Mindy Diamond Quoted
By Thomas Coyle
Last month, UBS Financial Services, the U.S. wealth management arm of the Swiss megabank, published in its latest ADV filing with the SEC a change to its payout schedule for distinct financial planning services, a fact brought to light on April 23 by FA-IQ sister publication Gatekeeper IQ. The whole thing might seem straightforward enough, but industry experts put very different colors on it…Under the old system, UBS advisors who charged clients for financial plans separately from investment plans could get a split of “grid” — which can range from about 30% to about 60%, depending on variables including size of account and overall productivity — plus 3% for expenses. Now, financial planning services separately billable at more than $1,000 trigger a 50-50 split between the firm and the advisor, who can claim an additional 15% for expenses, up to $25,000 a year.
It doesn’t hurt UBS to be flexible in such matters at a time when big firms are losing ground to independent advisors, says Mindy Diamond, CEO of advisor-recruiting firm Diamond Consultants in Chester, N.J.
RIA assets grew by 13% in 2011, while the wealth management industry as whole — which is dominated by large banks — saw asset growth of just 1.3%, according to research firm Cerulli Associates.
Against this backdrop, it makes sense for UBS to give advisors more say in how they run their practices, according to Diamond. “Advisors want choice and control, and this gives them more of that,” she says.
