UBS rookie program

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Apr 11, 2006 2:39 pm

Any one with any info on the Developing financial advisor program at UBS? I am a rookie at Piper Jaffray in my first quarter of production and with the annoucement today I am wondering what to expect

Apr 11, 2006 2:41 pm

Expect a lot of FA’s to leave Piper…

Apr 15, 2006 12:29 pm

[quote=FreedomLvr]Expect a lot of FA's to leave Piper...[/quote]

Yeah, this will be a shift in culture for those of you who choose to stay, but much bigger for Piper's big producers.

My guess is that there will be an unprecedented series of moves from Piper to Dain, Oppenheimer - all of the other little firms. The handful of wealth managers doing 700k+ will choose to take a big check upfront and make a move to SB, MS, ML or Wachovia, because they will never have as good a chance in the chaos of this transition. Once this becomes apparent, UBS will be less serious and more cost-conscious about converting clients. What they should do is hold expensive parties in their major markets for Piper clients and make it easy for you to sell to your clients the story that "we've been acquired by a Swiss bank with a culture of service and a global market outlook," but if all of the decent-sized producers bolt (and I think they will), then the merger will be viewed as a failure that will require cost controls to be put in place. UBS has a track record of over-spending and then back-tracking. The pendulum swings widely in Zurich.

UBS is, on average, cheaper, more compliance-oriented, less open in terms of business model. UBS sees ML's success and they are seeking to replicate it - albeit somewhat more cheaply as Zurich has grown increasingly frustrated with the poor returns on their investment.

The financial planning specialist support was much better at Piper (but somewhat lower quality) than UBS. UBS people will only be interested in helping you out with $5mill+ clients and prospects, but they will be more impressive.

What you will get at UBS is a culture that is more fee-based, bigger producers and a name that is better known in major markets.

I would also assume that the vast majority of Piper managers will be let go and very little of the operations staff will be absorbed. There is too much redundancy. No vestige of Piper's culture should be expected to remain.

Because of Piper's low average production, those that stay will be treated probably a little worse than they would expect because of the view that Piper brokers need to be brought up to UBS standards.

All of this analysis is somewhat biased, as I have a fairly low opinion of UBS and I had a very positive opinion of Piper's culture and the efforts they had made to transform themselves into a wealth management firm. For some reason, they just couldn't do it - part of it was probably cultural inertia among their brokers and public perception in their primary markets. The success of the investment bank vs. retail didn't help and the crazy-good offer from UBS was probably the final nail in the coffin. My guess is that they will return to the space in a few years, but with a smaller force that is UHNW focussed - recruiting only experienced brokers with above-average production and corporate executives for clients. Similar to Lehman in the 90s, this will probably grow out of the Corporate and Venture Services Group, which is a separate unit and is not going to be sold along with retail.

If you are in a market where Dain or some other smaller firm is well-known and highly regarded and your business is more investment, rather than wealth management-oriented, then I would consider moving to one of those firms, taking a small check and a better office (if that's an option for you) and moving NOW. (If you are really kicking ass in the gross department, then look to moving to a Lehman or Bear, if that is an option in your home city.) Your clients will understand if you do it now and it will be just as hard to convert them to UBS as it will be to move to a new firm. You will never have as good an opportunity to leave as you will in the 3rd quarter of this year.

If you are trying to be a wealth manager, I would look to move to either SB or ML (if your production and assets make that an option), take a small check and take advantage of this opportunity to restart with a small number of clients.

If you are sucking in the gross and assets department, but you love this business, then you've won a lottery. The management at your new office will easily buy the story that you weren't well managed at the last firm and the brand stank, so that's why your numbers are terrible and you will get a new lease on life. You can certainly build a great business at UBS, it's just not a terrific place to work.

Unfortunately, if you were drawn to Piper's culture, willingness to spend money, excellent marketing and management, I am sorry to say that Piper was the last of it's kind - a small retail firm with a kick-ass middle-markets investment bank. Even if you move to Dain or Oppenheimer to stay small, you should expect that they will be similarly acquired in the coming years.

Retail is a dreadful business from the perspective of the investment bankers who run these firms. Only financial services firms with the terrible margins of consumer banks want to get into this space. It will be some time until you will see the reemergence of the 500-broker retail operation (if ever). What made these firms so great to work for is what makes them so terrible to own.