March 20, 2024
Louis Diamond Quoted
By Bruce Kelly
“UBS will be the biggest loser of advisor share in 2025,” according to the report, which was published this week by Diamond Consultants and is titled “Financial Advisor Transition Report.”
“Recent compensation plan changes and subsequent comments from management about future cost-cuts were simply a step too far for many UBS advisors,” according to the report. “We predict this will be the proverbial straw that breaks the camel’s back for many, and attrition from UBS may well exceed 10% of all U.S. advisors.”
“It remains to be seen if the firm will walk back some of the changes, especially cuts to 12b-1 fees,” according to the report.
Charges to financial advisors’ clients labeled “12b-1 fees” are kicked off by mutual funds each year and go towards paying for marketing, distribution and other expenses, often including a portion that goes to financial advisors and may be part of an advisor’s annual revenue stream.
Diamond Consultants is a third-party industry recruiter and works with other broker-dealers that may be seeking to hire advisors currently working at UBS.
“UBS’ 2025 compensation plan change was not received well by its population of advisors,” said Louis Diamond, president of Diamond Consultants, in an interview this week. “For the first time in memory, just about every advisor regardless of size, mix of business, growth, or longevity was harmed.”
“While compensation changes alone aren’t enough to justify a transition, it’s proven to be the straw that breaks the camel’s back for many large teams, especially combined with executive comments around cost cutting,” he added.
Meanwhile, financial advisor movement throughout the industry in 2024 was relatively flat when compared to a year earlier, according to the report, with a total of 9,615 experienced advisors changing firms last year.
That’s compared to 2023, when 9,674 advisors changed firms.
