EXCLUSIVE: UBS Works on Employee Overpayment Errors
ADP, the payroll processing company, made errors that resulted in overpayments to a significant number of advisors in 2018 at UBS AG’s U.S. wealth management business, according to a source at UBS.
“We can confirm that over a year ago, ADP became aware of processing errors within a recurring loans program for our client, UBS,” spokeswoman Allyce Hackmann, wrote in an e-mail. “As soon as the issue was discovered, ADP and UBS immediately began working together to identify and resolve the issue. We were able to reach an agreement on the best course of action to resolve the issue.”
UBS is likely to address its approach to the resolution, including whether it will attempt to recoup money from brokers or other employees, in upcoming meetings, the internal source said.
A UBS spokesman declined to comment on the ADP statement or on its plans.
The “recurring loans program” may refer to deductions of interest from paychecks on “forgivable loans” that UBS makes to advisors for recruiting and retention purposes, or reflect errors in calculating the principal amount on the loans, which amortize over a fixed number of years.
Loans to UBS financial advisors in the Americas on the Swiss bank’s balance sheet totaled $2.3 billion at the end of 2018, down 12% from a year earlier.
ADP, formally known as Automatic Data Processing, and UBS’ U.S. wealth business are both based in New Jersey. The late Frank Lautenberg, a former New Jersey senator, had been chairman and chief executive of ADP.
ADP’s Hackmann said that the issue was confined to UBS’ U.S. wealth unit and that UBS remains a client.
“We understand the significant impact issues like this can have on our clients and their business operations and take these matters seriously,” Hackmann wrote.