New UBS boss: U.S. brokerage not for sale
Another black eye (Bloomberg News)
In an internal memo obtained by Reuters, the new boss of UBS says the bank's U.S. brokerage is not being shopped -- despite rumors to the contrary. | PR disaster could curtail UBS' generous recruitment packages | Extra What top RIA execs make
The top two UBS executives on Monday told U.S. brokers that the sudden departure of group CEO Oswald Grubel will not lead to a sale of the American unit, according to a report by Reuters.
“Again: this business is not for sale,” UBS Chairman Kasper Villiger and interim CEO Sergio Ermotti said in an internal memo to Wealth Management Americas employees.
Villiger and Ermotti also affirmed their support for the unit’s CEO, Robert McCann, who jumped from Merrill Lynch to two years ago to lead the U.S. unit’s turnaround.
“UBS is committed to further developing our franchise in this important wealth market under (McCann’s) leadership,” Villiger and Ermotti wrote, adding that a successful U.S. wealth management business is “essential” to UBS’ strategy of operating as a global wealth manager.
“A lot of the advisers have been telling us that this negative press was really hard to spin,” recruiter Mindy Diamond of Diamond Consultants of Chester, New Jersey, told Reuters.”There are a lot of very frustrated UBS advisers.”
One UBS adviser, who did not reveal his name because he is not authorized to speak to the press, told Reuters that U.S. brokers are not happy about being put on the defensive again.
“These scandals are a little annoying,” the adviser said. “Customers keep asking us, ‘How does this affect you?’”
Recruiter Rick Peterson, of Rick Peterson & Associates in Houston, told Reuters the news added to the sense of instability for UBS America’s brokers.
“Every time you hear, ‘UBS loses a pile of money’ or ‘UBS is in trouble with the U.S. government,’ it means UBS is in trouble with their clients,” said Peterson, who has also recruited UBS brokers. “It just compounds in their minds.”
There has been talk in recent months that UBS might divest or spin-off its U.S. brokerage arm. Rumors have also circulated that Wells Fargo & Co. might be interest in purchasing the unit. Wells Fargo has not commented on those rumors, but UBS officers have repeatedly denied Mr. McCann’s unit is up for sale.
Research analyst Richard Bove of Rochdale Securities told Reuters that UBS will likely keep the brokerage arm, noting that the unit is not capital intensive and generates cash.
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