2018 Comp: UBS Incents Brokers to Offload ‘Small’ Accounts to Call Center
In a sign that UBS’s U.S. brokers still service plenty of sub-million-dollar households, the broker-dealer that promotes its high-net-worth panache is offering a new incentive to encourage advisors to refer smaller clients to the firm’s call center.
Under the 2018 compensation plan that client advisory group head Brian Hull outlined internally on Tuesday afternoon, brokers will receive full production credit on their payout grids for any accounts of over $100,000 referred to the firm’s Wealth Advice Center, according to several brokers.
What’s more, any activity from the referred account will be credited in full to the broker for as long as he or she remains with UBS, and will be viewable online on production pages, they said. That helps further UBS Americas President Tom Naratil’s ongoing plan to incentivize broker retention at a time when the firm has slashed its recruiting budget.
“While the 2018 plan is pretty much a non-event, the small-household referral is actually a huge incentive,” said one broker who spoke on condition of anonymity. “You will lose ownership of the relationship but it’s great if you plan to retire from here.”
A UBS spokeswoman did not respond to a request for comment on the referral incentive.
In 2014, UBS raised the minimum household account size for which brokers get paid to $100,000 from $75,000, but encouraged the branch-based brokers to focus primarily on accounts with at least $250,000 by giving up low-yielding accounts. About 52,000 accounts had been referred to the Advice Center in 2013, the company said at the time.
In public presentations, UBS Americas executives say they are focused today on customers with at least $500,000 at the firm, and often make reference to their service of million-dollar clients.
Morgan Stanley, like UBS, continues to offer payouts on households over $100,000 but Merrill Lynch sets a floor of $250,000 (while giving one-time incentives for referrals to Bank of America’s no-frills Merrill Edge platform).
As sources forecast two weeks ago, UBS has not changed its core payout grid for 2018, according to brokers who listened to Hull’s call. Like Wells Fargo Advisors, however, it will no longer give production credit for brokers’ and their families’ own retirement accounts as of January 1, 2018.
In what broker called a minor annoyance, the firm is paying its cash bonus on 2017 incentive awards in March 2018 instead of February.
Going forward, UBS Wealth Management Americas also is becoming more parsimonious with its balance sheet when it comes to making loans to its force of almost 7,000 brokers.
It will no longer let brokers take out loans collateralized by deferred compensation awarded for meeting “strategic objectives” such as hitting net new business goals, several brokers said. And some deferred cash bonuses formerly given upfront as six-year forgivable loans, are now being offered only in monthly installments, one broker said.