December 15, 2023
Louis Diamond Quoted
by Miriam Rozen
UBS Wealth Management USA is reworking a popular feature of its recruiting deals next year that had guaranteed experienced brokers’ deferred bonuses regardless of their revenue growth.
UBS managers have told external recruiters that it will revert next year to a more common bonus formula that will require brokers who join to boost their production by a set amount to receive additional back-end bonuses, according to three industry headhunters. The move will reduce the risk to UBS if brokers fail to perform and potentially lights a fire under some to join before the change, they said.
“UBS has tried the ‘get-it-while-it’s-hot’ approach a few times in recent memory to catalyze movement,” said Louis Diamond, a recruiter in New Jersey who does not represent the wirehouse but has moved its brokers to rivals.
UBS had been offering the deals with guaranteed back-end bonuses for several years. Brokers could earn as much as 400% of their trailing-12 month revenue paid out over a period of roughly 12 years. Usually a little less than half the total is paid as upfront cash while the rest is deferred.
The guarantees have had the intended effect with dozens of brokers from its wirehouse rivals including Merrill Lynch and Morgan Stanley joining this year. For example, at least 18 teams and advisors who managed $14.8 billion in client assets combined have joined UBS from Merrill this year, according to an AdvisorHub tally of previously reported departures.
UBS’s headcount of 6,142 brokers in the Americas ticked up 1% sequentially last quarter, and the firm reversed a trend of net outflows in client assets.
A UBS insider stressed that the offers will remain customizable and the firm may still be willing to structure them with a guaranteed salary in order to sway a top team.