Raymond James, RBC reel in UBS advisors managing over $690M in assets

Raymond James and RBC Wealth Management have announced new advisor additions from UBS just as a change in pay structure threatens to hurt retention among the Swiss banking giant's fleet of US advisors.

Raymond James welcomed Russell Cappelen, a seasoned advisor who reportedly managed a portfolio exceeding $390 million, to its employee advisor channel, Raymond James & Associates.

The firm announced the move in Vero Beach, Florida on Tuesday.

Cappelen – whose tenure of more than 40 years in the financial services industry, including a 25-year stretch at UBS, according to his BrokerCheck profile – transitioned along with Diane Nelson, his practice business manager.

The move represents another step forward for RJA's efforts to grow its presence in Florida, a key market for retirement and wealth management services.

Meanwhile, RBC Wealth Management expanded its talent pool in Las Vegas by adding Jordan Grangard, who managed nearly $300 million in assets. Grangard specializes in serving ultra-high-net-worth and business owner clients.

His team, including Jelena Draganic, Derek Smith, and Cheyeanne Escanuela, also joined RBC, reinforcing the firm's capabilities in handling complex client portfolios and building on its competitive edge in the region.

These acquisitions come as UBS faces a potential wave of exits within its own ranks. During a conference call to discuss its 2024 results, the firm highlighted changes to the firm's compensation plans designed to align advisor incentives more closely with UBS's strategic goals. These changes include modifications to the compensation structure and a planned reduction in certain types of advisor bonuses. 

Around the end of 2024, industry sources in the know said UBS was rearranging its pay plan for advisor in 2025, which would include scaling back a team bonus that was unique in the industry.

CFO Todd Tuckner admitted the pivot could lead to an increase in financial advisor attrition in the short term.

“In the US, our efforts to align financial advisor incentives with our strategic priorities may result in a short-term increase in FA attrition, creating an additional headwind for net new assets in the coming months,” Tuckner said at the earnings call. 

If it comes to pass, those exits could pose additional challenges to achieving UBS's targets of gaining $100 billion in net new assets by 2025, and boosting its profit margin in the Americas from 10 percent to 15 percent by 2027.

The potential for increased advisor turnover at UBS has also become a focal point for industry observers. A new report by Diamond Consultants projected that UBS could lose up to 10 percent of its advisor workforce in the US in 2025, or 600 advisors, attributing the potential exodus squarely to dissatisfaction with the new compensation model. 

“Recent compensation plan changes and subsequent comments from management about future cost-cuts were simply a step too far for many UBS advisors,” the report read in part. "We predict this will be the proverbial straw that breaks the camel’s back for many."

The report highlighted in particular reductions to 12b-1 fees, where clients are charged based on investments in mutual funds. Those fees go toward paying for marketing, distribution, and various other expenses, oftentimes including a chunk that goes to financial advisors that may form an integral part of their annual revenue stream.

According to a new report by Cerulli, wirehouse advisors currently derive 80 percent of their revenue from asset-based fees, with another 18.6 percent coming from commissions. 

Louis Diamond, president of Diamond Consultants, said UBS' 2025 stingier compensation plan has proven unpopular as it impacted advisors of virtually all stripes across its US operations.

"For the first time in memory, just about every advisor regardless of size, mix of business, growth, or longevity was harmed," he told InvestmentNews.