level of service and earn a great living. Yes, we have our challenges, but we have no choice but to fix our firm. What's the alternative? And it's okay to be nostalgic about the past and what the firm once was, but it's a new day and a new reality. We as humans are at the top of the food chain due to our adaptability. You have to let go of the past and focus on what you're going to do to affect your future! If that's at UBS, then adapt your model to fit the parameters they give us to work with. If not, then you must make a change. It'll kill you otherwise. LALew… with all do respect(I can say this because I said “with all do respect” said Ricky Bobby)… You have no right whatsoever talking this way if you are not an original PaineWebber guy. I’m sorry Lew, you are right that I am bitter but the Swiss Nat…have so much fuked this firm up it is not repairable.
[quote=Lew Ashby] If that’s at UBS, then adapt your model to fit the parameters they give us to work with. If not, then you must make a change. It’ll kill you otherwise.
[/quote]
Drink the wirehouse koolaid or begone! Resistance is futile.
Time for an update on UBS…
I KNOW of at least 2 FAs who have been told directly by BMs that they need to get their plan B in place asap. This since Monday this week. LOS 7 $205k gross and another at $180 ish in production with 4 LOS.
Payout grid adjustment DOWNWARD for bottom quintiles is weeks away- I think it’s a foregone conclusion. It’s more of the ‘starve em out’ approach.
I maintain my prediction that a SALE or other major change concerning the entire US wealth management group will happen before Halloween. Rumor mill is heating up. Rumors where the particulars are concerned are usually bogus, but they always precede a legitimate event.
UBS advisors can verify this. Recruiting calls from firms directly and external recruiters seem so spike dramatically just prior to large events. I’m hearing that the volume is dramatically up this month. True?
The major event is McCann coming in. We just redid the grid recently, I doubt that we are going to have another downward movement on the low end.
Why would McCann consider a firm with 7000 advisors, with only 4-5000 that do any real numbers, a “dream Job”? If he and some rainmakers could take it private and restore some lost employee and stakeholder wealth, maybe…maybe. Other than that, why would he want to head an organization that is loaded with problems. He alone can’t solve them all. A wholesale change of leadership is needed and needed quickly. Marten, Jamie, nat’ sales, compliance, legal…they all need re-tooled with fresh ideas and most of all common sense. However, please keep in mind that McCann has NEVER been an advisor at any point in his career. Most of us know what that means. A grossly overpaid cost cutter/administrator with no loyalty from the advisor ranks, and has no clue what really happens on the ground level.
It would seem to me that 18M advisors at MSSB, especially with Gorman at the helm, and McCann's relationship with him would be a better deal, even if MSSB is a terrible firm. This fits the Dream job definition infinitely better than 7,000 going to 6,000 soon. Despite numerous tries, UBS has rec'd no acceptable offers to sell WMUS. Good franchise, but the most inept, arrogant, and detached management in the industry, in the states and in Switzerland. If he gets it and takes it, I wish him well. Anyone is better than the current braintrust. BTW, September will see level 3 and lower NFA's gone firm wide. The snapshots were taken in July. If you have NFA's on a team in your office, I would advise you to coach them appropriately. If they don't start carrying their weight, they will be gone soon as well, regardless of team status. Also, CSA RIF in Mid October, rather than end September to compensate for the coming operations/ admin consolidation in the complexes. Can't speak to level 5 underperformers yet, but a plan B is necessary. It may be becessary for many more over the coming months.