Tag Archive for: UBS

The Wells Fargo Wagon – Now a Ferrari

Wells has just planted a monster flag in Manhattan with their new modern offices in Hudson Yards, cementing its foothold in the PWM space by acquiring one of the largest teams in the nation from UBS PWM.  Founded by brothers Andrew and Todd Perry, a 14-member team is said to be generating $20M on $5B in assets under management. Andrew’s 35-year career originally began at Salomon Brothers before co-founding the Perry Group at Merrill Lynch in 1998 with Todd. In 2002 Andrew and Todd became Managing Directors at Deutsche Bank before then joining UBS in 2008.

This is not the Wells most advisors think they believe it is. Damaged severely by the 2008 scandal and subsequently losing almost 4,000 advisors, the firm has taken well over a decade to completely revamp senior leadership, almost every product group, down to most every manager in the field. Wells is an undervalued story and if you look underneath the hood you may realize this is a firm that will allow advisors’ businesses to flourish. 

Barry Sommers, former head of JPM Private Bank and Securities, and now the new Head of Wealth Management at Wells has totally streamlined the many disparate businesses, including getting rid of all the salary/bonus private bankers and allowing traditional private client advisors to help manage and grow the massive relationships of the private bank, the commercial bank, and the investment bank. 

This is in direct opposite of how the JPMorgan Private Bank operates with their JPM Securities division and also the direct opposite of what is now happening at BOA with their Merrill division. 

This is a conscious decision from top leadership to be either a Private Bank or Brokerage Firm. Seemingly, Wells is copying First Republic Bank where the Commercial lending book of clients was handed to financial advisors to build upon these relationships and grow massive books. Wells’ balance sheet dwarfs FRB’s, which dominates the jumbo mortgage market with about 70% market share in CA and almost 40% nationally. Apparently, Wells pays an average of 1% recurring rev for almost every type of loan an advisor places which is an unheard-of commission.

Most big firms have PWM divisions like ML PBIG, MS PWM, and UBS PWM.  The architect behind ML PBIG over 30 years ago was a legend in the business, named Jim Hayes, who created the identical division within Wells PWM Platform. Those early pioneer advisors who join this boutique PWM within Wells stand to reap huge referrals.  They’re essentially looking to direct more UHNW referrals to their incentivized PWM Financial Advisors and dramatically increase their investment banking and commercial banking referrals from $9 B to $25B a year – no inflation needed here.  

The new CEO, Charlie Scharf, has  solidified executive leadership who is a Jamie Dimon protégé and proven leader at VISA and BNY Mellon, who is a Board member of Microsoft and importantly, whose father was a financial advisor. This new leadership team demonstrates a new culture from the very top that positively flows all the way down the ladder all across the nation.

Trust me, this wagon isn’t slowing down, if you want to hitch on do it while the opportunity is here.

The Perry Team is the tip of the iceberg of aggressively recruiting the biggest and most top talented advisors in the country, offering  some of the largest transition packages we have ever seen in the business. A recruiter source tells us, “no firm comes close to their massive Upfronts, Backends, Deferred Matches, GRID payouts and Retirement packages. I’m astounded by the deals I’ve been able to negotiate and just shows how committed this firm is to recruiting.”

Finally, if an advisor cares to eventually transition to Independence, Wells is one the world’s largest custodians with about 50 BD’s allowing advisors a very smooth, no papering of clients, transitions with a 90%+ 1099 payouts. No firm has this offering.

The sleeping giant has woken and morphed into a recruiting powerhouse.

Merrill Concocts Feeble Recruiting Strategy (but only if you’re a bank broker)

Let’s play with a little math, shall we? In the past 90 months, Merrill Lynch has lost $230B in client assets due to advisor attrition. Yes, that’s billion with a ‘B’.In 4 1/2 years, based on publicly available data, Merrill has lost the equivalent of 230 billion dollar teams. That is incredible. It’s almost unfathomable.

Their completion at UBS, Morgan Stanley, Rockefeller, and even Stifel have feasted on Merrill lifers now for years. And the eatin’ has been good.

So what is Merrill leadership’s current response? A just rolled out to the field memo, that will compensate market managers to recruit advisors with LOS’ under 12 years that hail from the likes of banks and credit unions. Banks and credit unions. Seriously.“It is difficult to put into words the lack of brand loyalty that no longer exists at Merrill Lynch amongst the remaining advisors and teams. I’d estimate that more than half of large team movement in the industry is coming from one firm – Merrill Lynch. In my thirty years in the business as an advisor and recruiter, I’ve never seen anything like it.” – Roger Gershman, CEO of wealth management recruiting firm The Gershman Group.

Each weekend there is another announcement of a large Merrill team migrating elsewhere. It’s become the one constant in an industry that’s been booming for nearly a decade now.

The only ‘bust’ that anyone can find in this section of the financial world is the once proudest brand on the street: Merrill (formerly known as Merrill Lynch).

Another Big Team Bails; Merrill Exodus Continues As UBS Adds Another $2B To Their Private Wealth Platform

There is no more anecdotal evidence needed here. The Merrill exodus that was predicted by this author now six years ago has become, as one Merrill advisor aptly put it a few days ago “who’s left today”.

That is where Merrill finds itself. Its advisors check industry publications to see who has left the firm every day.

Not each week, or each month… but every day.

This time the transfer occurred in NYC to the tune of nearly $2B and annual revenue at more than $11M.

Led by Stephen Kincade and Alexander Fridell the team made the transition based “almost purely on culture”, said a source close to the team. Other members included on the team are Chris Kincade (Stephen’s son) and client associates Zach Kingsley, Jessica McEntee, and Elle Schiowitz.

We mentioned in this publication last week that Merrill had lost $200B in client assets in the past four years. Now make that $202B. As big as this team in NYC is, Merrill has lost 100 of them in the past 48 months. Read that again.
It’s stunning… or according to Andy Sieg “it’s seasonal.”

We expect the procession and mass migration out of Merrill to continue as the level of noise in recruiting circles is at all-time highs. The fall has historically been the most active transition period for financial advisors. It will be exceptionally so this year.

Just one more time for effect: “The uptick in advisor attrition associated with competitive recruiting is seasonal.” – Andy Sieg

Slow Leak Out Of Bernstein Picks Up Speed; Larger Advisors Migrate To Greener Pastures (mostly to UBS)

There’s been a lot said about the massive shift in private banking and ‘non-traditional’ recruiting over the past several months. Much has been written about both J. P. Morgan and Goldman Sachs teams moving UBS and to a lesser extent, Morgan Stanley.

Add Bernstein advisors to that narrative. In the past 12 months these are the names and numbers associated with transitions away from Bernstein:

Dallas $13M John Baumgarten, Cory Dowell and Chad M. Jones
– San Francisco $7.6M Robert Stoker
– New York $10M Alex Hewit/Mike Tucker
– San Deigo $7M Chis Pitzak
– Nashville Jay Degeare $12M
– Julian McGraph $4.5M

Each of those moves is of note based on the well-known reputations that each advisor had within the Bernstein ecosystem. These aren’t lower-level ‘analysts’ or VP’s. These are Managing Directors of the firm.

A note before we close out this article – UBS is in an absolute tear and is showing ZERO signs of slowing down. Zero. They’ve very effectively taken dozens of J. P. Morgan private bankers, several Goldman Sachs teams, and Bernstein teams. As we hear it, the pressure and focus on Bernstein and Goldman are about to ramp up in the second half of 2021. A pivot, or shift if you will.

It wouldn’t surprise us at all if the same amount of advisors/teams noted above came out of Bernstein in the next six months, increasing the velocity of movement out of the firm. Just expect more headlines.

The narrative and reality with regards to the Bernstein to UBS pipeline are real and worth understanding. The proof, as they say, is in the proverbial pudding.

DOMINATION! UBS Is Hammering The Recruiting Competition This Year, And It Isn’t Even Close

UBS hasn’t found the secret sauce, they’ve perfected the use of Thor’s magical hammer and are pounding away at rivals who’ve yet to figure out a way to match their efforts.

J. P. Morgan in particular is being completely bludgeoned with zero signs of the mass exodus of top talent slowing down. While a few private bankers from JPM have matriculated to Morgan Stanley, more than 90% have taken their talents directly to UBS.

Add those to the Merrill, Wells, and Morgan Stanley wins and UBS is so far out in front of its competition the race seems rigged. But it isn’t… rather it’s a well-executed recruiting strategy that may have seemed risky a year ago but has turned into absolute gold.

A two-fold ‘macro’ decision was made and has resonated in a way that has UBS up by 5X their closest competitor (Rockefeller) instated client asset transfer. As it stands today, UBS is a few bucks away from the first half of 2021 total of $60B in client assets recruited. Amazing.

Can they keep it up through the second half of the year? Not likely. But even if the pace slows, UBS could still end up with a $100B year. Unprecedented.

If you want to define recruiting domination – this is exactly what it looks like.

Private Bankers Listen Up! The Difference Between Deals Offered By UBS And Morgan Stanley

Two firms have made the biggest impact in recruiting private bankers away from J. P. Morgan, Goldman Sachs, Bank of America, and Citi. Both UBS and Morgan Stanley have decided that recruiting a different subset of teams from firms that could be called ‘non-traditional’ is worth every dime they can spare.

So what is the difference between what UBS and Morgan Stanley are offering these teams? **a quick reminder that UBS has been significantly more successful in their pursuit of private bankers by nearly 4x versus Morgan Stanley.UBS and Morgan Stanley are near equals when it comes to product, platform, and comp grid payout. The difference lies in the valuation of the business and client relationships that private bankers have built over a number of years.

Here is the money line: UBS is offering a deal based on the gross annual revenue (think ‘scorecard’ or ‘gross credits’) of a private banker or team, and Morgan Stanley is making their offer based on the net revenue (W-2).

Let’s break it down a bit. Currently, UBS will look at a gross credits annualized report for a Goldman Sachs team and put together a 250% deal on the top-line numbers. If that number is $10M, then the deal turns into a $25M deal in an instant.

Morgan Stanley (focused on the net number) will ask that same team for their W-2’s and construct a deal based on the lowest common denominator associated with the ‘trickle down’ revenue model for a Goldman Sachs team. A $10M team at Goldman will have W-2’s that will show +\- $1M. A 250% deal based on ‘net’ numbers ends up making out at $5M.UBS = $25MMorgan Stanley = $5MThe dramatic difference in those numbers makes it crystal clear why UBS is winning private banking competitive recruitment 4-1. Evaluating competing deals that are separated by 5x generally makes the decision simple.

As of today, UBS is the clear choice for private banking teams.

BREAKING: J. P. Morgan Private Bank Exodus Continues; Another $20M Team Bolts For UBS

The continued exodus of J. P. Morgan Private Bank employees isn’t showing any signs of slowing down. We’ve gone from monthly resignations of large-scale teams, to weekly at this point.

The latest team just ‘decamped’ from the Indianapolis JPM Private Bank location and the stats sound like a broken record. Information that was passed to us from inside JPM has a team with more than $20M in annual revenues and more than $6B in assets announcing their resignations to local management and signaling their intentions to join UBS once their garden leaves expire.

The team has requested to be left anonymous until their garden leaves finalize and a more formal announcement will be made. In conversations with UBS sources, the move was confirmed and the anonymity of the team was requested again. But know this, inside JPM everyone is acutely aware of the talent hitting the doors.

The larger narrative remains the same for UBS and J. P. Morgan Private Bank – it’s at once a ‘kid in a candy store’ and a bloodbath. We’ve heard from multiple other teams still in the due diligence process that chuckled at the raises offered to MDs to try and stem the tide. As the saying goes, when compared to what UBS is offering, it’s like ‘tripping over nickels.’Expect more announcements over the next 60-90 days, at which point UBS may be ‘full up’ on JPM Private Bankers.

UBS Destroying Recruiting Rivals

NEW RECORD: UBS Destroying Recruiting Rivals; Adds More Than $30B In Net New Assets Through April

UBS has taken over the high-end wealth management recruiting market and is showing no signs of letting up. Through the first four months of 2021, ending in April, UBS has added more than $30B in client assets to the firm’s US wealth management operations. Everyone else is scrambling to figure out why and attempting to play catch up.

Somewhere, deep in the bunker that is the UBS recruiting department in Weehawken, NJ, a decision was made nearly a year ago to make two strategic pivots: value private bankers in the same way they value traditional advisors and remove all the hurdles from their traditional rivals deal. An explosion occurred.

Here is a short (but nowhere near all-inclusive) list of the biggest moves to UBS through 2021:

  1. J. P. Morgan Private Bank, Dallas $10B
  2. J. P. Morgan Private Bank, Los Angeles $6.5B
  3. J. P. Morgan Private Bank, Miami $5B
  4. J. P. Morgan Private Bank, Atlanta $9B
  5. Wells Fargo Private Bank, San Diego $2B
  6. BofA Private Bank, San Francisco $2B**a little math above, that’s already more than $30B. Wow.

This recruiting run is unprecedented. Historic. Never been done before. Ever. $30B in four months? There has never been a firm that has approached that number in 6 months across the history of wealth management recruiting.

For comparison’s sake, Rockefeller is currently having a banner year in recruiting with $10B in recruited AUM. So fully an entire 2/3 behind UBS. And if recruiting chatter is any indication, expect UBS’ success to continue.

As we’ve discussed in previous articles the keys to this surge have been the aggressive move into private banking and the removal of all hurdles for teams at firms like Merrill and Morgan Stanley. Other traditional rivals like Wells Fargo and Rockefeller continue to pitch asset/revenue matrix models with hurdles year over year. Effectively, UBS’ has brought a fully guaranteed deal to market.

The response?? The numbers don’t lie – it’s historic.

UBS Makes Noise In The Bay Area; Hires $10M BofA All-Female Team Away From Private Bank

UBS continues to be on a serious recruiting roll across the country. Much of the big headlines are coming from private bank competitors like Bank of America, J. P. Morgan, and Goldman Sachs. Billions of client assets are up for grabs and UBS has significantly opened up its checkbook and is crushing the competition; winning big team after big team after big team.

Their latest win came in San Francisco as they finalized a deal with an all-female private banking team out of Bank of America. The team, nor UBS, has released annualized revenue and client asset data but a source close to the recruitment confirmed that the team brings better than $10M in revenue and more than $2B in assets with them.

The team includes Amanda Woo, Nancy Barrett, and Michelle Harvey, all joining UBS Private Wealth Management in San Francisco. The team is well known in the Bay Area as the most influential banking team at BofA and was seen as a major blow to the firm. Operationally, they will report to both PWM and Erin Borger. **A note real quickly, Borger has climbed the ranks of management at UBS over the past decade closely connected to his recruiting prowess, so his name associated with this win isn’t a surprise.

In the same way that UBS has significantly jostled the comfortable confines of the J. P. Morgan Private Bank across the country, it seems they are doing the same with Bank of America. This is now the third significant announcement of a BofA to UBS migration in 2021, and we hear that more are to come.

At what point will rivals like Morgan Stanley, Rockefeller, and others start paying up for private banking teams the way UBS has?? We don’t know as of yet, but you can bet it’s coming.

UBS And Morgan Stanley Get Aggressive; Five Reasons Why The Private Banking Model Continues To Unravel

UBS continues to have enormous success recruiting private bankers away from J.P. Morgan, Goldman Sachs, and Bank of America. And now, Morgan Stanley has thrown its hat in the ring, but this isn’t that story or article.

The focus today is the reason why private bankers have become such easy targets in today’s recruiting landscape.

There are five principal reasons that billions of client assets have migrated away from private banks in the last year, some of which you may have not even considered. Let’s deconstruct a movement that doesn’t show any signs of slowing down.

1. Depressed comp grids, or no comp grids at all! Wealth management firms are making clear and concise claims that private bankers are GROSSLY underpaid. J.P. Morgan has no comp grid whatsoever. Goldman Sachs had a grid that tops out at 30% and an annual draw (yikes). The Bernstein grid tops out at 23%. Given the difference in a 50% grid at UBS or Morgan Stanley, private bankers are being shorted in a massive way on their career and lifetime earnings.

2. Subjective compensation? Didn’t we all believe that Wall Street is the ultimate capitalistic endeavor? The term ‘eat what you kill’ originated on Wall Street. Not so much at J. P. Morgan, BofA, and Citi. Their private bankers depend on annual reviews by management focused on their own P&L handing out annual bonuses. Subjective compensation is a cultural cabal. Walk away from it.

3. Recruiting Deals have skyrocketed for Private Bankers. UBS has put together a deal that no longer considers W-2 compensation for private bankers. Show me your scorecard, or gross credits, or whatever system is used at each of these private banks and put together a monster deal. No longer are private bankers seen as secondary recruiting options, they are being heavily pursued. Private bank recruits are cashing ‘walk in the door’ checks of $5M-$40M bucks. **UBS has added guaranteed salaries for a decade on top of those checks.

4. Massive disparity in retirement compensation. Morgan Stanley, UBS, and Wells Fargo all have large bonus structures attached to advisors choosing to retire from their current firm. 200-260% of current annualized revenue. Meanwhile, Goldman Sachs will give you a multiplier on your final year W-2 compensation (seriously lol!). Private bankers are missing out on an extra $10-$15M in cash compensation as they exit the business if they remain in the private banking world. Read that again.

5. Freedom and Legacy. In the private banking world, you are forced to move and distribute relationships and accounts whenever you are told to do so. You don’t own any relationships no matter how hard you’ve worked on it. At J. P. Morgan you can bring in a $500M account, get a year-end bonus based on that ‘win’, and never get paid on it again no matter how many times the account owner calls you for advice over the next decade. At UBS, First Republic, or Morgan Stanley you get paid every month, every year, and on every transaction for as long as the account remains with your team. It’s the difference between a one-time payout of $200k and $4M over 10 years. To further explain ‘freedom and legacy – you set up the team you want, work with who you want when you want and how you want. And should you want to add your children into your business as you get closer to retirement YOU get to make that decision.

Might as well add a 6th reason why private bankers are flocking to traditional wealth management firms. It’s culture. Everything you’ve read above is a significant shift in culture. Politics are nearly fully stripped out of these organizations, and assets and revenue are king. If you do your job, bring in assets (that you get paid on in perpetuity) and take care of your clients you are hailed as a king/queen.

Have you ever felt that way at your current private bank? We doubt it. It can’t be stressed enough, now is the time to do your due diligence and consider changing the arc of your career – and we aren’t joking when we say this: it is a $100M dollar decision.