UBS, which said it has reduced its traditional advisor training scheme from around 200 in 2012 to between 120 and 130 people this year, is now taking a different training approach by not pressurizing new brokers to sell products and services and build up client accounts quickly, the firm told the Wall Street Journal, but confirmed to this publication. 

Instead, trainees will focus on obtaining the Certified Financial Planner designation, while working with a number of advisor teams at UBS to get a feel for each aspect of the business. After they have completed the programme, they will be added to an existing team and given a salary and small share of the group's book of business. Their salaries will then be reduced over time as they begin generating their own business.

Ageing advisor workforce

According to figures from Cerulli Associates, only 5 per cent of all financial advisors in 2011 were under the age of 30, while 22 per cent were over the age of 60 and 33 per cent were between the ages of 50 and 59.

Meanwhile, in last year’s World Wealth Report, Capgemini and RBC warned that essential client needs could go unmet if the more “tenured” advisors opt for advisory methods which don’t resonate with younger high net worth individuals.

“Firms will therefore need to map advisors to the appropriate category of clients to ensure the relationships are well-matched, and perhaps develop a younger advisor workforce for younger HNW individuals to relate to,” the report recommended.

Wirehouses have cut back substantially on recruiting programmes and have also laid off many underperforming younger advisors, Chip Roame, managing partner at Tiburon Strategic Advisors, previously told this publication.

UBS's strategy

UBS's new approach “should ease the tension that traditional trainees feel in having to simultaneously learn the business and generate revenue,” Nilesh Parikh, head of new financial advisors and wealth planning analysts at UBS Wealth Management Americas, told WSJ.

Jason Chandler, head of UBS' Wealth Management Advisor Group, added that if the pilot proves more successful than the firm's traditional training programme, it could be the only way that the firm trains new advisors going forwards. 

As highlighted by the news service, other firms are also reassessing how they train and recruit new talent. Bank of America Merrill Lynch, for example, now pays for CFP education for its advisors, while also making coursework a compulsory aspect of its training process. Morgan Stanley Wealth Management, meanwhile, is reimbursing CFP costs for both advisors and trainees.