2010 Grid Changes

or Register to post new content in the forum

16 RepliesJump to last post

 

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Sep 11, 2009 3:57 pm

Hearing the following:  overview... if you're Q 3 or 4... more pain.....

ML/BofA-  grid cuts in Q 3 & 4... bottom side of grid 20%

MSSB-  grid cuts for SB side in Q 3 & 4, SB no major impact, MS, slight drop in Q 3 & 4, but already below legacy SB FAs

* UBS- grid cuts for Tiers 3 & 4... severe in 4 I'm told

* WFA- ???


Confirm, deny, argue, add... the FACTS are to be known within weeks or earlier as 2010 is set up for all the big wires.

** Regionals.. we know you're happy, grids are SUPER DUPER and life is good.. thanks in advance.

*** indy and RIA guys.. we know you control your destiny and get high payouts... I'm looking more for an apples to apples comparo here.. thanks and keep doing those mega numbers!!

Sep 11, 2009 4:02 pm

I sense some mocking..from an outsiders view..



What production level is q3 or q4?

Sep 11, 2009 5:09 pm

I am over at BoA/Merrill. Currently on the BoA platform. Just spoke to my manager today, and he said that we are going to the Merrill grid Jan, and will have virtually identical comp plans. In addition, he said from what he hears that the merrill comp plan/grid is not changing and will be the same for 2010.

With that being said, does anyone know what the current payout is on the ML grid? 500K level, 600k level, 700K level. If someone could give me an idea, it would be greatly appreciated. Thanks!
Sep 11, 2009 7:18 pm

400-500k 40%

Sep 11, 2009 7:24 pm

Dire,



That's funny, I remember that same convesation last year when B of A said on Jan 1 (of this year), we were moving to the ML comp.



Good Luck!

Sep 12, 2009 2:49 pm

At this point...may as well go down with the ship!!  What a disaster! Should be interesting to see how this all turns out.

Sep 12, 2009 2:57 pm

So just to clarify on a previous post-- a 500K producer on the ML grid is at 40%?            That seems like a decent payout

at 600K does it go higher?

Any feedback would be appreciated... Thanks again
Sep 13, 2009 2:32 am

Fee-based and insurance at UBS pay 42% at $400K T12.  At $600K, it goes higher, but don't remember exact amount.

 
LA
Sep 13, 2009 1:18 pm

MSSB is the big question mark. SB penalizes more then MS on the $400k and below area, but SB pays more on the $600k or higher. Based on Gorman's belief, he'll side with Johnston on this one and adopt more of SB's comp plan. I do not believe the $300k - $400k level will be penalized as bad as SB's 2009 comp, but the firm knows it needs to find a way to pay it's $1MM+ producers more and the only way to do that is take from the lower end or charge clients more. The current environment won't support charging clients more money, so my guess is it's coming from the low end. The non-complex managers for MSSB found out last week their income potential is being severely cut. I would guess the same will be for UBS and MER. Don't forget the other ways they lower your payout; small trades, small households, ticket charges, and zero payout on money markets. I would bet the new comp plans will include some of those or changes to what constitutes a small trade or household.



I was a complex manager at MS, so I know they keep this information from the management level until the very end. We're too close to the troops and they know we'll tell them before we're supposed to. Chances are your manager won't know anything until very shortly before you know.

Sep 13, 2009 2:04 pm
Lew Ashby:

Fee-based and insurance at UBS pay 42% at $400K T12.  At $600K, it goes higher, but don't remember exact amount.

 
LA




 
 
You forget to factor in the HUGE haircut UBS takes off the top from insurance products before the 42% is calculated. The haircut can be as much as 2.5% off the top. I recently went indy, and was shocked how much UBS was going to keep as a hair cut.
 
Let's say you get 6% upfront normally doing a VA. That same product is capped at UBS for 4.5%....so UBS is taking a 1.5% haircut before your split of 42%. So they say your getting 42%, but what is it really?
 
Let's pretend the VA is for $100,000. You normally would get 6% or $6,000 commission if you were indy. At UBS, the post haircut amount is $4,500. You would then receive 42% of $4,500 which equals $1,890 (only if your t12 is $400 or greater). So based on this example, for doing a VA that normally pays 6% commission....your REAL cut is only 1.89%.
 
At UBS, doing a 6% up-front commission VA nets you only 1.89%; while UBS keeps 4.11%... talk about SHOCKING!
 
 
 
 
 
 
 
Sep 13, 2009 3:13 pm
bluetoon:
Lew Ashby:

Fee-based and insurance at UBS pay 42% at $400K T12. At $600K, it goes higher, but don't remember exact amount.



LA












You forget to factor in the HUGE haircut UBS takes off the top from insurance products before the 42% is calculated. The haircut can be as much as 2.5% off the top. I recently went indy, and was shocked how much UBS was going to keep as a hair cut.



Let's say you get 6% upfront normally doing a VA. That same product is capped at UBS for 4.5%....so UBS is taking a 1.5% haircut before your split of 42%. So they say your getting 42%, but what is it really?



Let's pretend the VA is for $100,000. You normally would get 6% or $6,000 commission if you were indy. At UBS, the post haircut amount is $4,500. You would then receive 42% of $4,500 which equals $1,890 (only if your t12 is $400 or greater). So based on this example, for doing a VA that normally pays 6% commission....your REAL cut is only 1.89%.



At UBS, doing a 6% up-front commission VA nets you only 1.89%; while UBS keeps 4.11%... talk about SHOCKING!













So UBS is really paying 31% for insurance at 400K?

Sep 13, 2009 5:57 pm
Stifel Nation:

MSSB is the big question mark. SB penalizes more then MS on the $400k and below area, but SB pays more on the $600k or higher. Based on Gorman's belief, he'll side with Johnston on this one and adopt more of SB's comp plan. I do not believe the $300k - $400k level will be penalized as bad as SB's 2009 comp, but the firm knows it needs to find a way to pay it's $1MM+ producers more and the only way to do that is take from the lower end or charge clients more. The current environment won't support charging clients more money, so my guess is it's coming from the low end. The non-complex managers for MSSB found out last week their income potential is being severely cut. I would guess the same will be for UBS and MER. Don't forget the other ways they lower your payout; small trades, small households, ticket charges, and zero payout on money markets. I would bet the new comp plans will include some of those or changes to what constitutes a small trade or household.



I was a complex manager at MS, so I know they keep this information from the management level until the very end. We're too close to the troops and they know we'll tell them before we're supposed to. Chances are your manager won't know anything until very shortly before you know.



SN your comments are dead on. I was a producing manager at SB till earlier this year and i've heard about the changes they announced last week - i dont know about the comp changes, but i know they are going to complexing. A lot of producing managers and some non producers got taken out. And if you didnt get a complex, your compensation is being cut big time.
I dont see the new MSSB making life easier for any FA doing less than $400

Sep 13, 2009 6:13 pm

Not correct re: annuity payouts @ UBS. They are 6%  of the premium @ Grid plus 3% = 49%.

They have their issues...this is not one of them.
Sep 13, 2009 6:30 pm

UBS takes a haircut from doing VAs with Jackson or MetLife. I was about to do one of each AT UBS and the commission from the insurance company was significantly different from UBS vs Indy road. A haircut is a haircut.  Both wholesalers even said this is the norm.

Sep 13, 2009 8:25 pm

Yes, their is a haircut. The GDC  I believe is 7%. UBS pays 6% on ALL vendors from what I have seen, not 4.5 as the other responses have indicated. Then the production grid gives grid plus 3 bps. ML and some others get the same GDC of 7% then payout 4.5%, then it actually pays the advisor 35% of the gross (no matter what your production is-this is insane thievery!!), a significant difference, and yes the indies get the best deal of 7% GDC and 90% net. 

Sep 14, 2009 1:51 am

I remember a few years ago when SB made their major comp changes that upset so many brokers.  Gorman had a conference call about our compensation at MS and specifically told us that he felt SB made a huge mistake.

 
I'm anxious to see what happens here.  I bet everyone under 300k gets hit hard and the 1M+ get everything they want.  Seems to be a trend at MS.