Wealth Management

(New York)

The life of an advisor at a wirehouse is certainly changing. In the new broker-protocol-collapsed world, things have become different. At UBS, the changes are very clear—advisors are being paid more, but it is harder to leave. The average broker for UBS earned about $471,000 in 2017 (skewed by big earners), up 13% over 2016. However, at the same time, the firm dropped out of the broker protocol, making it harder for advisors to breakaway. UBS spent 7% less on new broker recruiting last year.


FINSUM: A 13% pay bump is a pretty strong number, but it could likely be much higher if one were to go out on their own.

(New York)

Advisors look out. The big bang moment in wealth management might be about to happen. That moment might be when Amazon launches its own robo advisor, taking the concept to the masses in a way that has not been done before. Amazon is already getting involved in finance with its pursuit of checking accounts and ecommerce retailer Overstock.com is launching its own robo. One wealth management commentator put it this way, saying “Advisers have their head in the sand; they are in denial … Many think this won’t affect them or their clients … There were probably a large number of buggy manufacturers that were saying the same thing in 1910”. Amazon has a mountain of using data on people’s spending habits, which could give them a leg up.


FINSUM: It seems like only a matter of time before Amazon moves in this direction. There is still good margin to be had in this space, which makes it ripe for Amazon.

(New York)

Morgan Stanley advisors look out, it appears the firm is sending a warning out to its wealth management force. According to Wealth Management, “Morgan Stanley in February filed a motion for a temporary restraining order and a preliminary injunction against a breakaway team in Farmington Hills, Mich. It was recently withdrawn. A lawyer for the breakaway team suggests that Morgan Stanley lawyers deliberately used the court filing, and prolonged the case, to make the conflict public and deter other breakaways”. One lawyer commenting on the moves says that Morgan Stanley is likely doing it to intimidate their current advisors into not jumping ship.


FINSUM: The end of the broker protocol made what was a tenuous environment into an all-out battlefield. This definitely seems like an intimidation tactic.

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