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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.

UBS Makes History – Lands Biggest Recruiting Victory Ever; J.P. Morgan Private Bank Team Adds $28B AUM And $75M Annual Revenue To Swiss Firm

In a landmark move that is sure to shake the entire industry, and certainly the blurred lines between private banking and traditional wealth management – UBS just made history.

Earlier today a J. P. Morgan team of 9 left their Dallas, TX offices after resigning from the firm and announcing their intent to join UBS. The numeric details of the move are stunning: $75M in annual revenue and $28B in client assets. Wow.

Not only is this the largest deal in the history of UBS, but it’s the largest recruiting deal in the history of the industry. Read that again.

Behind the numbers are exceptionally respected and high profile (now former) J. P. Morgan private bankers: Cindy Brown, Daffan Nettle, Leslie Gunawan, and Jay Boynton. The team is bringing several VP’s and analysts with them to UBS and joining Tommy Stacey, Market Head PWM, and his executive team.

In several conversations this afternoon, it is clear that UBS not only landed the biggest team deal in history, but truly influential bankers in the names above. The news spread like wildfire and the largess of the careers at JPM associated with Cindy Brown and Daffan Nettle not only raised eyebrows, but stopped their colleagues across the country in their tracks.

The financial details of the recruiting deal itself (upfront backend, and other finer points) are still under wraps; but we expect those to leak at some point. Given the high profile nature of the team, the female majority make up, and that it’s JPM versus UBS – we expect more to come from this historic move in the following days and weeks.

In trying to get our heads around the historic size and scale of this deal one thing is clear – UBS has found a bit of magic in the private banking world and they are pressing hard.

UBS Lands ‘Couture’ Team In Miami – Female Led WF Private Bank Group Adds $14M In Annual Revenue

UBS continues to dive deep into the private banking space to grab huge teams with massive assets and massive revenue streams. The private banking teams are also loaded with UHNW assets attached to groupings of households, family offices, and institutional accounts. The strategy is running on ‘full blast’ at the moment with another announcement just yesterday.

The announcement yesterday focused on a group that joined the Private Wealth division of UBS in Miami, and includes Doris Neyra and Melissa Van Putten-Henderson as well as highly regarded CSA Gina Jamurath. They had been generating $14 million a year in annual revenue, and we were passed a note that their assets are a smidge above $2.5B.

Those numbers have been consistent with the private banking ‘big game’ hunting that UBS has been focused on for the better part of 6-9 months at firms like JP Morgan, Goldman Sachs, Bank of America, and Citi. This particular move out of Wells Fargo’s private banking operation is the first of its kind, and you can bet will widen the eyes of recruiters across the country.

Wells Fargo has struggled with advisor retention based on the client account opening scandal in their traditional wealth management channels. Their private banking ranks have been largely untouched… now, all bets are off. Expect more of these announcements to make their way to competitor firms over the second half of this year.

As per the private wealth division at UBS – its ranks continue to bulge as each of these types of private banking teams are slotted into that ’tier’ of the UBS ecosystem here in the US. It is quite obvious that UBS is making a bet on a calculated and aggressive lunge upmarket. Across the globe UBS remains the largest wealth manager amongst its peers. A few global investment banks may have larger market caps and other divisions that denote larger overall banking scale; but UBS is solely focused on asset management. In that category they lead and are having enormous success selling that set of facts.

This isn’t a blip on the radar for UBS and private banking hires, rather its a movement. Expect these announcement to increase in frequency and increase in size. Whispers abound that even larger teams are on their way to UBS (potentially 2-3x the size of this team in Miami), and the private banks they’ve been exiting from have yet to figure it out.

Cracking The Code – UBS Disproves Long Held Adage That ‘Money Talks And Bullsh** Walks’

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.