In Focus at UBS: Equity Compensation Technology and the Participant Experience

Earlier in 2018, Head of UBS Equity Plan Advisory Services Michael Barry announced the launch of an enhanced equity plan recordkeeping platform, known as UBS Plan Admin Pro.

At the time, he also commended his colleagues for the planned launch of “a transformed participant digital experience, UBS One Source, later this year, which will include a more streamlined experience as well as access to both digital advice and financial wellness tools.”

Following up on that pledge, the firm recently gave PLANADVISER an exclusive sneak peak of UBS One Source, and Barry explained the plan to begin a phased rollout of the reimagined digital experience for equity compensation plan participants “throughout the summer and the end of 2018.” As Barry noted, eventually the plan is to roll out the platform across the firm’s 180-plus corporate clients and some 800,000 equity plan participants.

“Designed in-house, the newly reconstructed website will deliver financial wellness content, as well as provide effective, user-friendly tools for financial modeling and transacting on equity awards for employees at all levels,” Barry explained. “Embracing the right type of technologies and creating innovative solutions are the heart of our service offering.”

Barry stressed that the new One Source program helps to build deeper adviser-client relationships that “combine convenience, knowledge and effective planning.”

With the updated One Source platform, UBS has introduced and combined several digital financial wellness tools, supported by the firm’s group of corporate stock benefit consultants. The programming aims to “provide all employees with access to tailored advice and guidance through their preferred delivery channels.”

“It also features a modernized, easy to navigate participant web portal and interactive educational content, as well as straightforward awards tracking,” Barry noted.

Barry explained this latest rollout is part of a longer story of technology collaborations at UBS. In 2016, UBS partnered with SigFig to design its first digital advice platform, UBS Advice Advantage, for clients of its UBS Wealth Advice Center. The platform offers portfolio diagnostics, goals tracking features and access to a new investment advisory product, the UBS Advice Portfolio Program. Following this, UBS Equity Plan Advisory Services partnered with Solium, another equity compensation and technology service provider, to create UBS Plan Admin Pro.

More on UBS One Source

Users of the new UBS One Source digital portal will have the ability to conceptualize the equity compensation granted to them by their employer through visual aids and tools; learn about different award types, vesting schedules, important dates and stock price points to monitor; and customize their equity events calendar and setup personal notifications. Further, users can model potential transactions to understand outcomes prior to executing order instructions, and review the impact their equity compensation can have on their overall financial future.

Barry said he has high hopes for the performance of the new platform, and will aim to share more detail about how One Source is utilized by equity compensation clients once that becomes available.

“We’ve always had great wealth management advisers servicing and delivering specialized advice and guidance to equity plan participants,” Barry suggested. “But now, our participants and corporate clients gain access to a greater abundance of intelligent tools that will help them achieve their financial goals.”

Appreciation of the equity award among employees can be low

Besides discussing the rollout of UBS One Source, Barry offered some broader ideas about the role of equity compensation and the importance of communicating the value of equity compensation programs to employees.

“Companies offer equity awards to attract and reward top talent, but participants don’t always recognize the value,” Barry explained. “In our surveys and research, we discovered that when employers follow certain steps and build their programs in specific ways, their employees appreciate their awards a lot more.”

Perhaps most important, employers should incorporate equity awards into the broader financial picture. According to internal UBS surveys, participants value equity awards 13% more when they are also presented with tools to help them consider equity awards within the context of a financial plan.

Next, Barry pointed to the offering of individualized advice on company stock holdings. When participants regularly discuss equity awards with a financial adviser, appreciation rises by 16%. Finally, Barry suggested helping employees see the benefit of diversifying company stock holdings, as participants who diversify their holdings value equity awards 16% more than those who sell all their vested shares.

Barry said UBS research also highlights another important fact for readers to consider. Some companies may not realize that the financial crisis has made many investors skeptical of the markets. As a result, participants don’t always see the full value of equity plans, Barry warned. In fact, according to UBS polling, only two out of five place “considerable value” on equity awards.

UBS research has also examined how participants from a cross-section of companies, industries and service providers feel about their equity awards. The firm learned that certain variables drive perception more than others, and used the data to build out the UBS Equity Award Value Index. In particular, the UBS index shows the participant vesting experience clearly matters.

With a vesting period of greater than six years, participants tend to view equity awards more as a way to build retirement wealth. With a vesting scheduled between three and five years, participants are more apt to view equity awards as a paycheck supplement, and they are less sure how to maximize the potential of awards. With shorter vesting periods, fewer than three years, UBS research suggests the tendency is to view equity awards more as a lottery ticket.