Exclusive: UBS' new adviser pay rewards cross-selling

Tue Dec 4, 2012 6:54pm EST
 
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By Jennifer Hoyt Cummings

(Reuters) - UBS Wealth Management Americas released its 2013 compensation plan to its financial advisers on Tuesday, announcing changes that will give them incentives to sell a wider range of products and bring in more revenue.

There are also changes to the compensation structure that will likely help the company retain more advisers in what is an increasingly competitive landscape for top talent. The new plan could also encourage UBS advisers to become more tight-fisted with discounts it gives on clients' advisory accounts.

Jason Chandler, head of the firm's 7,000 advisers, told Reuters that the new plan reflects clients' desire to obtain a wide range of services from advisers, including financial plans and products like mortgages and credit lines.

UBS, a division of Swiss bank UBS AG UBSN.VX UBS.N, is rewarding its advisers for taking advantage of these kinds of banking services at a time when rival Morgan Stanley Wealth Management is losing advisers who feel the firm is weak in providing loans to private banking clients.

Among the highlights in the new plan: UBS advisers will soon be able to access up to half the money in their deferred compensation accounts in the form of a loan. Currently, most of advisers' deferred compensation does not unlock for at least six years. UBS couldn't immediately confirm when those loans will begin.

Advisers will have to pay back any outstanding money on the loan if they switch firms, so those who take advantage of this option - say to buy a home - may be less likely to leave the firm.

Overall, about 90 percent of how UBS advisers are paid remains the same, Chandler said. The payout grid, which is industry parlance for the chart used by brokerage firms to determine advisers' pay, has not changed. And the firm has left the minimum account size needed for advisers to be paid commissions at $75,000. Some other firms have raised account minimums for payment in the last several years.

Here is a summary of highlights from the plan, according to Chandler:   Continued...

 
The company's logo is placed in front of an office of Swiss bank UBS in Zurich December 4, 2012. REUTERS/Arnd Wiegmann