UBS’ U.S. wealth effort gets lift

NEW YORK — The efforts of global-asset-management leader UBS AG to boost its wealth management presence in the United States may soon become turbocharged, thanks to a management shake-up this month that elevated the Swiss bank’s wealth management chief, Marcel Rohner, to chief executive.
The company is also planning a series of initiatives for its U.S. wealth management efforts.
“Our aspirations in the USA are indeed higher than our current position,” Marcel Ospel, chairman of the Zurich-based banking giant, said in a recent interview in the Swiss newspaper SonntagsZeitung, adding that Mr. Rohner will lead “a new growth initiative” in the U.S. market.
“We feel fortunate because Marcel Rohner has been an advocate for the U.S. business,” said Marten Hoekstra, head of UBS Wealth Management U.S. in New York. Mr. Rohner, he said, recognizes that UBS has “more opportunity to grow” in the United States.
A key driver of that growth will be expanding the bank’s private-wealth-management offices that work with ultrahigh-net-worth clients, those having at least $10 million in investible assets, according to James M. Pierce, the Chicago-based Western division manager for UBS Wealth Management U.S.
By the end of the year, the bank plans to open private-wealth-management offices in Atlanta, Chicago, Los Angeles and San Francisco, adding to established offices in New York and Stamford, Conn., he said.
The bank by 2010 hopes to at least double its total of 130 private-wealth advisers, according to UBS spokesman Kris Kagel.
UBS also plans to expand a pilot program it started this year in Detroit in which it offers specialized financial advice for its high-net-worth clients — those with between $1 million and $10 million to invest, he said.
Over the past year, UBS has been unapologetically aggressive in its recruitment tactics, offering brokers, advisers and top executives generous packages to come on board.

Poaching executives
The bank has poached high-profile executives from rivals in the past few months, including Lorraine Harrik, a 23-year wealth management veteran from New York-based Citigroup Inc., and, from Citigroup’s Smith Barney unit, recruiter Jeff Bischoff.
“We want to be competitive, and I think we need to be,” Mr. Pierce said.
“Compensation for financial advisers is a function of your confidence in their growth rate,” Mr. Hoekstra said. “If you truly believe that advisers will grow faster at your firm, you should pay for them believing that they will be the smartest users of the firm’s resources, and this, in turn, will drive their growth rates even higher.”
To date, UBS’ growth strategy has been “certainly organic,” Mr. Pierce said.
Despite rumblings in the industry that UBS’ digestion of the former New York-based PaineWebber Inc. hasn’t always been the ideal fit for its wealth management business, he said, the bank is also “open to acquisition as an accelerant” if the “cultural and financial fit” works.
PaineWebber has been “a very good integration. We’re very happy with what we have,” Mr. Pierce said.
“Sensible acquisitions always interest us,” Mr. Ospel said in the interview with SonntagsZeitung. “If they correspond to our strategic, economic and cultural conditions, in most likelihood, we will act on it.”
Such moves may come sooner than later with Mr. Rohner’s ascension as CEO, industry insiders said.
His promotion is a sign that wealth management “will become a top priority at the bank … and is a clear indication that UBS is a wealth management shop at heart,” said Alois Pirker, senior analyst for Boston-based Aite Group LLC.
Globally, UBS’ wealth and asset management performance has been outstanding.
UBS has more than $2.5 trillion in assets, and half the company’s $11.6 billion in pretax profit last year came from wealth management.
This month, UBS was named best private bank of the year in Europe in the London-based magazine Spear’s Wealth Management Survey.
Playing catch-up
But UBS has yet to achieve that kind of status in the United States.
“We’ve seen plenty of action [from UBS] on the brokerage front, but we’ve yet to see anything in wealth management. The Swiss banks have a history of coming in and out of the markets here,” said Jay Welker, executive vice president of private-client services for San Francisco-based Wells Fargo & Co.
To be sure, UBS is hardly an also-ran in the United States.
Since acquiring PaineWebber in 2000, Piper Jaffray Cos. of Minneapolis last year and McDonald Investments Inc. of Cleveland in February, the bank now has $713 billion in U.S. assets. Assets in the ultrahigh-net-worth unit have risen to $120.5 billion, from $48 billion in 2003.
The bank’s renewed focus on wealth management with Mr. Rohner at the helm should result in a “more prominent” U.S. presence for UBS, according to investment banker R. Bruce Cameron, president of New York-based Berkshire Capital Securities LLC.

Related Topics: Wealth Management