UBS is changing the bonus policy in a bid to boost earnings at its U.S. private-banking business. The new rules put a higher emphasis on team performance than on the efforts of individuals.
UBS is adjusting the bonus policy for its brokers in the U.S., the «Wall Street Journal» (by subscription only) reported. The bonus of a broker as of next year will depend on the performance of the team member who generated the highest revenue for the bank.
«The primary thing we looked at is remaining competitive and retaining our top talent,» Jason Chandler, head of UBS's wealth-management adviser group for eastern U.S. told the «Wall Street Journal».
Pressure on all Members
At the same time, the whole team will only then receive a bonus if all team members generate a certain minimum revenue, increasing the pressure on brokers to perform. The minimum has been set at $750,000.
One of the aims of the changes in the bonus program is to encourage brokers to better link up with team members. That way customer receive a better service than if the client advisers work on their one.
Teams Perform Better
According to Chandler, teams on average are more successful than those brokers who practice individually.
A study by PriceMetrix, a research company based in Canada, supported the Chandler's statement. The study of 40,000 advisers found that groups of at least two outperformed their solo counterparts by growing faster and generating more revenue, fees and commissions, the «Wall Street Journal» reported.
The changes at UBS will also be linked to the high cost-earnings-ratio of the U.S. unit of UBS, which at 86 percent is higher than at other wealth-management units of the Swiss bank.
