Big banks tell brokers to aim higher
There’s some mixed news if you want to work in wealth management at UBS. On the positive side, the Swiss bank is hiring as it looks to triple assets under management in fee-based accounts in the U.S. The rough news is that you’ll likely need more than just your grandmother and a couple of college buddies in your Rolodex if you want to get the job. Like other bulge bracket banks, UBS is going after the big money.
UBS currently has five "dominant super-teams,” each made up of 20 brokers and as many as 50 analysts and specialists, a wealth management exec said at a recent industry conference attended by Reuters. By 2020, UBS wants 100 of these super teams, whose superpower is to raise and control hundreds of millions, if not billions, of dollars.
A UBS rep told Reuters that the firm still employs brokers with less than $100,000 in assets under management, but the writing is on the wall. UBS wants to duke it out with buy-side firms over ultra high net worth customers, who typically have more than $10 million in investable assets.
You’d have to assume that building 100 super teams would involve plenty of hiring and poaching from other firms, but the tweak in strategy also suggests that smaller brokers could be deemphasized. UBS wants to grow fee-based assets to $1 trillion within the next 10 years.
Elsewhere in wealth management, Merrill Lynch is pushing its advisers to bring in more new business. The brokerage firm is essentially doubling bonuses for advisers who bring in new assets that are put into fee-based advisory accounts or used to buy loans or other banking and trust products, according to a separate Reuters report. However, its cutting bonuses on new assets that are allocated to low-profit money-market or bank accounts. [efc_twitter text="Call it a collective kick in the pants for advisers who are just sitting on old money"].
Have you heard of executive derailment? If you’re a vice president or director-level banker and you want to get promoted, it’s about time you familiarized yourself with the term.
If you ask headhunters about the most disaffected cohort of bankers ahead of bonus time, one group crops comes up over and over again – UBS fixed income professionals.
Here’s the new, old practice that regulators are (understandably) going after. Banks having their equity analysts give favorable outlooks on companies that are soon to IPO, with underwriters swooping in soon there after. Finra just fined Goldman Sachs, J.P. Morgan and others for doing just that when working on a potential Toys “R” Us deal that never ended up happening. This occurred a bunch in the ‘90s.
If you work in the asset management industry, we’ve got some bad news. The SEC announced a new set of initiatives aimed at limiting risk in the industry, similar to how banks are treated. Stress tests, more transparency and the like. Alternative mutual funds that play with risky derivatives are likely to be penalized the most.
Bridgewater Associates is famous for three things: making a lot of money, tape recording all internal conversations of employees and playing them back to the whole staff, and its absurdly high turnover rate, which may be related to the second point. Anyway, founder Ray Dalio didn’t back away from the controversial practice on Thursday, saying it provides a benefit other than transparency. Bridgewater is rarely ever involved in a lawsuit, as there is really nowhere to act sketchy.
Goldman Sachs is being required to pay two former financial advisers more than $7.5 million for allegedly wrongly firing them and withholding their bonuses. The duo said that Goldman fired them after one spent time away while volunteering for the military. Goldman “vigorously disputes” the charges and said the pair was let go for poor performance.
If you are an analyst in New York, you likely make a decent living compared to analysts in other cities. Except when you bring cost of living into account. Then you are basically poor.
Buzz Around the Office
Famed Hollywood producer Scott Rudin had some of his emails leaked as part of the Sony hack. In them, he calls Angelina Jolie a brat, made racially insensitive remarks about President Obama and basically revealed himself as the person most thought he was. Gawker once ranked him as one of New York’s worst bosses.
Quote of the Day: “When someone describes themselves as a taxpayer, they’re about to be an a**hole.” – Demetri Martin