UBS advisors describe a culture defined by wins and losses—and they are asking tough questions about what the future holds.

UBS is a mystery, even to many of its own advisors—who, with surprising consistency, point out contradictions within the firm that force them to weigh the good against the bad on a regular basis.

On the one hand, as the largest global wealth manager, the firm boasts an internationally renowned brand, a sophisticated investment, trust, and lending platform, and a more boutique feel than its direct competitors. On the other hand, the firm is experiencing significant advisor attrition.

It’s these contradictions that are at the heart of advisor frustration. Most fundamentally, advisors voice concern over what the firm will look like in 5 years and beyond—unclear as to its long-term vision and the direction the firm will take.

This has left many advisors – including top, long-tenured teams – to struggle day-to-day, balancing the desire to serve clients best and grow the business against the challenges they face. That is, challenges that make it hard to do business and leave them feeling out of touch with decision-makers—and uncertain about the future.

What we have learned from UBS advisors

Our in-depth and candid conversations with UBS advisors have provided a unique lens into how they view their firm – the strengths and the challenges – often revealing the frustrations leading them to consider alternatives. While everyone has a unique perspective, specific frustrations seem to unify UBS teams—hindrances that often rise to levels that impact client service, growth, staff efficiency, and overall contentment.

1. Advisors often feel disconnected from senior leadership, even though UBS is a fraction of the size of the other wirehouses. The firm functions like a bureaucracy with layers of administration: managing to the lowest common denominator and operating without openly communicating with the field.
2. The firm’s US presence is considered subscale (relative to its formidable competitors, Morgan Stanley, Wells Fargo Advisors, and Bank of America Merrill). This raises the question of how it can continue to remain relevant and invest at the same levels—and compete against both larger institutions and boutiques like Rockefeller and William Blair that are built to be small, lean yet nimble, and highly responsive to their advisors.
3. Advisors see capital as being diverted from providing necessary support to the existing advisor community in favor of growth via recruiting. For example, advisors complain that UBS has not reinvested in technology and support resources resulting in subpar capabilities. Yet the firm is devoting significant capital to competitive recruiting, offering one of the industry’s richest deals that are often billed as being “fully guaranteed”—meaning an advisor must only stay employed by the firm to receive the full package. Put another way, the firm is cost-cutting in ways that directly impact legacy advisors, yet they are paying huge deals to attract experienced advisors to the firm without incentivizing growth. The lack of prioritization on a leading training program similarly raises questions about how UBS chooses to invest in wealth management. A training program facilitates the development of a next gen critical to advisor succession planning and communicates a commitment to the future.
4. In sharp contrast to the firm’s success in attracting top talent from other firms, UBS is still dealing with significant attrition—resulting in a shrinking community. Both long-tenured advisors, and those still under recruiting agreements are feeling that the firm overpromised and underdelivered. The firm is particularly vulnerable amongst a significant number of advisors recruited via a “limited time offer” enhanced deal in 2008 and 2009—and no longer have any repayment obligations. UBS has already experienced losses from this contingency and stands to lose more since these advisors are now free agents. For example, UBS reported 6,245[1] financial advisors in the Americas region at the end of 2022—representing a 551 reduction in net headcount from 2010.[2] And according to our 2022 Advisor Transition Report, UBS lost a net 87 experienced advisors despite paying above-market recruitment deals to entice advisors.
5. Advisors often fail to receive the staff support they need or are entitled to (based on production levels), a frustration magnified by the added pressure of hiring freezes. As a result, advisors and their staff are challenged in meeting the demands of their clients and the overall business operation—including phones going unanswered and paperwork not being completed in a timely fashion. And already feeling staff pressures, teams complain that they have more responsibility for middle- and back-office functions redirected to them by the firm and are burdened with increasing nuisance oversight.
6. UBS advisors describe obstacles to utilizing certain resources, often denied access except for a limited subset of the ultra-high net worth. For example, advisors tell us that lending needs may go unmet where the relationship is not large enough. Even the availability of financial planning resources may depend on the size of the account.
7. Advisors see the firm as becoming more like a private banking model, leaving those with smaller clients or books of business feeling undervalued and underserved. There’s growing concern that it will be increasingly difficult to serve more mass affluent clients—with a corresponding loss of control over the choice of clients they work with.
8. UBS has been known to communicate its views and positions directly to clients without the advisor’s knowledge or involvement. It’s an action that demonstrates the belief that the client belongs to the firm rather than respecting the preeminence of the advisor-client relationship. UBS’s withdrawal from the Protocol for Broker Recruiting in 2017 further validated this theory.
9. Already feeling uncertain about the future, advisors question whether the acquisition of Credit Suisse creates a further distraction from US wealth management—and will result in further instability in senior leadership and a culture even less inclined to devote resources to the US.

But it’s not all bad news. UBS still offers a robust platform with a strong ability to serve the very wealthy as well as high net worth international clients. The firm’s advisors remain among the industry’s most productive and profitable. UBS advisors had, on average, $1.8mm in production for 2021, an increase from $1.5mm for 2020. [3] By contrast, Merrill’s average advisor production in 2020, with over 17k advisors, was $1.17 million.

The acquisition of Credit Suisse may further strengthen UBS’s global stature, already positioned as the world’s largest wealth manager. And despite exiting the Protocol for Broker Recruiting in 2017, UBS remains a destination for high-end teams.

What the future holds for UBS and its advisors

Looking ahead, UBS will continue to enjoy recruiting success, certainly fueled by robust transition packages with compelling terms whose beneficiaries have included private banking-oriented teams as well as more traditional advisors who are drawn to the global prestige. It’s a destination of choice for those who favor the uniquely guaranteed structure of the transition deal—one that generally removes the requirements to hit specific revenue or asset targets to receive the deal’s full value.

But UBS will also continue to see attrition of quality tenured advisors, emboldened by the relative absence of temporary restraining orders (TROs) and other measures by UBS designed to deter advisor movement as well as encouraged by the proliferation of legitimate options. UBS advisors typically command strong interest from their competitors and are highly successful in moving their businesses.

The firm is certainly not alone in the irony of scoring high-profile recruiting wins while at the same time experiencing dissatisfaction among the advisor community. And in an environment that has fostered intense competition for top talent among both traditional firms and the newer boutiques and independent models, failure to solve for advisor frustration will continue to be met by attrition. The reality is that advisors want to be happy again in their work. Even the largest and longest-tenured teams, who would have been unlikely even to consider a move a few years ago, are “voting with their feet” as they ask themselves if their firm will still be the right one in the long term and will allow them to maximize enterprise value of the businesses they’ve built.

When advisors examine their firm objectively, even critically, expecting more of it because they know they have legitimate alternatives and don’t have to settle, the industry as a whole benefits. Firms are forced to evolve and reinvent to remain relevant, and clients win as advisors continue to rise to meet growing expectations.

[1] https://www.investmentnews.com/ubs-wealth-management-americas-adds-assets-but-pace-slows-in-tough-2022-233375
[2] https://www.thinkadvisor.com/2011/02/08/2010-q4-earnings-ubs-americas-posts-loss-despite-continuing-net-inflows/
[3] https://www.financialadvisoriq.com/c/3505714/437844/leads_wirehouses_advisor_productivity

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