UBS, after dumping the broker protocol, continues to see brokers come and go

The wirehouse has seen 14 individuals or teams leave and five join for a net loss of $2.4 billion in AUM

Mar 15, 2018 @ 2:54 pm

By Bruce Kelly

When UBS Financial Services Inc. decided to leave the protocol for broker recruiting at the end of November, many in the industry believed it would have a chilling effect on broker movement at the wirehouse.

That has not happened. Brokers continue to come and go at UBS, with those leaving outpacing the number joining over the past three-and-a-half months.

From the end of November, when UBS decided to dump the protocol, InvestmentNewshas tracked 14 individual or teams of advisers leaving UBS with about $4.3 billion in assets under management. Over the same time, InvestmentNews tallied five teams or individuals joining UBS Wealth Management Americas, and those advisers manage about $1.9 billion in AUM.

"The irony is, what UBS did by departing the protocol so abruptly accelerated some people leaving," said James Heavey, a partner at Barton LLP. "For individual advisers or groups on the fence at the firm, UBS gave them the incentive to accelerate the process and leave."

He added that the recent flap over UBS and advisers' non-solicitation agreement migth have alienated some advisers and shape their thinking about staying or going at the firm.

Last month, UBS at first said it was requiring brokers to sign an updated non-solicitation agreement, prohibiting them from contacting former clients for 12 months after leaving the wirehouse and linking it to the payment of bonus money earned in 2017. Bowing to pressure, the firm quickly changed its course and said it would delay the change for a year.

A spokeswoman for UBS, Maya Dillon, declined to comment when asked about advisers leaving or joining UBS since the end of November.

Most recently, a husband and wife team, Gary and Nancy Sampson, on March 2 left UBS in Bakersfield, Calif., and are now registered with Wells Fargo Advisors, according to Mr. Sampson's BrokerCheck report. The Sampson team produced almost $1.2 million in annual fees and commissions and had about $180 million in AUM, according to one source who asked not to be identified.

Mr. Sampson did not return calls this week to comment.

Almost two years ago, UBS Wealth Management Americas said it would shift strategies and focus efforts on retention of top-producing advisers while cutting back on recruitment.

Earlier this month, UBS said that it had reduced the amount of money it spent last year on signing bonuses for new brokers, while at the same time increasing compensation for existing advisers.

Despite the shift in policy, it has continued to have success in recruiting advisers.

In February, UBS said it brought on a new team in Silicon Valley led by Brad Frederickson with $400 million in AUM and $3.2 million in annual production of fees and commission. Mr. Frederickson and his team were formerly registered with Wells Fargo Advisors.

Created in 2004 by a handful of large firms, the broker protocol for recruiting has made it easier for brokers to change firms. Last fall, UBS followed the lead of Morgan Stanley, which told its employees at the end of October it would no longer work under the protocol.

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