Lower-producing UBS advisers have been given six months to boost their production or face the so-called 'penalty box.'
Currently, advisers with more than eight years in the industry who generate less than $250,000 a year in fees and commissions receive a flat 20% payout. As of June this year, that production threshold will be increased to $300,000 for the 20% flat rate.
"We are encouraging all financial advisers to succeed and grow their business here at UBS. We are implementing these changes now to give advisers who fall below these metrics enough time to increase their numbers," a UBS spokesperson said.
Rich Schwarzkopf, a New York-based recruiter, said such a change may signal the firm's desire to downsize and focus on the high-end advisers. "They might want to bring it down to 5,000 advisers with everyone doing $750,000," he says.
When lower producers are forced out, Schwarzkopf adds, firms typically put a lot of effort into retaining their assets. "If a small broker has a $30 million book, that can be distributed among the bigger brokers and they like that," he says.
