UBS to Sell Small Branches?
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[quote=iceco1d]Can someone please help me get my brain around this?
WTF is it with all of these firms talking about putting FA's in the "penalty box" and 'not retaining lower producing FAs" and "blood bath layoffs of FAs" --- are these firms driven by bean counter morons? I look at my firm; strictly retail brokerage. Our net capital is like 400 times the min. requirement. We make money from a corporate standpoint (and believe me, I think management is far from brilliant). We do sh*t at my firm that the rest of you would scoff at (average account size is small, number of clients per broker is high, products selection is far more limited than a wire, etc. etc. etc.), and we are highly profitable. Not profitable @ 300K in production? Are you f'ing kidding me? I hate to tell you, but someone is blowing smoke up your arse if they tell you a retail brokerage can't make money on you when you are producing 300k (AFTER haircuts), and they are paying you out at 35 - 50%. Jesus. Plus all the nickle & dime fees clients pay! I would think, in a retail brokerage operation, the FA is the LAST job I would cut, or risk having people leave. My god! You don't produce, you don't get paid. What other employees does UBS/Wach/etc. have that are like that?! I just don't understand the mentality. What if Stifel adds a shatload more brokers? Then hire some more $35K a year HR pikers, and a few more $40k a year computer geeks and increase back office capacity. My god. It's pathetic to watch basically THE ONLY DIVISION in financial services to be PROFITABLE for the past 2 years get axed! Does firing a few thousand FAs make you executive twits feel better about your cash hemorraging i-banks? Someone enlighten me. /end rant. I lied. It's not end rant. Look at every company in the god damn S&P 500. See what their revenue per employee is. Then tell me that a company that makes toilet paper can be successful @ way less than $100K per employee, while a retail brokerage can't make money @ over $300K per employee. Now /end rant. I promise. Maybe. For now at least.[/quote] This is how you lose money ofn a $400K guy: You pay $2million for a $1.4million producer who brings about $300K profit to the firm each year. For the first 6.7 years you pay down his/her upfront check. For the next 1.3 years you enjoy the fruits of your business strategy, and the final year you wonder why your golden child is taking long lunches with branch managers from the next firm to pay $2million. So, what's wrong with this? It can't be the strategy, it can't be the recruit, it MUST be the $400K guy.Does anyone know what day this will all go down? Severance packages??? Anybody have any info???
So you have no info and want to seem like you do. Great thanks[/quote][quote=Chris Varick][quote=SuperRecruiter]In time, the answers shall be revealed…
Just wait untill monday, man!
[/quote] Callin you out.. it seems you know nothing..
[quote=iceco1d]Can someone please help me get my brain around this?
WTF is it with all of these firms talking about putting FA's in the "penalty box" and 'not retaining lower producing FAs" and "blood bath layoffs of FAs" --- are these firms driven by bean counter morons? I look at my firm; strictly retail brokerage. Our net capital is like 400 times the min. requirement. We make money from a corporate standpoint (and believe me, I think management is far from brilliant). We do sh*t at my firm that the rest of you would scoff at (average account size is small, number of clients per broker is high, products selection is far more limited than a wire, etc. etc. etc.), and we are highly profitable. Not profitable @ 300K in production? Are you f'ing kidding me? I hate to tell you, but someone is blowing smoke up your arse if they tell you a retail brokerage can't make money on you when you are producing 300k (AFTER haircuts), and they are paying you out at 35 - 50%. Jesus. Plus all the nickle & dime fees clients pay! I would think, in a retail brokerage operation, the FA is the LAST job I would cut, or risk having people leave. My god! You don't produce, you don't get paid. What other employees does UBS/Wach/etc. have that are like that?! I just don't understand the mentality. What if Stifel adds a shatload more brokers? Then hire some more $35K a year HR pikers, and a few more $40k a year computer geeks and increase back office capacity. My god. It's pathetic to watch basically THE ONLY DIVISION in financial services to be PROFITABLE for the past 2 years get axed! Does firing a few thousand FAs make you executive twits feel better about your cash hemorraging i-banks? Someone enlighten me. /end rant. I lied. It's not end rant. Look at every company in the god damn S&P 500. See what their revenue per employee is. Then tell me that a company that makes toilet paper can be successful @ way less than $100K per employee, while a retail brokerage can't make money @ over $300K per employee. Now /end rant. I promise. Maybe. For now at least.[/quote] ICE, IMHO the issue is not that those producers are not profitable (since it is all incremental revenue), it's more that many of them are trying to downsize their overhead structure and become more streamlined. They want to serve one type of client real well - the wealthy kind. So they don't want to employ thousands of extra home-office and regional people just to service all these little accounts. By reducing lower-producing FA's (who theoretically with long LOS have lower avg acount sizes), you are also reducing the overhead-per-FA, as well as the expense ratio for the same. It actually takes more to service the small producers than the big producers, because the big producers generally have teams (that they pay for) that service the clients. The little solo guys doing 300K by themselves rely on others for support. This is the other little secret wirehouse firms have as to why teams or so great to have. THEY pay for the support staff, not the firm. Obviously, you need home-office staff to process transactions, do compliance, registration, marketing, etc. But why not do it across fewer FA's and fewer accounts? And how many clients with 50K in an allocation fund need corporate cash management services, or will buy IPO's, or run institutional firms that need services, or have wealthy friends and co-workers? There are a lot of self-fulfilling advantages to serving wealthy clients beyond just larger account balances. It also makes selling a firm more attractive.[quote=B24][quote=iceco1d]Can someone please help me get my brain around this?
WTF is it with all of these firms talking about putting FA's in the "penalty box" and 'not retaining lower producing FAs" and "blood bath layoffs of FAs" --- are these firms driven by bean counter morons? I look at my firm; strictly retail brokerage. Our net capital is like 400 times the min. requirement. We make money from a corporate standpoint (and believe me, I think management is far from brilliant). We do sh*t at my firm that the rest of you would scoff at (average account size is small, number of clients per broker is high, products selection is far more limited than a wire, etc. etc. etc.), and we are highly profitable. Not profitable @ 300K in production? Are you f'ing kidding me? I hate to tell you, but someone is blowing smoke up your arse if they tell you a retail brokerage can't make money on you when you are producing 300k (AFTER haircuts), and they are paying you out at 35 - 50%. Jesus. Plus all the nickle & dime fees clients pay! I would think, in a retail brokerage operation, the FA is the LAST job I would cut, or risk having people leave. My god! You don't produce, you don't get paid. What other employees does UBS/Wach/etc. have that are like that?! I just don't understand the mentality. What if Stifel adds a shatload more brokers? Then hire some more $35K a year HR pikers, and a few more $40k a year computer geeks and increase back office capacity. My god. It's pathetic to watch basically THE ONLY DIVISION in financial services to be PROFITABLE for the past 2 years get axed! Does firing a few thousand FAs make you executive twits feel better about your cash hemorraging i-banks? Someone enlighten me. /end rant. I lied. It's not end rant. Look at every company in the god damn S&P 500. See what their revenue per employee is. Then tell me that a company that makes toilet paper can be successful @ way less than $100K per employee, while a retail brokerage can't make money @ over $300K per employee. Now /end rant. I promise. Maybe. For now at least.[/quote] ICE, IMHO the issue is not that those producers are not profitable (since it is all incremental revenue), it's more that many of them are trying to downsize their overhead structure and become more streamlined. They want to serve one type of client real well - the wealthy kind. So they don't want to employ thousands of extra home-office and regional people just to service all these little accounts. By reducing lower-producing FA's (who theoretically with long LOS have lower avg acount sizes), you are also reducing the overhead-per-FA, as well as the expense ratio for the same. It actually takes more to service the small producers than the big producers, because the big producers generally have teams (that they pay for) that service the clients. The little solo guys doing 300K by themselves rely on others for support. This is the other little secret wirehouse firms have as to why teams or so great to have. THEY pay for the support staff, not the firm. Obviously, you need home-office staff to process transactions, do compliance, registration, marketing, etc. But why not do it across fewer FA's and fewer accounts? And how many clients with 50K in an allocation fund need corporate cash management services, or will buy IPO's, or run institutional firms that need services, or have wealthy friends and co-workers? There are a lot of self-fulfilling advantages to serving wealthy clients beyond just larger account balances. It also makes selling a firm more attractive.[/quote] What a bullsh*t answer. These mopes have a business model that doesn't work and it won't. The first post above spells it out very well.[quote=stampede][quote=B24][quote=iceco1d]Can someone please help me get my brain around this?
WTF is it with all of these firms talking about putting FA's in the "penalty box" and 'not retaining lower producing FAs" and "blood bath layoffs of FAs" --- are these firms driven by bean counter morons? I look at my firm; strictly retail brokerage. Our net capital is like 400 times the min. requirement. We make money from a corporate standpoint (and believe me, I think management is far from brilliant). We do sh*t at my firm that the rest of you would scoff at (average account size is small, number of clients per broker is high, products selection is far more limited than a wire, etc. etc. etc.), and we are highly profitable. Not profitable @ 300K in production? Are you f'ing kidding me? I hate to tell you, but someone is blowing smoke up your arse if they tell you a retail brokerage can't make money on you when you are producing 300k (AFTER haircuts), and they are paying you out at 35 - 50%. Jesus. Plus all the nickle & dime fees clients pay! I would think, in a retail brokerage operation, the FA is the LAST job I would cut, or risk having people leave. My god! You don't produce, you don't get paid. What other employees does UBS/Wach/etc. have that are like that?! I just don't understand the mentality. What if Stifel adds a shatload more brokers? Then hire some more $35K a year HR pikers, and a few more $40k a year computer geeks and increase back office capacity. My god. It's pathetic to watch basically THE ONLY DIVISION in financial services to be PROFITABLE for the past 2 years get axed! Does firing a few thousand FAs make you executive twits feel better about your cash hemorraging i-banks? Someone enlighten me. /end rant. I lied. It's not end rant. Look at every company in the god damn S&P 500. See what their revenue per employee is. Then tell me that a company that makes toilet paper can be successful @ way less than $100K per employee, while a retail brokerage can't make money @ over $300K per employee. Now /end rant. I promise. Maybe. For now at least.[/quote] ICE, IMHO the issue is not that those producers are not profitable (since it is all incremental revenue), it's more that many of them are trying to downsize their overhead structure and become more streamlined. They want to serve one type of client real well - the wealthy kind. So they don't want to employ thousands of extra home-office and regional people just to service all these little accounts. By reducing lower-producing FA's (who theoretically with long LOS have lower avg acount sizes), you are also reducing the overhead-per-FA, as well as the expense ratio for the same. It actually takes more to service the small producers than the big producers, because the big producers generally have teams (that they pay for) that service the clients. The little solo guys doing 300K by themselves rely on others for support. This is the other little secret wirehouse firms have as to why teams or so great to have. THEY pay for the support staff, not the firm. Obviously, you need home-office staff to process transactions, do compliance, registration, marketing, etc. But why not do it across fewer FA's and fewer accounts? And how many clients with 50K in an allocation fund need corporate cash management services, or will buy IPO's, or run institutional firms that need services, or have wealthy friends and co-workers? There are a lot of self-fulfilling advantages to serving wealthy clients beyond just larger account balances. It also makes selling a firm more attractive.[/quote] What a bullsh*t answer. These mopes have a business model that doesn't work and it won't. The first post above spells it out very well. [/quote] Where's the evidence that the business model doesn't work? The fact that some firms got caught up in sub-prime issues and stumbled? Because the markets are down? Don't confuse those issues with long term profitability. I fear B24 has hit the nail on the head. Firms know a massive measure of profitablity is average production per broker, and nothing gooses that number faster than cutting out the lower producers, especially the senior ones. One 1MM producer is more profitable than 3 333.3M producers (less overhead) and the 3 reps tend to represent a higher level of legal exposure to the firm than the 1 1MM FA does. IMHO, if you're under 400k and at a wirehouse, you'd better be thinking about "plan B".It all has to do with decreasing cost structures. It is not just UBS but the entire wirehouse portion of the industry. The support structures are bloated and need to be reduced. There will be large layoffs at the corporate level at UBS and all other firms.
You will seee a decrease in the number of regions and all of the support that goes with those offices. Small branches will be sold and overlapping offices in medium and small loacations consolidated.
Look at the retention deals at ML, WFC and citimorg. None are compensating the under $500,000 producer. There is a reason, they do not make money on them. Margins are not large enough at UBS, about 10%. They are 20% at ML and SB. The reason in someways is scale. Not headcount scale, but revenue scale.
The under $500,000 producer is headed to the regionals were thay are welcome as they can make $$$ on them. The reason? The support structures at regional firms are not as extensive or expensive as the wirehouses.
Also, production is going down, the $600,000 producer in 2007 did $450,000 ish in 2008 and is headed to a $375,000 year in 2009 if the markets do not improve. this means that the staffing in your offices will decrease.
The cuts at UBS will be announced before the April 15th meeting. They will be extensive management cuts as well as FA cuts. If youare doing under $300,000 at UBS or any other wirehouse and are not on a team you are going to get laid off.
The wirehouses are going to have to totally rebuild there support model. It will be more team oriented, financial planning, fees and yet more transaction oriented at the bond level. The brokers left will be more sophisticated and knowledgeable, yet product offerings will return more to the basics.
So, help your clients and you will still survive.
If you are under $500,000 reaxamine your business model decide if it is still correct and if it can continue to be implimented at your current employer.
Good luck all.
WFC had a retention? There is a 400+ post thread that disagrees with you.It all has to do with decreasing cost structures. It is not just UBS but the entire wirehouse portion of the industry. The support structures are bloated and need to be reduced. There will be large layoffs at the corporate level at UBS and all other firms.
You will seee a decrease in the number of regions and all of the support that goes with those offices. Small branches will be sold and overlapping offices in medium and small loacations consolidated.
Look at the retention deals at ML, WFC and citimorg. None are compensating the under $500,000 producer. There is a reason, they do not make money on them. Margins are not large enough at UBS, about 10%. They are 20% at ML and SB. The reason in someways is scale. Not headcount scale, but revenue scale.
The under $500,000 producer is headed to the regionals were thay are welcome as they can make $$$ on them. The reason? The support structures at regional firms are not as extensive or expensive as the wirehouses.
Also, production is going down, the $600,000 producer in 2007 did $450,000 ish in 2008 and is headed to a $375,000 year in 2009 if the markets do not improve. this means that the staffing in your offices will decrease.
The cuts at UBS will be announced before the April 15th meeting. They will be extensive management cuts as well as FA cuts. If youare doing under $300,000 at UBS or any other wirehouse and are not on a team you are going to get laid off.
The wirehouses are going to have to totally rebuild there support model. It will be more team oriented, financial planning, fees and yet more transaction oriented at the bond level. The brokers left will be more sophisticated and knowledgeable, yet product offerings will return more to the basics.
So, help your clients and you will still survive.
If you are under $500,000 reaxamine your business model decide if it is still correct and if it can continue to be implimented at your current employer.
Good luck all.
WFC had a retention? There is a 400+ post thread that disagrees with you.[/quote] Didn't WFC institute some "client service" hurdles that looked like a retention package? A sort of retention package that would avoid the TARP-meets-bonuses-meets-Congress noises other firms have encountered?[quote=secretknowledge]It all has to do with decreasing cost structures. It is not just UBS but the entire wirehouse portion of the industry. The support structures are bloated and need to be reduced. There will be large layoffs at the corporate level at UBS and all other firms.
You will seee a decrease in the number of regions and all of the support that goes with those offices. Small branches will be sold and overlapping offices in medium and small loacations consolidated.
Look at the retention deals at ML, WFC and citimorg. None are compensating the under $500,000 producer. There is a reason, they do not make money on them. Margins are not large enough at UBS, about 10%. They are 20% at ML and SB. The reason in someways is scale. Not headcount scale, but revenue scale.
The under $500,000 producer is headed to the regionals were thay are welcome as they can make $$$ on them. The reason? The support structures at regional firms are not as extensive or expensive as the wirehouses.
Also, production is going down, the $600,000 producer in 2007 did $450,000 ish in 2008 and is headed to a $375,000 year in 2009 if the markets do not improve. this means that the staffing in your offices will decrease.
The cuts at UBS will be announced before the April 15th meeting. They will be extensive management cuts as well as FA cuts. If youare doing under $300,000 at UBS or any other wirehouse and are not on a team you are going to get laid off.
The wirehouses are going to have to totally rebuild there support model. It will be more team oriented, financial planning, fees and yet more transaction oriented at the bond level. The brokers left will be more sophisticated and knowledgeable, yet product offerings will return more to the basics.
So, help your clients and you will still survive.
If you are under $500,000 reaxamine your business model decide if it is still correct and if it can continue to be implimented at your current employer.
Good luck all.
WFC techanically did not have a retention. Take a look at how it is set up. Retention package has no strings attached to hit the numbers.
UBS is going to cut the fat and be an upscale “boutique” of 5000 advisors instead of trying to get up to 12,000 advisors.
From what I have seen they are being very selective on who gets show the door.
I think those saying UBS is being VERY selective on who get’s in the door right now is true. Deals are being cut back at UBS hard lately. There’s serious denial going on within the walls of the local offices to me. I know a load of guys there with heavy LOS who are at risk of getting rolled who continue to tell me how profitable they are. It’s hard to wake up and realize that your 08’ production is NOT your current production.
My dad who got me into this business forever ago told me I was only as good as my last month at least 1000 times over the decade we worked together. Harsh but true.
Wake up and smell the coffee guys, its going to happen. Before you sign on with SN check out the independent end, First Financial Equity Corp has been around for 25 years, has all the good stuff without the B.S. looks pretty good. Stifel is where Dain was 12-15 years ago, and wanting to grow, so where will you be in 5 years?
Nothing has gone down in our office the past two days, so the whole end of first quarter purge didn’t seem to happen. One thing I have heard is that it’s lower quintile FAs with double digit LOS they are targeting, not the newer FAs that have managed to grow their books through this crisis. Growth is key. Anyone else at a UBS office have anything to report?
[quote=dpiper]Wake up and smell the coffee guys, its going to happen. Before you sign on with SN check out the independent end, First Financial Equity Corp has been around for 25 years, has all the good stuff without the B.S. looks pretty good. Stifel is where Dain was 12-15 years ago, and wanting to grow, so where will you be in 5 years?[/quote]
Seriously???
All Fa’s no matter LOS or if they are on a deal. If you are on a deal and let go you will owe $$$$ to the firm. If in this situation, go back and read your EFL.
Most all trainees 3 years and under will be gone.
Deals will stop alll over the street for while.
do you know if it’s this week or next by chance? My contact said apr 17th ish but not 100%
I think the day everything will happen is after the managed money revenue hits the FA’s grid in April. If they cut anyone before that I think UBS will have a serious problem on their hands. How could they cut FA’s and then give the past 3 months of managed money revenue to another FA that inherits the account?
They pay you in May for Q2, and when you depart the next day you’ve been paid for 12 weeks but worked only 6. So, one of their entry level attorney’s sends you a letter with the sentence “we DEMAND payment.” It’s great to finally confirm who’s in charge. It’s a BONUS for sticking it out as long as you did. However, the FA who takes over your account does NOT get paid for the remainder of the quarter, all that revenue goes straight to the firm. Maybe branch level, don’t know.
Also, I think fee revenue hits end of April, I don't see this thread lasting another month.