UBS Brokerage Is Not For Sale

Posted by adaniels in Blog on October 7, 2011

UBS Chairman, Kasper Villiger and interim CEO Sergio Ermotti said in an internal memo to UBS Wealth Management America employees, “Again: this business is not for sale.”  “We want to reassure you that wealth management at UBS has a global footprint and is a core pillar of the firm’s integrated business model.  The continued success of our Wealth Management Americas business is essential to maintaining that footprint and helping achieve our strategic vision.”

“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, according to a recent article in Investment News.

There has been speculation in recent months that UBS might sell or spin-off itsU.S.brokerage arm.  UBS officers have repeatedly denied that Mr. McCann’s unit is up for sale. 

The $ 2.3 billion loss the London based trader allegedly caused will make it difficult for UBS’s wealth management business on many levels.  This is an embarrassing incident for UBS.  “The asset management business is about managing risks in volatile markets….If they can’t manage their own risks, how can they manage mine?” according to an article in Investment News. 

Robert McCann and Robert Mulholland are highly regarded leaders.  UBS currently is offering one of the strongest recruiting packages.  Advisor headcount fell to almost 6,000 from 8,000 after the financial crisis.  UBS was on a roll as their recent headcount is approximately 6,800.  The rogue trading scandal could definitely impact financial advisor recruiting in the short term.

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