UBS Adjusts FA-Recruiting Packages: Pushes Total Bonuses Up to 260-280%

Morgan Stanley and Bank of America/Merrill Lynch, in particular, are paying about 330 percent in total over five years, 120-140 percent in cash upfront and up to five bonuses, nearly all cash, according to the recruiter. “Morgan Stanley’s is all cash; Merrill’s includes some stock,” she says.

“Unless the advisor is in growth mode and has a really good shot of hitting the backend bogies, which means you have to be at certain levels of assets and production at the end of years one, two, three, four and five, these are not deals that make sense,” explains Diamond.

As for Wells Fargo Advisors, the firm “has never wanted to be the biggest deal on the street,” according to Diamond. It is offering about 200 to 225 percent as its maximum recruiting deal. “The sweet spot for Wells is the $500,000 to $1 million producer,” she adds.

With the new UBS recruiting package, advisors can earn four asset-based bonuses for their performance in the first four quarters of the first year after they join the Swiss-based firm.

The first backend bonus is 55 basis points of what an advisor has at the end of the first quarter in terms of assets; the second is 50 basis points of what you have at the end of the second quarter; 45 basis points for the end of the third quarter; and 40 basis points for the fourth quarter, experts say.

“At the end of month 24, if you are at 85 percent of your recruited trailing-12- months’ production, you get an extra 50 percent of actual UBS production. Plus, at the end of month 36, if you are at 100 percent of your recruited trailing-12- months’ production, you get 50 percent of your actual UBS production,” Diamond explains.

Thus, UBS total recruitment package offers FAs up to 280 percent of their existing yearly sales.