2018 Compensation: UBS Promises U.S. Brokers No Payout Change
UBS Wealth Management Americas’ top brass is reassuring its almost 7,000 brokers that they won’t need shock absorbers when the company unveils its 2018 compensation plan in coming weeks.
Five brokers across the U.S. in both its wealth management and private bank units said executives are spreading the word that there will be no payout grid or other major changes, in sharp contrast to previous years. The message was reinforced last month by UBS Americas boss Tom Naratil at a recognition club meeting to top producers, two sources said.
UBS spokespeople did not respond to requests for comment.
Brokers in the U.S. wealth management industry anxiously await unveiling of annual compensation plans, which are regularly updated to encourage sales of products, types of accounts as well as particular customer segments that senior management favors at the moment. Merrill Lynch, for example, is expected to add carrots and sticks to its 2018 plan to be released in early November that encourages brokers to increase new account openings to offset account attrition.
The most carefully watched metric at most firms is the compensation grid, which keys the percentage of customer fees and commissions that brokers pocket to the total revenue they produced in the previous year.
“Naratil said there will be no changes to the comp,” said one veteran advisor who spoke on condition of anonymity. “Every year some things are tweaked, so that is pretty incredible.”
UBS Wealth Americas this year has implemented a host of changes to compensation, sales management and recruiting in an effort to cut costs and improve broker loyalty to the firm. However, it backpedaled on eliminating a bonus tied to selling loans and other “wealth management” products after an outcry from brokers.
The 2018 plan, to be sure, will tweak some metrics for special bonuses, according to several sources, but one described the changes as “small potatoes” relative to what has occurred in the past.
UBS Wealth Americas also will continue to implement a separate retirement-plan “return on assets” grid introduced in June, when the DOL fiduciary rule took partial effect, that ties payout on individual retirement accounts to a broker’s total IRA production in the previous year.
UBS Wealth Management Americas also is expected to impose policies for 2018 that will encourage brokers to stop fee waivers or discounts to even their best customers, several brokers said.
-Mason Braswell contributed to this story.