Wednesday, February 21, 2018

UBS Pulls a Fast One on its Own Employees

Only a few months after withdrawing from the Protocol, UBS Financial Services is requiring brokers waiting for their 2017 bonuses to sign agreements that open them to lawsuits and arbitration complaints if they try to contact former clients within 12 months of leaving the U.S. broker-dealer unit of the Swiss bank.

UBS slipped the provision into the bonus agreement, without advising their brokers of this significant and dramatic change in the relationship. Many fear that the move is the start of an aggressive move to sue brokers who leave the firm, ultimately destroying careers and broker-customer relationships.

The withdrawal from the Protocol was the start. Advisors need to review their agreements with UBS to see if there is a non-solicit agreement in the bonus and related agreements that were signed when you joined the firm. Such provisions were in the agreements as presented to a new hire, even when the Protocol was in place. Far too often during the negotiations for the transition, UBS took the position that the Protocol trumped the non-solicit. We always had the language removed, regardless of the Protocol. Now that language is important, as we return to the pre-Protocol days of temporary restraining orders, legal fees, and unwarranted down time.

I have been representing brokers in transition for decades, and have seen it all, but this last move by UBS is beyond the pale.

UPDATE: UBS claims that the failure to advise brokers of the language was an oversight, and there are now reports that the language is being modified, or removed. Get it in writing, and if you signed that bonus agreement, retract it!