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UBS Increased Broker Pay by 14% in 2017

March 12, 2018

UBS Financial Services dropped the amount of forgivable loans it gave out as signing bonuses in 2017 but boosted advisor pay, InvestmentNews writes.

The firm doled out $754 million in signing bonuses last year, a 7% decrease from $808 million it spent the year prior, according to the annual report from UBS, the parent company, cited by the publication.

Advisor pay at UBS Wealth Management, grew to $3.3 billion 2017, a 13.8% increase over the $2.9 billion the company paid out in 2016, according to the report. The increase in salaries and other personnel costs, meanwhile, were due to a boost in the number of staff, but the company was also able to offset some of the increases “by lower expenses for compensation commitments with recruited financial advisers,” InvestmentNews reports.

The company attributed the increase in advisor compensation to “higher compensable revenues as well as changes we announced in 2016 to our financial adviser compensation model," according to the publication. UBS drastically cut its recruitment targets in June 2016 and announced that it would focus its efforts on holding on to its existing advisors. UBS also made a move last year to make it harder for its advisors to leave by dropping out of the Protocol for Broker Recruiting, which allows departing advisors to take along some client data without the threat of a lawsuit. The company followed Morgan Stanley’s withdrawal from the protocol a month earlier.

UBS’ 2017 annual report, unlike seven earlier annual reports, doesn’t say how many advisors UBS Wealth Management Americas recruited through the year, AdvisorHub notes.

Recruiters tell AdvisorHub the omission probably reflects UBS’ "reluctance to emphasize the dramatic reduction in hiring in its U.S. salesforce.” In 2016, the company hired 178 advisors, a 54% drop from the year prior, when it recruited 389 advisors.

“They have experienced a lot of attrition like the other wirehouses, and they have not been replacing that attrition,” one headhunter tells AdvisorHub.

By Alex Padalka
  • To read the InvestmentNews article cited in this story, click here.
  • To read the AdvisorHub article cited in this story, click here.