UBS Hires $1.2 Million Merrill Producer in Rochester
Even as it retreats broadly from bonus-inflated recruiting wars, UBS Wealth Management Americas is still selectively poaching some million-dollar producers.
Michael Chabalik, who had worked at Merrill Lynch in a Rochester, New York, suburb for eight-and-a-half years, joined UBS with two associates in late February. The team generated $1.2 million in annual revenue in the previous 12 months and managed about $125 million of client assets, said a person familiar with the practice who was not authorized to speak for UBS.
Chabalik, junior partner Patrick Kelly and client service associate Melody Wilkinson left for what they expect will be fewer restrictions on client prospecting and marketing events than were constricting them at Merrill and some upfront money, the source said. The team has an active 401(k) rollover business with baby boomers that they feared would also be affected by Merrill’s tightening fiduciary-rule restrictions on retirement accounts.
The team was also worried about internal competition at Merrill from Bank of America’s robo advice offering, Merrill Edge Guided Investing, which has a 45-basis-point management fee, according to the source. When pitching Merrill’s model-portfolio managed accounts, advisors must disclose that the same strategy is available for less at the bank, the source said.
For UBS, Chabalik’s hire illustrates that despite Wealth Americas President Tom Naratil’s declaration last summer that he will replace no-win recruiting battles with stronger team-based retention bonuses to veterans, the firm is still hiring. Its offers to Chabalik and others do not include back-end bonuses tied to future production and client transfer targets, in line with DOL-rule restrictions adopted by rivals, but pay up to 175% of trailing-12-month revenue as well as deferred bonuses left behind, according to several sources.
In 2016, UBS recruited 178 brokers, down 54% from 389 the previous year, its Swiss banking parent said in its annual report earlier this month. When Naratil announced his strategy in June, he said he expected recruiting going forward to fall by about 40%.
Chabalik began his brokerage career in 2003 at Waddell & Reed, shifted after a year to Brighton Securities and began his eight-year stint with Merrill in 2008, according to his Financial Industry Regulatory Authority BrokerCheck report.