UBS Cuts Rookie Brokers, Raising Questions About F

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Sep 24, 2009 9:42 pm

http://www.onwallstreet.com/news/ubs-cuts-rookie-brokers-2664034-1.html



UBS Cuts Rookie Brokers, Raising Questions About Firm’s Next Move

By Helen Kearney

September 23, 2009

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The decision by UBS to cut rookie brokers has raised questions in the industry about their wealth management strategy in the United States.



UBS intends to layoff around 180 junior advisors this week, according to sources close to the firm. The cuts will affect advisors who are new to the field or recently completed advisor training at the firm.



This follows a major recruiting push at the end of last year, when the firm reportedly offered deals of up 260% and attracted 153 new advisors, only to see that turnaround in the second quarter of this year, when a net 821 advisors left the firm, along with $5.5 billion in client assets.



A UBS spokesperson declined to comment on the reports.



Mindy Diamond, a New York-based industry recruiter, says this development is not only bad for the trainee advisors, it also sends a negative message to the more experienced, high-producing teams. “The fact they’re cutting the next generation, the advisors who could represent the succession plan for these (experienced) teams, says they’re in major cost cutting mode and things are getting worse,” she adds.



It also adds to the uncertainty surrounding the firm’s next possible action, Diamond says. There’s been speculation that the firm is waiting for Robert J. McCann, the former head of global wealth management at Merrill Lynch, to come on board to get the division ready to sell to private equity, or another firm, she says. “I had an advisor tell me this morning that UBS is radioactive right now. Even if they offered a 500% (recruiting) deal it would be hard for an advisor to justify a move to UBS to their clients,” Diamond says. [McCann is reportedly trying to settle his lawsuit with Bank of America, which took over Merrill. The dispute centers on a non-compete clause that blocks McCann from working for a rival firm for a 12-month period.]



Alois Pirker, research director at Boston-based consultancy Aite Group, says actions by big firms to cut trainees poses a problem for the future of the industry. “The average age of financial advisors is well into the fifties, and there’s a lack of new folks to fill the gaps,” he says. He also sees the move as a cost-cutting measure. “Firms can spend a lot of money to train advisors only to see them jump to another firm,” he says.



The decision to cut these lower-producing brokers is also in line with comments made by Jamie Price, head of the wealth management advisor group at UBS Americas, in an interview in the upcoming October issue of On Wall Street. He said the Americas division intended to differentiate itself from the new “mega-firms” on the Street and focus on high-net-worth clients. “The $1 million to $10 million range is a large asset opportunity,” he said in the interview. “In every market we operate in, an advisor has a significant opportunity to operate in that range,” he said.



Price also said this shift in focus also spurred the sale of 55 smaller market branches to St. Louis-based Stifel Nicolaus earlier this year, and aligns the Americas division with UBS’ global wealth management strategy.

Sep 24, 2009 10:26 pm

This is a firm in a total state of flux. Current inept management knows they are are on the way out. The moral could not be any worse.

If this guy from Mer comes I predict all the top people (including Ron Obama socialist Wolf)are gone.   The new guy will have a chance to really be a hero since he will be starting with people so pissed off.



Jamie Price is such a total clueless dumbass.



Price:



“The $1 million to $10 million range is a large asset opportunity for us”



How stupid.   



Oh OK Jamie,

ohhhhhhhhhhhhhhh i get it



You want me to TRY to get 1mm to 10mm dollar accounts now?   

How incredible, I wish someone would have told me this sooner.

Just a month ago I had a chance to get a 9mm dollar account but was not really interested.   

NOW I know. Focus on BIGGER accounts.   Man, what incredible insight



Thank you Jamie



Sep 25, 2009 8:53 am

Why anyone looking to write an article on firms would quote a recruiter is beyond me.  Mindy Diamond recruits primarily for MSSB.  Of course she is going to promote her own agenda.  Recruiters need and try to cause turmoil to get people moving.  That is how they get paid. 

 
The real story ought to be why MER/BAC fired 1500 trainees just 8 months ago and now they are hiring like crazy.  They are in a headcount race with MSSB and are hiring just to "make points" with the analysts.
Sep 25, 2009 9:17 am

Before the April purge, Martin H was on the box telling everyone that it was just as easy to bring in a 100k account as it is to bring in a 10mm account.  You should have seen the eyes roll.  

Sep 25, 2009 3:44 pm
exUBS:




Before the April purge, Martin H was on the box telling everyone that it was just as easy to bring in a 100k account as it is to bring in a 10mm account. You should have seen the eyes roll.







Are you serious?   Ill just go get the 10mm accounts then. My assets are really gonna grow now.   These guys are amazing

Sep 25, 2009 4:26 pm

"when a net 821 advisors left the firm, along with $5.5 billion in client assets. "



I'm just a lowly Jones Broker, so feel free to question my intelligence. $5.5B divided by 821 advisors means they lost on average $6.7 Million in asets per advisor. It sounds to me like they spun off their bottom tier of brokers.

Sep 25, 2009 5:06 pm
TT:

Why anyone looking to write an article on firms would quote a recruiter is beyond me.  Mindy Diamond recruits primarily for MSSB.  Of course she is going to promote her own agenda.  Recruiters need and try to cause turmoil to get people moving.  That is how they get paid. 

 
The real story ought to be why MER/BAC fired 1500 trainees just 8 months ago and now they are hiring like crazy.  They are in a headcount race with MSSB and are hiring just to "make points" with the analysts.




Well Done!!

This drives me crazy too. Mindy Diamond is such a joke. she is 100% captive recruiter for Morgan and has been for years - she used to go to all the branch manager meetings. i bet she is on salary for MS!

wouldnt go for 500%???? is she for real? UBS recruited 1,000K Q1 monster producers with a 260% deal in 1st Q this year. Merrill is doing it right now with a 300% deal.

Money talks mindys BS walks....

Sep 25, 2009 5:10 pm
Shania Twain:

This is a firm in a total state of flux. Current inept management knows they are are on the way out. The moral could not be any worse.

If this guy from Mer comes I predict all the top people (including Ron Obama socialist Wolf)are gone.   The new guy will have a chance to really be a hero since he will be starting with people so pissed off.



Jamie Price is such a total clueless dumbass.



Price:



“The $1 million to $10 million range is a large asset opportunity for us”



How stupid.   



Oh OK Jamie,

ohhhhhhhhhhhhhhh i get it



You want me to TRY to get 1mm to 10mm dollar accounts now?   

How incredible, I wish someone would have told me this sooner.

Just a month ago I had a chance to get a 9mm dollar account but was not really interested.   

NOW I know. Focus on BIGGER accounts.   Man, what incredible insight



Thank you Jamie





You guys are on a roll today!!

great post!!

you should hear what Price says on the conf calls for BOM's only. The guys Ivory tower is so high and out of touch with reality its sick....

Sep 25, 2009 7:31 pm
ABOM:
TT:

Why anyone looking to write an article on firms would quote a recruiter is beyond me.  Mindy Diamond recruits primarily for MSSB.  Of course she is going to promote her own agenda.  Recruiters need and try to cause turmoil to get people moving.  That is how they get paid. 

 
The real story ought to be why MER/BAC fired 1500 trainees just 8 months ago and now they are hiring like crazy.  They are in a headcount race with MSSB and are hiring just to "make points" with the analysts.




Well Done!!

This drives me crazy too. Mindy Diamond is such a joke. she is 100% captive recruiter for Morgan and has been for years - she used to go to all the branch manager meetings. i bet she is on salary for MS!

wouldnt go for 500%???? is she for real? UBS recruited 1,000K Q1 monster producers with a 260% deal in 1st Q this year. Merrill is doing it right now with a 300% deal.

Money talks mindys BS walks....



Thanks!  It is akin to quoting a drug dealer about the country's war on drugs.  Uh, agenda maybe?
Sep 25, 2009 10:11 pm

Today we get an email from Ron Wolf with a link to Obama's speech on financial regulations. What is a socialist liberal jerk-off like this running a major US brokerage?   Listen Ron, why dont you spend a bit more time fixing the worst run brokerage firm on the street instead of being on your knees with obama and his other pussy geek anti-business anti-freemarket wealth destroying losers?   What the hell is it that you do at UBS anyway?   



Hofsta, wolf and price. The three stooges.



That really pisses me off that SOB sending us Obama propaganda. If the Swiss bring in that guy from MER I really hope they fire this Wolf jerk.

The guy is such a pussy.   They are at the bottom of the list in everything because of his great leadership.

He is on Obamas close advisor team and obama still comes and tatoos UBS on that tax case. Great work Ron you loser. You cant even suck up and make it pay off you loser.

Sep 25, 2009 10:59 pm
Incredible Hulk:

"when a net 821 advisors left the firm, along with $5.5 billion in client assets. "

I'm just a lowly Jones Broker, so feel free to question my intelligence. $5.5B divided by 821 advisors means they lost on average $6.7 Million in asets per advisor. It sounds to me like they spun off their bottom tier of brokers.

 
 
I disagree - respectfully, and know many top producing brokers who have left UBS, but it's not because of your intellect, it's the flat file way you are looking at it. The 5.5 bil don't reprsent the whole books at risk...it represents 1 quarter.  The 150 brokers they brought in on average had 30 million dollar books before the market went of the cliff. Many jacked up their production by dropping annuity tickets before they left to sweeten their deal coming into UBS and they did it prior to the worst shocks in the market since they were negotiating before that. They were then trying to MOVE their books as people were screaming to liquidate and panicking about everything.  Most of them are struggling to bring their books over and people aren't moving.
 
So net - 150 advisors coming in with 30 million dollar books (assuming the brought their whole books rather than giving a factor of say .50 or .30) would be bringing on board 4.5 bil in assets.  This article indicates it turned around and they lost 821, Knowing some of them, I'll share that most of them are leaving with between 25mil & 100 mil books even at the market lows with 5.5 bil assets in exiting IN A QUARTER.  (Again, assuming whole books move) that number annualizes to 22 bil.  They paid 2.6 in a declining market with the bad news not built in and stopped recruiting in November of 2008, so the 150 were tying to move declining assets, while the 821 who moved in early 2009 at market bottoms with significantly deflated assets that were climbing, in some areas steadily, over the past few months are moving reflating assets with them. Ouch. 
 
 
Again, not factoring percentages of books moving in, or moving out since the numbers I see are varying that could represent a 17.5 bill net asset loss and a 175 mil revenue drop. 
 So, the management team has to be trying to factor revenues with an average account decline due to market of let's say 20%, huge amounts of unbillable cash on the sidelines, and exiting assets. Those are all moving targets, but a prudent management team would be looking at some pretty dire looking numbers.
 
At least this is how I see it.
Kicking....
 
Sep 25, 2009 11:22 pm

You should change the first letter in your tag line from K to L. This has nothing to do with what you are posting, but it has everything to do with how annoying and queer that tag line is.  And also signing with Kicking..... when your screen name is Takingnames. What the hell is that ?

Sep 26, 2009 1:11 am

You cannot call something annoying and queer if you work in a bank..

Sep 26, 2009 8:10 am
Squash1:

You cannot call something annoying and queer if you work in a bank..







he has a point

Sep 26, 2009 8:12 am

wait, I work for a bank too.

Sep 26, 2009 9:50 am
ABOM:
Shania Twain:

This is a firm in a total state of flux. Current inept management knows they are are on the way out. The moral could not be any worse.
If this guy from Mer comes I predict all the top people (including Ron Obama socialist Wolf)are gone.   The new guy will have a chance to really be a hero since he will be starting with people so pissed off.

Jamie Price is such a total clueless dumbass.

Price:

“The $1 million to $10 million range is a large asset opportunity for us”

How stupid.   

Oh OK Jamie,
ohhhhhhhhhhhhhhh i get it

You want me to TRY to get 1mm to 10mm dollar accounts now?   
How incredible, I wish someone would have told me this sooner.
Just a month ago I had a chance to get a 9mm dollar account but was not really interested.   
NOW I know. Focus on BIGGER accounts.   Man, what incredible insight

Thank you Jamie



You guys are on a roll today!!

great post!!

you should hear what Price says on the conf calls for BOM's only. The guys Ivory tower is so high and out of touch with reality its sick....

 
I attended a town hall meeting which was hosted by Jamie at the height of the crisis---very arrogant. Also takes an entourage of staff with him when he travels. He is full of his self-importance. I agree he is out of touch. I could tell he got angry when members of the audience asked him some tough and probing questions about UBS's position & strength. Again, the arrogance-- he presented himself as" how dare you question me kind of attitude"
Sep 26, 2009 10:17 am
betsyross:

[quote=ABOM] [quote=Shania Twain]

I attended a town hall meeting which was hosted by Jamie at the height of the crisis---very arrogant. Also takes an entourage of staff with him when he travels. He is full of his self-importance. I agree he is out of touch. I could tell he got angry when members of the audience asked him some tough and probing questions about UBS's position & strength. Again, the arrogance-- he presented himself as" how dare you question me kind of attitude"







Guy is a total loser. He was a total loser when he ran PRU fin in the ground also.



Instead of getting at the real issues of horrible operations, total lack of leadership, poor moral, lack of accountability etc etc. They come up with this



small accounts dont generate as much gross

small account cost more per gross

large accounts are more profitable.....



thus



Lets call ourselves a large account company-problem solved. Excuse me Ultra High net worth (give me a F'ing break). OK Thats it. Now lets fire all small accounts and new FA's and tell everyone to get "big, big accounts"



Its their plan to try to save their ass.. The REAL problem is their inept leadership.   

Sep 26, 2009 11:39 am
Squash1:

You cannot call something annoying and queer if you work in a bank..

 
You cannot rip on a bank when you shine shoes and knobs, and get donuts for a team.
Sep 27, 2009 10:22 pm
Squash1:

You cannot call something annoying and queer if you work in a bank..



I think a lot of borkers technically work for "banks" now...

Sep 27, 2009 10:28 pm
Ron 14:
Squash1:

You cannot call something annoying and queer if you work in a bank..



You cannot rip on a bank when you shine shoes and knobs, and get donuts for a team.





I don't. Run my own office. But I agree with your statement for those who do.