UBS Lowers Some Advisor Payouts

/contrib/content/uploads/sites/415/2023/10/UBS_Sign_HQ_BB_640x640.jpg

UBS is making a series of advisor compensation changes in 2025 aimed at supporting U.S. strategic growth and profitability goals.

Overall production bands will remain unchanged, and the related payout grid rates are likewise either to remain unchanged or to fall 0.5%. Production levels below $750,000 will see a bigger change, with a drop of between 2% and 4%.

The firm is also introducing a three-pronged growth incentive to help high-performing advisors offset core grid payout reductions. Advisors will be eligible for a maximum cash incentive award of $1 million based on three criteria that can be achieved independently of one another, determined based on net new money growth rate, the number of qualified new relationships with more than $1 million in assets, and return on asset growth.

Further, the plan enhances rewards for connecting clients to the firm’s banking capabilities. Starting in July, UBS will simplify the current calculation of production credits and pay on cash management products, and it will increase the flat payout for credit lines from 11.25% to 15%.

The last big change is the removal of the combined team payout grid, which was introduced in 2017 and has proved to be an industry outlier — such that removing it brings UBS more in line with standard industry compensation practices.

“This plan aligns advisor compensation with our strategic growth and profitability goals in the U.S., with our belief that advisors should be rewarded for growth and longevity and with our commitment to offering one of the industry’s most competitive packages,” a UBS spokesperson said in a statement shared with ThinkAdvisor.

Growth and Profitability Goals

As Bloomberg reported, UBS CEO Sergio Ermotti is determined to expand the firm's reach in the United States, including through the potential acquisition of an established wealth management business.

UBS' U.S.-based financial advisors are not directly bound to the bank, Bloomberg explained. The Swiss firm’s network spans more than 6,000 advisors in the Americas, far fewer than rival Morgan Stanley, which announced its own 2025 compensation strategy in October.

"We have the cost base of a much larger organization in the U.S. but we don't have the capabilities yet that allow us to fully leverage our global franchise," Ermotti said earlier this year.