UBS publishes the 2022 financial advisor compensation grid
A communications agency aimed at stemming the flow of separatist brokers to the independent channel is raising the salaries of more than half of its some 6,000 financial advisers.
After rival Merrill Lynch made slight changes for higher pay as part of his 2022 Broker Compensation Grid and JP Morgan Advisors unveiled an overhaul to align its model with that of other companies, UBS unveiled its plan for next year through a media interview with an executive earlier this month. Starting in January, UBS will streamline its pay grid to a formula based simply on production and a 12-month tenure, with higher account minimums and incentives for teams.
The staff of UBS Wealth Management Americas advisers has fallen in recent years, as the company reduced its recruiting bonus loans using an approach it described as “quality, not quantity.” Large employee brokerage firms face more competition than ever for talent from a growing group of AIR platforms and consolidators, as well as independent brokers. UBS seeks to retain the practices that generate the most business, said recruiter Mark Elzweig.
âThe best producers are very valuable and are more and more popular day by day. Companies want to retain and hire as many as possible, âElzweig said in an email. âUBS is charting a career path here for its most productive advisors. The message is simple: stay here, be part of a team, and we’ll increase your compensation as your longevity increases.
UBS representatives declined to provide details of its pay grid or make executives available to discuss it with Financial Planning, although the company has confirmed information that appeared in an interview with Jason Chandler, his director of Wealth Management USA, in Barron. The publication AdvisorHub reported more details in an internal company memo.
Next year, registered representatives with tenures of at least 20 years at UBS will earn a payout of 60%, which is 1.5 percentage points more than the largest share of advisors’ income with annual production. $ 2 million among all employee brokerage firms, according to the 2021 Salary Grids disclosed by 10 firms as part of FP annual remuneration report. The figure is 800 basis points above any Wirehouse compensation grid for 2021, although individual net compensation can vary significantly from the averages reflected in the annual study.
Advisors “don’t have to do calculations beyond how long they’re at UBS and how much income they’re making,” Chandler said. Barron. “They don’t have to worry about conflicts, targets or the number of accounts.”
More than half of the company’s 6,266 reps will achieve higher earnings next year, according to the two publications. With advisors receiving less than 1% of their 12-month income from small accounts below $ 250,000 and above its current minimum account of $ 100,000, the company pays advisors an incentive if they refer those households to its. digital branch and call center, UBS. Heritage counseling center. In addition, since 60% of representatives are part of teams, UBS will pay groups of advisers a higher rate than they would earn individually.
“Our new grid will provide more certainty, transparency and simplicity to your reward structure,” the company said in the manager rating obtained by AdvisorHub.
Over the past year, 87 net reps have left UBS, which is far less than the more than 1,000 advisers missing from Q3 to Q3 staff. Wells fargo and Bank of America, parent company of Merrill Lynch. Wells Fargo and Morgan Stanley, a communications firm that does not publicly disclose its advisor numbers, have not shared their 2022 grids.
Independent wealth managers such as Snowden Lane Partners, a RIA and brokerage firm backed by private equity firm Estancia Capital Partners, get wire breakaways for many of the same reasons as when the company was launched. in 2011, according to President Lyle LaMothe, the former director of the US wealth management arm of Merrill Lynch.
The company added around 15 advisors with $ 2.5 billion in client assets in 2021, most of them spinning mills. The level of confidence advisors feel when signaling to their clients that they have more choice and independence from exclusive products and services has increased “exponentially” in recent years, LaMothe said. in an interview.
âThe premise has remained relatively constant,â he said. âAbout ten years ago, it was more the pioneering spirit that encouraged people to move from the safety of the spinning to the independent chain. Today I think it is considered much less risky. I think it can be considered more risky to stay.