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UBS Nudges FAs to Move Small Accounts to Call Center

October 20, 2017

UBS Wealth Management Americas is adjusting its payout plan to encourage advisors to shift smaller accounts to its call center, FA-IQ sister publication FundFire reports.

Next year, the brokerage will let advisors keep full production credit at grid for accounts with more than $100,000 offloaded to UBS’s Wealth Advice Center, according to the publication. But they’ll only receive 30% at grid for households with less than $100,000, FundFire writes. The payout grid, meanwhile, will remain unchanged in 2018, with a top rate of 50%, according to the publication.

UBS is also making changes to advisor compensation in light of the Department of Labor’s fiduciary rule, which purports to force retirement account advisors to put clients’ interests first and went into partial effect in June. The brokerage will stop offering loans as part of its payout program and will no longer let advisors receive production credits for their own individual retirement accounts, FundFire writes.

Meanwhile, UBS is also using a “placeholder strategy” on paying advisors for retirement account assets, Andy Tasnady, head of compensation consultancy Tasnady & Associates, tells FundFire. Next year, an advisor’s compensation on IRAs will be derived from the trailing 12 months that ended in September this year, FundFire writes. Tasnady tells the publication this approach may change as the fate of the rule becomes clearer.

(Getty)

Currently, the DOL plans to postpone the final implementation of the rule, originally scheduled for January, by 18 months, and has relaxed some of its provisions already.

Other brokerages may forego overhauling compensation plans until they learn more about the final version of the DOL rule or about a possible best-interest standard from the SEC, Tasnady tells FundFire. A House of Representatives panel recently approved a bill to hand over broker standard enforcement to the SEC and Finra and effectively repeal the DOL’s fiduciary rule.

By Alex Padalka
  • To read the FundFire article cited in this story, click here if you have a paid subscription.