Partnering helps bring assets in the door for UBS

UBS Wealth Management wants its high-end financial advisers to partner with its retail advisers to attract additional client assets — and it is making it worthwhile for the advisers who successfully pair up.

Retail advisers are encouraged to call in UBS private-wealth advisers to meet with certain clients who have a large sum to invest but haven’t committed it to UBS. Essentially, the retail adviser is pulling in a colleague who already handles large clients to close to the deal.

“We’re not smarter or better; we just do things differently,” said Jose Cornide, a UBS private-wealth adviser in Coral Gables, Fla. His team has presented to clients of seven or eight retail advisers over the past 18 months, and the result has been an influx of about $90 million in additional assets to the firm, he said.

UBS Wealth Management, which has $722 billion in client assets, isn’t the only firm that pairs up its advisers. However, chief executive Robert McCann said in May that he wants all the services available to the private-wealth group to be made available to any client who needs them, UBS spokeswoman Karina Byrne said.

The firm, a unit of UBS AG, is making a financial commitment to encourage partnering, as retail advisers who bring in a private-wealth adviser get 100% credit for those new assets that come in as a result of that introduction, Mr. Cornide said. The private-wealth adviser gets 50% credit, he said.

AGE A FACTOR

“The younger advisers embrace it more because they are trying to get on solid footing,” said Kevin Neal, a private-wealth adviser who works on Mr. Cornide’s team in Coral Gables. “Older advisers are more established and kind of feel they know what they are doing and don’t need anyone else.”

Mr. Cornide and Mr. Neal said that the 325 private-wealth advisers have access to investing professionals and a back-office team that specializes in banking, trusts, estates, initial public offerings and other areas of expertise that high-net-worth clients may require.

The private-wealth advisers have at least five $10 million relationships and have completed an extensive training and examination program. The training includes presentation skills and advanced investment instruction.

The private-wealth group is the most profitable division of UBS Wealth Management, Mr. Cornide said.

Even before Mr. McCann came on board, Mr. Cornide’s team recognized the sales force potential of UBS’ retail advisers, now 6,783 individuals in all 50 states.

Adviser Darran Blake has brought in Mr. Cornide’s team to meet with 20 to 30 different clients.

“They are a little more sophisticated than most other financial advisers,” she said. “This is a win-win for everyone.”

Many of Ms. Blake’s clients are young entrepreneurs and chief executives, and some have specialized needs that Mr. Cornide’s team can better meet. All the clients that she has introduced to him or Mr. Neal have been impressed, Ms. Blake said.

“The future of this business is to be able to do it all for our clients and help them find the answers,” said Ms. Blake, who added that she has hundreds of millions of assets under management and is seeking to hit the $1 billion mark with the help of Mr. Cornide’s team. “This is an amazing opportunity to take advantage of teams with different strategies and strengths.”

One advantage that the private-wealth adviser has is that he or she typically has about 30 to 40 clients, whereas the average adviser might have 400 different accounts, Mr. Neal said.

“They don’t have the time to get these big relationships done right,” he said.

MANAGER ACCESS

Access to more investing opportunities is another benefit of the private-wealth group.

“We’re really good at investing,” Mr. Neal said. “We find managers that most people don’t use.”

For instance, one of the investment managers that Mr. Cornide’s team works with handles $550 million and has lost money in only one year — in 2008.

“It’s hard for a normal guy to find that,” Mr. Neal said.

Private-wealth advisers also have access to private product placements that may be limited to a small pool of investors. Retail brokers could have access to such products, but they would have more steps to go through to get it, Mr. Neal said.

Bank of America Merrill Lynch’s 15,000 advisers regularly partner with each other and have for at least five years, said spokeswoman Selena Morris. The compensation structure for the partnerships is arranged by the individual teams, she said.

Morgan Stanley Smith Barney LLC has a process through which its advisers can partner on accounts with its private-wealth advisers who specialize in serving ultrahigh-net-worth clients.

Advisers with Morgan Stanley Private Wealth Management worked with former Dean Witter advisers, and since the June 2009 merger, the partnering activities have expanded to include Smith Barney financial advisers, said MSSB spokesman James Wiggins.

“Many of our advisers enter into these kinds of partnerships and find them useful to expand relationships with clients who have sophisticated and complex needs,” he said.

The arrangements involve negotiated fee sharing, Mr. Wiggins said.

E-mail Liz Skinner at [email protected].

Related Topics: Morgan Stanley & Co., Smith Barney, UBS AG, Wealth Management