Credit Suisse to re-work advisor comp plan: media

FWR Staff

5 November 2008

Advisors reportedly gloomy about '09 service-charge, stock-comp provisions. Executives of Credit Suisse's U.S. private bank are re-working 2009 compensation plan whose first draft went over poorly with advisors, according to a media report that cites "a person familiar with the matter." The same source says a new compensation plan for Credit Suisse U.S. relationship managers will take effect early in 2009.

Credit Suisse couldn't be reached for comment.

By the book

One matter advisors are said to have viewed with particular dismay was a management proposal regarding minimum service charges. A report by Dow Jones, citing "two people familiar with the plan," says that Credit Suisse advisors who charge clients less than a proposed minimum commission per transaction would receive only partial or no compensation for that business.

This would make it harder -- or at least more expensive -- for advisors to waive or reduce charges for lucrative clients.

The first version of Credit Suisse's 2009 compensation plan also takes some cash off the table and replaces it with company stock -- with Credit Suisse's ADR now about 50% off its 52-week high.

Headhunters say the first iteration of Credit Suisse's compensation plan "demonstrates Credit Suisse's faith in its business model," but "could turn off financial advisors considering a move to the firm," according to Dow Jones.

"If you're taking cash away and adding stock, it reduces the freedom of choice that a broker would have," recruiter Michael Wasserman of Michael Wasserman & Associates told the news wire.

Recruiting

Credit Suisse has 400 advisors in 15 offices in the U.S. Their average annual production is a bit north of $1 million. This year the Zurich-based bank's U.S. wealth-management business hired more than 100 advisors who managed something $33 billion at their old firms.

In fact Credit Suisse just pulled a team of big producers in Boston. Paul Connolly and Jonathan Galli managed about $950 million in client assets at UBS. Credit Suisse also recently grabbed San Francisco-based Sanford Katz, who oversaw about $1.7 billion for UBS. Katz joined UBS from Goldman Sachs in 2003.

Speaking of broker hires, it seems that Smith Barney has made a couple of new ones as well. In Atlanta Citigroup's retail brokerage brought in former Merrill Lynch advisor David Doll -- not to be confused with the former CEO of Houston-based Kanaly Trust -- and, in Mt. Laurel, Pa., ex-UBS broker Tom O'Neill. -FWR

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