The effective date for these planned shifts is now Oct. 1, rather than July 1, and affects how advisors qualify for certain team and individual payouts. Other changes affect how their membership in elite production-based groups is determined.
UBS would not comment on the news, reported by AdvisorHub and based on a memo from Jason Chandler, who heads the roughly 6,000 advisors in the United States.
Late last year, UBS increased its cash-grid thresholds for 2020 in a move to push growth. The new plan requires advisors with payouts of between 39% and 50% of revenues to increase their fees and commissions by $200,000 in 2020 to achieve the same payouts earned in 2019.
For instance, a 28% payout is earned when advisors produce $300,000 in revenue vs. $200,000 in 2019. The 37% payout is available to advisors with $500,000 to $625,000 in revenue, while a 45% payout applies to those with $2 million to $2.5 million.
In late December 2019, UBS said the new team revenue thresholds for its combined team grid, or CTG, and highest producer grid, HPG, would take effect on July 1, 2020, along with the new production thresholds for industry length of service. Average production per advisor for the CTG and HPG team qualification, though, went into effect on Jan. 1.
In late March, Morgan Stanley postponed (to Oct. 1) a planned jump in the levels of yearly fees and commissions (or production) under $5 million used as thresholds in the incentive comp grid. The shift generally boosts the production thresholds below $5 million by some 10%.
The wirehouse kept in place some shifts previously set to start May 1, including one tied to net acquired assets, which lets advisors earn up to 3 percentage points on the credit rate applied to revenue from clients with NAA of $5 million and up. It also will use assets plus liabilities to determine if a household is subject to its small-household policy.
Recently, two managers at Morgan Stanley were recruited by UBS: Mitch Markley will be joining as its market head following his departure from the rival, where he worked for 15 years. Justin Frame is set to be the Los Angeles-Orange County market head; he spent 25 years at Morgan Stanley.
Last week, UBS beat earnings estimates with a 40% jump in first quarter profits to $1.60 billion, or $0.43 per share, vs. $1.14 billion, or $0.30, a year ago. Its revenues grew 10% to $7.9 billion.
Its Global Wealth Management unit saw its net income improve 41% over last year to $1.22 million, and its operating income grew 14% to $4.55 million.
In the Americas, profits before taxes rose 16% from a year ago, or $52 million, from Q1’19 to $380 million. Revenue grew $222 million from last year to $2.4 billion.
The unit’s total assets stand at $1.23 trillion, with net new money of $3.3 billion in the first quarter.
Its advisor headcount, though, for the U.S. and Latin America dropped 294 from last year and 44 from the prior quarter, ending the quarter at 6,496.
Also last week, as part of UBS’ $30 million commitment to fund COVID-19 relief efforts globally, UBS Americas said $3.3 million will be distributed across the U.S., Puerto Rico, Brazil, Canada and Mexico.
“We’re proud to partner with a number of incredible organizations to help address some of the most pressing issues that our region is experiencing during the COVID-19 pandemic,” said Tom Naratil, president of the Americas and co-president of Global Wealth Management, in a statement.
— Check out What to Make of Wirehouse Comp Plans on ThinkAdvisor.