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UBS tweaks advisors' net new business award for 2020

In an effort to incentivize growth, UBS' U.S. wealth management division is consolidating its organizational structure — and tweaking the bonus for net new business in its 2020 compensation plan.

Now UBS advisors who have grown their net new business anywhere between $1 and $1 million (in new accounts, assets or lending solutions) will be eligible for a 1% award of their annual revenue, Jason Chandler, head of the U.S. wealth management division, told On Wall Street in an interview.

“This is the most generous we've made this award,” says Chandler.

Previously, advisors needed $1 million to $5 million in net new business to qualify for the reward, according to the company.

UBS is also adding a new incentive in 2020: Brokers who bring on more than $100 million in net new business will get a 6% award, he says. The payout will be capped at $250,000, according to the company.

In addition to award adjustments, a UBS memo to employees stated that said it will "increase grid band thresholds to align with today's broader business environment." UBS last changed its compensation plan in 2016, when the firm simplified and expanded its broker pay and fine-tuned its hiring strategy.

Branch managers will outline the new awards in the compensation plan for advisors at their respective branches on Tuesday, according to the memo written by Chandler and sent to the wirehouse’s U.S. wealth management business.

In response to feedback from its brokers, UBS is also building out resources to help advisors grow their practices and better service high-net-worth and ultrahigh-net-worth clients, according to the memo.

UBS plans to hire former trust and estate attorneys and new tech employees, according to Chandler, who noted the firm wants to boost advanced planning, tailored lending and philanthropy capabilities for its clients. These employees will operate out of new hubs in New York, Florida, Chicago, Dallas, San Francisco and Los Angeles.

Chandler anticipates that an organizational adjustment taking place next year will lead to faster decisionmaking and client response time.

The firm is reducing the number of wealth management divisions in the U.S. to three from six. Bill Carroll, Brad Smithy and Jennifer Povlitz will become the sole divisional directors of the new divisions, effective January 1, according to the memo. Two private wealth market heads will report to each of them, Chandler says.

In regards to the other three divisional directors, a company spokeswoman said that they are working with them to establish new roles at the organization.

The adjustments come amid changes the firm has made in recent years to narrow its recruiting efforts and shift its focus toward top-producing advisors.

“We’re very selective in who we invite to UBS,” Chandler says. “[We are looking for] advisors who are already working in teams, are highly productive, have a practice centered on wealth planning and have a demonstrated ability to grow.”

The average productivity of UBS advisors is $1.4 million, Chandler says. In 2016, the company said that revenue per advisor was slightly north of $1 million.

UBS gave out $3.1 billion in performance awards in 2018, according to the company’s latest annual report.

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