No changes to compensation plan for UBS advisers in 2019

Wirehouse continues to back away from linking non-solicitation agreements to adviser bonuses

Sep 12, 2018 @ 2:46 pm

By Bruce Kelly

UBS Wealth Management's 6,936 financial advisers in the United States will see little to no changes next year in how they are paid by the firm, according to an internal document obtained Wednesday afternoon by InvestmentNews.

The status quo includes the firm's backing away from its controversial attempt earlier this year to roll out non-solicitation requirements linked to broker bonuses.

Those bonuses, dubbed "strategic objective awards" by UBS, will "remain the same," according to the memo, with cash and stock deferred over six years.

"It's good news that the bonus is not tied to the non-solicitation agreement, but I'm still watching them closely for some kind of non-solicitation agreement as part of a new contract," said Casey Knight, executive vice president and managing director at ESP Financial Search, a recruiting firm. "The non-solicit could happen at UBS but just not be linked to the bonus. UBS left the protocol for a reason."

UBS and Morgan Stanley last year left an industry agreement, known as the protocol for broker recruiting, that makes it easier for an adviser to change employers and move to another brokerage firm.

One tweak in next year's pay plan is that UBS will allow greater flexibility in how teams pay bonuses to their members. Another tweak is the elimination of the cap on bonuses for net new households.

"For 2019, our core plan, including our enhanced grid, strategic objective awards and the aspiring legacy financial advisor program, remains in place," according to the memo. "Additionally, we continue to only make changes based on response to regulation or financial advisor feedback. The 2019 plan has been kept simple and consistent and aligned to our guiding principles, continuing to reward on loyalty, growth, productivity and teaming.

"We believe our plan is industry-leading with several key differentiating elements," the memo said.

Those differentiating factors include the compensation plan's simplicity, a payout of potentially 50% of an adviser's fees and commissions, robust team pay and retiring advisers' ability to sell their book of business to UBS for up to 300% of annual production.


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