For as long as advisor recruiting has existed (lets call it 40 years) the annual winners of the arms race have carried one specific thing into battle – the biggest bazooka. Yes, the firm or firms that offer the biggest deals generally win recruiting wars and larger team face-offs. It has been this way for literal decades.
In the past six months one firm seems to have cracked the code. UBS has taken decades of ‘highest bidder’ conventional thinking and turned it inside out and upside down. Instead of offering a best-on-the-street deal that surpasses its rivals, UBS has decided that the architecture of a competitive deal is really what matters.
Guess what, they’re right.
Over the past six months UBS as outpaced its recruiting rivals in raw AUM transfer numbers by a larger margin – and we have it on good authority that the firm is set to make several announcements that will further distance itself from the pack. Over the course of the next 6-9 months UBS will announce massive team recruiting wins that will make industry eyes bulge and leave their rivals scrambling.
But why? What is the secret sauce here?
After a two year hiatus from the recruiting scene UBS made a strategic shift in how it goes after teams at Merrill, Morgan Stanley, Wells Fargo, First Republic and others. Sure, they still offer a 300% deal, but that pales in comparison to Morgan Stanley at 325%, Ameriprise at 340%, Wells Fargo at 340%, and First Republic that climbs beyond 400%. Huge ’starting’ numbers from the aforementioned firms can balloon from there dwarfing what UBS has equipped their field management with during their current run.
And when we say ‘balloon’ we generally are talking about upfront payments. Morgan Stanley, Wells Fargo and even First Republic are very comfortable taking upfront checks right up against the 200% threshold. We haven’t seen anything near that from UBS.
So again we ask, what is UBS doing to outfox its recruiting rivals. To state it simply they turned over the apple cart of decades of conventional wisdom with respect to recruiting and stripped out the ‘guts’ of their recruiting deal.
For traditional HNW and UHNW coming from rivals, UBS has removed all hurdles. No asset transfer hurdle, no revenue hurdles. Zero. Nada. Zip. The UBS recruiting deal, should a Merrill PBIG team hit the proverbial bid is fully guaranteed. Yes, guaranteed. No claw backs, no games, no lofty ‘150% of AUM and Revenue in Year 5’ nonsense. They’ve stripped all of it out.
What they’ve created is the recruiting equivalent of the beauty and elegance of the ‘little black dress’. No frills, no drama, no running around with your hair on fire in your transition. Just come to UBS and do the business you’ve always done.
And here is the ultimate catch – it works. Teams are transferring and moving most if not all of their assets in 90-120 days. Done and done. The firms is satisfied, clients are satisfied (no under the surface vibe of ‘we have to start generating revenue right away or we will miss our first hurdle’) and the advisor/team is comfortable and happy with the process.
**And a note – UBS also offers the largest retirement package in the industry at 260% of revenue. So teams in their 50’s are looking at a fully guaranteed deal of 300% with a fully guaranteed retirement deal of 260%. A little back of the napkin math and they are staring at 560% with no revenue or asset hurdles of any kind.
So their is your answer to the question poses above. UBS is winning the recruiting wars by playing a different game altogether. The data and leadership at UBS decided in concert that HNW and UHNW teams from the likes of Merrill and Morgan Stanley bring nearly all of their assets. Time and time again, their assets transfer. So why add drama with hurdles and deal negotiation that can go on forever??
UBS is winning based on the simplification of the process and respecting teams for who they are and have been for decades. The numbers prove that UBS has cracked the code.
