Major events at UBS- Sale in the works now?

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burtonfinancial1's picture
Joined: 2008-09-30

Major events at UBS and rumors accelerating around a sale? Consider this list/timeline of recent events.....and this is only a partial list! 1) RIF in April-  cleaned up P&Ls, cleared out low producers2) Stifel acquisition...nearing close date soon... clearing out small offices and more small producers3) DOJ/Swiss Govt. Tax Settlement done in the last week. ....finally, major issue out of the way4) Swiss Govt. pulls it's stake in UBS: The Swiss state sold 332.2 million shares to institutional investors,
the government said in a statement Thursday. Including a $1.7 billion
cash payment the state is getting. 5) September/October RIF, yes another one is going to happen. Will take another chunk of LOS 5+ producers and light P&Ls off the rolls.  Come back on Halloween and tell me I was wrong if this fails to materialize.  I called the last RIF in April 4+ weeks before it happened here. My bet is a sale is announced by late October or early November at the latest with a close date on or before 12/31/09.   Again.. come back and tell me I was wrong. This event will trigger another spring 2009 like recruiter frenzy in Q4. Meanwhile... pile it on my friends!

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what's to pile on about? 
The Swiss must just be shaking their heads about the crazy americans and wondering why they ever bought Paine Webber.
 
What's the morale level of a typical UBS office these days?

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When they announced the creation of the Americas divsion for the US brokerage biz seemed like selling it would be a possibility down the road.   In short oder they did sell some of the biz to Stifel.

 
The question is who would want them?

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burtonfinancial1 wrote: Major events at UBS and rumors accelerating around a sale? Consider this list/timeline of recent events.....and this is only a partial list! 1) RIF in April-  cleaned up P&Ls, cleared out low producers2) Stifel acquisition...nearing close date soon... clearing out small offices and more small producers3) DOJ/Swiss Govt. Tax Settlement done in the last week. ....finally, major issue out of the way4) Swiss Govt. pulls it's stake in UBS: The Swiss state sold 332.2 million shares to institutional investors, the government said in a statement Thursday. Including a $1.7 billion cash payment the state is getting.
 
 
 
 
McCann coming Monday.    MADE swiss stay the f^&% out  (has been THE problem).  he has free rein to turn aroung within 3 year time frame.  Lots of fee based hitters were bought.
Brighter days to come.   UBS will be awesome place to work going forward.  This guy smart and knows FA's drive the business.

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Sale of WMUS or breakup ?  Who are the likely suitors ?  Timeline looks reasonable, with key issues out of the way (DOJ and Swiss Govt ownership).

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I ownder if the sale to Stifel was a good test to see if they could jsut sell off branches successfully.  A little unorthodox, but do you think they would sell each market to the highest wirehouse bidder?  Again, not typical, but maybe they tested it with the smaller offices.

burtonfinancial1's picture
Joined: 2008-09-30

Potential Suitors:JPMDeutsche BankCredit Suisse -   long shot at bestHSBC -  would be horrible in my view - HSBC screws up everything they buy in the U.S.AMP (Ameriprise)... yes.. it could happen, they want to acquire something BIG and have the $$ Thoughts?

burtonfinancial1's picture
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B24 wrote:I ownder if the sale to Stifel was a good test to see if they could jsut sell off branches successfully.  A little unorthodox, but do you think they would sell each market to the highest wirehouse bidder?  Again, not typical, but maybe they tested it with the smaller offices.I think there's something there as well. I could see UBS sold off in 2 or 3 chunks. JPM or DB taking the big high net worth offices in major markets. AMP, Ray Jay, RBC or someone like them taking the bottom half or 1/3rd.

burtonfinancial1's picture
Joined: 2008-09-30

Adds some color to the points I made here. UBS retail-products executive takes leave

Michael Weisberg's indefinite departure was announced internally this
week, as the Swiss firm deflected rumors over its future leadership

By Jed Horowitz

August 5, 2009

Michael Weisberg, the head of products and services for UBS AG's U.S.
and Canadian wealth management businesses, has taken an indefinite
leave of absence, a UBS spokeswoman confirmed.His
departure was announced internally this week, as the Zurich,
Switzerland-based bank announced a second-quarter net loss of 1.4
billion Swiss francs ($1.3 billion) and as rumors swirled that the
firm's U.S. brokerage business was likely to be reorganized. Mr. Weisberg's leave is due to personal, not performance-related, issues, the spokeswoman said.Mr.
Weisberg, who is in his late 30s, has been on the managing board of
UBS's global wealth management and business banking group since 2005. His
responsibilities have been assumed by James Hausmann, a fixed-income
specialist who has run transaction products at the New York-based U.S.
wealth management group since 2005. Mr. Hausmann joined one of UBS Wealth Management's predecessor firm, PaineWebber, in 1991.Last quarter, UBS lost about 820 financial advisers in the Americas, leaving it with under 8,000 brokers. More than $5 billion of assets were drained from its U.S. wealth management business during this time. Although
all large brokerage firms have experienced broker and client erosion,
UBS's problems have been exacerbated by some $40 billion of trading
losses in 2007 and 2008 at its U.S. hedge funds, and by charges from
the U.S. government that it helped wealthy American clients evade
taxes. UBS last week announced an agreement in principle over the tax
issue with the Internal Revenue Service. Globally, the
firm experienced outflows of 17.1 billion Swiss francs ($16.1 billion)
from its asset management businesses last quarter and 16.5 billion
Swiss francs ($15.5 billion) from its non-U.S. private banking and
brokerage businesses.UBS's wealth management woes have
triggered expectations that the Swiss bank could sell its U.S.
brokerage business or change management. Robert McCann the former
president for global wealth management at Merrill Lynch & Co. Inc.
of New York, has been negotiating to become head of UBS Wealth
Management Americas or possibly buy all or part of the business,
according to sources and published reports. Karina Byrne, a UBS spokeswoman, declined to comment on the reports. Marten
Hoekstra continues to be in charge of UBS Wealth Management Americas
and UBS AG's new chief executive, Oswald Grubel, has in the past
affirmed his commitment to the U.S. business, she said. In
a conference call with analysts earlier this week, Mr. Grubel denied a
report that UBS will retain the U.S. businesses for at least three
years.Mr. Hoekstra last month reorganized the firm's U.S.
sales structure, shrinking it from eight to three regions. The bank is
also in the process of selling or closing dozens of branches. The firm's new Northeast region is run by Jason Chandler, former head of the New York City metropolitan region. Its West region is headed by Michael Schweitzer, who had been Mr. Weisberg's deputy in products and services. Its new Central region is run by David McWilliams, a 30-year veteran of Merrill Lynch who joined UBS earlier this year.

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I don't see RJ getting involved..
JPM seems logical, but does Dimon make another acquisition after WAMU,and BEAR? That is a lot to integrate... But they make sense only big bank lacking a stand-alone brokerage business.

Or does a regional scoop up a couple of offices in its region and they just split up the whole thing, no more UBS, sold off in chunks to highest regional bidder.

sunbelt's picture
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What does  RIF stand for?

burtonfinancial1's picture
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legal mumbo jumbo for "Reduction in Force"

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UBS upped their transition package this week.  It's up to (back up to) 250%.  There is a rumor the folks transitioning to UBS are bringing fewer assets than folks leaving UBS.  It feels logical but you never know if that's just management pushing their own scoop.  I'm glad I got out of there just in time.  90% of the top producers in my former branch came on in the past two years.  My calculator isn't smart enough to figure out how that can be profitable.  And don't expect to be rewarded for sticking it out.  When I left the good accounts were called by the newly recruited advisors.  Why risk funding the "deal" from the branch for the folks who don't hit their numbers?

burtonfinancial1's picture
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NOVA wrote:UBS upped their transition package this week.  It's up to (back up to) 250%.  There is a rumor the folks transitioning to UBS are bringing fewer assets than folks leaving UBS.  It feels logical but you never know if that's just management pushing their own scoop.  I'm glad I got out of there just in time.  90% of the top producers in my former branch came on in the past two years.  My calculator isn't smart enough to figure out how that can be profitable.  And don't expect to be rewarded for sticking it out.  When I left the good accounts were called by the newly recruited advisors.  Why risk funding the "deal" from the branch for the folks who don't hit their numbers?Good update and I've heard the same... this would make UBS now only 90% of T-12 behind the current leading offer for tier 1 producers heading into Merrill Lynch who is owning the top spot in recruiting deals by a long shot from a $ standpoint.  Jeez, even MSSB is doing 240% for the same level of production which is pretty darn close to what UBS may be offering top FAs. Why anyone would go to UBS now, at least in the wires, is unimaginable.  If you're AT UBS, news that they're now paying your replacement 250% (all in) is nothing to celebrate.  UBS is desperate.  The firm out-recruited the entire wirehouse world from late 08 into Q1 09', backed off in Q2 and has lost a load of great people since. They have slaughtered their branch P&Ls funding big deals just to fill emptying seats and have lost many big producers who owed the firm nothing at the same time. You can't do that very long and sustain any decent level of profitability.

secretknowledge's picture
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BurtonFinancial:

You are way off on this one. He is out on disability with a medical condition that none of us would want to have. I do not know if he will end up being able to come back or not.

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burtonfinancial1 wrote:
5) September/October RIF, yes another one is going to happen. Will take another chunk of LOS 5+ producers and light P&Ls off the rolls. 

All 5th quintile folks or just some?

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secretknowledge wrote:BurtonFinancial: You are way off on this one. He is out on disability with a medical condition that none of us would want to have. I do not know if he will end up being able to come back or not.
 
My sincere get well wishes---I hope he fully recovers :)

A b's picture
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UBS not for sale.   Ozzie said it.   (after Oz fest) 
They want turnaround in 3 years.   McCann coming with total control. 

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McCann was one of several horsemen that was responsible for Merrill's
demise...he has NEVER been an advisor.  I doubt he could close a
screen door, not to mention a multi-million dollar household.  The
entire industry (wirehouses) is only interested in top management, not
the advisors and certainly not the client.  BTW, the ultra HNW
initiative at UBS has been a total train wreck...poaching wealth
management offices and shifting the revenue.  They will have a RIF
in several weeks with only client facing personnel affected...it won't
be fun.  Hundreds of CSA's gone with no corresponding cut in
Weehawken.  UBS should sell the core offices to a true wealth
advisory firm, whomever that may be.  They do not need the
Swiss.  They have a small window in my oipinion to benefit from
the recent strength in the stock and sell the US WM unit.  If
not,  major defections and net new $$ outflows greater than what
they have experienced recently.  I vote for Sontag...Hoekstra is
more out of touch than a nun at a sinagogue.

burtonfinancial1's picture
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Very interesting development here on McCann.... http://www.ft.com/cms/s/0/3214e498-90e9-11de-bc99-00144feabdc0.html?referrer_id=yahoofinance&ft_ref=yahoo1&segid=03058&nclick_check=1He's suing Merrill/B of A now over their efforts to prohibit his employment elsewhere

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wow  

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secretknowledge.. i call bullsihitt on Michael, the whole upper mgmt tier of UBS Americas is running very very I repeat very scared.. they are a bunch of chicken siht  a holes and they are running with thier head up thier butts..they are very adept at this.!

UBScrewed's picture
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P.S. i have had probably worse mICHAEL AND NOBODY GAVE ME A PARDON!!!!

secretknowledge's picture
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You are still bitter at being riffed aren't you.

When a person goes out on disability it is not a pardon. When you go out with what he has at that young of an age you say a prayer for the person and say thank god that was not me or my family.

All people and strategy at UBS are not bad. Even though I do not agree with a large number of things that they are doing, I realize that it is not everyone at the firm who caused the issues. Decisions continue to be made at the firm that are inconsistent and not in the best interest of the firm   and that is sad/frustrating if you still work here. However, this is a case of someone going on medical disability for a very serious reason and you are WAY OFF BASE WITH YOUR COMMENTS.

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secretknowledge wrote:You are still bitter at being riffed aren't you. When a person goes out on disability it is not a pardon. When you go out with what he has at that young of an age you say a prayer for the person and say thank god that was not me or my family. All people and strategy at UBS are not bad. Even though I do not agree with a large number of things that they are doing, I realize that it is not everyone at the firm who caused the issues. Decisions continue to be made at the firm that are inconsistent and not in the best interest of the firm   and that is sad/frustrating if you still work here. However, this is a case of someone going on medical disability for a very serious reason and you are WAY OFF BASE WITH YOUR COMMENTS.
 
SecretKnowledge is right with this one. I don't know what is wrong with Michael, but I trust it is a serious medical issue. I hope and prayer he does recover. And that his family will also be ok. None of us want or need medical problems.
 
As for UBS...not all of UBS is bad. They've had some very serious issues over the last couple of years. Hopefully all the peoiple who created these problems have been or will be flushed out, and we can go forward with a much better firm. It's an injustice that many people suffered because of some of the nonsense that some of these people did. However, I think that we can recover. Right now, UBS is going through a major reorganization/shift in their business model. I agree with SecretKnowledge that not all of the decisions seem to be good. But I'm optimistic. Change will come. Eventually new leadership will be in place. And things will improve.

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McCann comin with blank check  and freedom.
UBS the place to go right now  

2much's picture
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Ab I hope UBS is paying you dearly for all of the McCann rah-rah and UBS kool aid drinking that you're doing.   

BeenThere's picture
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Betsy you're killin me here.    At first I thought that you meant what you wrote.   But then I realized that no one that works at UBS is naive enough to believe what you said.    You have truly mastered the art of sarsasm!!!
 
 

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2much wrote:Ab I hope UBS is paying you dearly for all of the McCann rah-rah and UBS kool aid drinking that you're doing.   
 
 
No Kool-aid.    Read my older posts.   I just call em as I see em.   
Swiss dumb asses finally get that they have to stay out.    Its a perfect set-up for someone to come in and be a hero.   Bar so MF low. 
Any of the people mentioned could do it  (sallie, ludeman etc).
 
I heard UBS now making managers produce.   What a bunch of clueless a^%wipes. 
 Its almost funny how stupid they are.  

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BeenThere wrote:Betsy you're killin me here.    At first I thought that you meant what you wrote.   But then I realized that no one that works at UBS is naive enough to believe what you said.    You have truly mastered the art of sarsasm!!!
 
 

Been there, she's right on with her comments-- no sarcasm at all.  I'm having my best year ever at UBS or any other firm.  Clearly, we have a few stooges at the top, but that seems to be sorting itself out.
 
The products and service I can provide my clients at UBS are best in class.  There may be other firms and FA's that can equal it, but nobody is better.  I say this while having very good friends who work in bank channels, LPL, Schwab, RJ, Jones, Citimorg, and others.  Every firm has trade offs, and we're no different.  One day, will I be an indie?  Maybe, but it's so difficult to move a practice, I seriously doubt things could ever get bad enough for me to make a move.
 
Maybe my situation is different from most of my colleagues across the country.  If that's the case, then I'm one fortunate fellow.  It does sometimes feel like I'm playing on a team with a losing record, but when I look at my immediate team and my colleagues in the office where I work, I see a group of very successful FA's that are also having one hell of a year in 2009.  This, despite all the distractions in the last 2 years.
 
I also see our stock price going straight up for the first time in several years.  Only a small portion of my net worth is tied up in our stock, but the fact that it's going up indicates that others share in mine and betsy's optimism that brighter days are ahead for UBS.  In a way, our friend Ab may finally be on to something.
 
LA
 
 

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Lew Ashby wrote: BeenThere wrote:Betsy you're killin me here.    At first I thought that you meant what you wrote.   But then I realized that no one that works at UBS is naive enough to believe what you said.    You have truly mastered the art of sarsasm!!!
 
 

Been there, she's right on with her comments-- no sarcasm at all.  I'm having my best year ever at UBS or any other firm.  Clearly, we have a few stooges at the top, but that seems to be sorting itself out.
 
The products and service I can provide my clients at UBS are best in class. 
  Yeah those Lehman Structured Products, best in class. Sorry while I puke in the bushes.

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Been there, she's right on with her comments-- no sarcasm at all.  I'm having my best year ever at UBS or any other firm.  Clearly, we have a few stooges at the top, but that seems to be sorting itself out.
 
The products and service I can provide my clients at UBS are best in class.  There may be other firms and FA's that can equal it, but nobody is better.  I say this while having very good friends who work in bank channels, LPL, Schwab, RJ, Jones, Citimorg, and others.  Every firm has trade offs, and we're no different.  One day, will I be an indie?  Maybe, but it's so difficult to move a practice, I seriously doubt things could ever get bad enough for me to make a move.
 
Maybe my situation is different from most of my colleagues across the country.  If that's the case, then I'm one fortunate fellow.  It does sometimes feel like I'm playing on a team with a losing record, but when I look at my immediate team and my colleagues in the office where I work, I see a group of very successful FA's that are also having one hell of a year in 2009.  This, despite all the distractions in the last 2 years.
 
I also see our stock price going straight up for the first time in several years.  Only a small portion of my net worth is tied up in our stock, but the fact that it's going up indicates that others share in mine and betsy's optimism that brighter days are ahead for UBS.  In a way, our friend Ab may finally be on to something.

Keep those blinders on and that attitude. You'll be doing monster numbers.

(UBS sucks so bad its not funny.   But better times coming)

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UBS has good marketing materials.  The PACE brochures, the online proposal system, etc.  The back office processes are terrible, the investment platform isn't unique is any positive way, the firm marks up bonds way too much.  And the trust company is disaster.  There is no reason to ever go to UBS.  Plenty of reasons to leave.  Moving is not as difficult as getting a "non-standard" seminar approved by the idiotic marketing resource desk. 

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Didn't use the Lehman Bros structured products-- nice try borei.  Will only do FDIC-backed CD's.  By the way, stay out of my bushes, you perv!
Again, maybe I'm lucky.  I only use our best products-- PACE Multi, Funds of Funds, SMA's, and VA's.  If the bond desk marks bonds up too much, I wouldn't have the slightest idea, as I don't use 'em.  I did get caught up in the ARC mess last year (which happened at more than one firm), but ironically, ARC's had better performance than most anything else last year.  And UBS made all my clients whole anyway.  That doesn't excuse what happened, but I think they made the best of a terrible situation.  And they did more than any other firm that I'm aware of to atone for the mistake. 
 
Regarding seminar approvals, you're probably right.  It does take too long for approval, but again, I don't need to do them, so it doesn't affect me.
 
The trust company's a disaster?  We use Comerica, so again, not an issue.
 
UBS Global Asset Management is a loser as well, but we've been smart enough to not use them either.
 
Every firm has shiite products-- It's up to us to pick the good ones for our clients.  I heard an FA say once, "My job is to protect my clients from the crap my firm wants to sell them."  So far, I've struck out once (ARC's), but one major strikeout in a career isn't bad.
 
LA
 
 

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That stellar rep UBS has helps too, eh Lew? Tax fraud. Three presidents in two years. Massive, over sized losses. That koolaid is tainted, drink it at your own risk.

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borei wrote:

That stellar rep UBS has helps too, eh Lew? Tax fraud. Three presidents in two years. Massive, over sized losses. That koolaid is tainted, drink it at your own risk.

Name one large financial with a stellar rep dumb as$?    Jamie D maybe (?)
Although the average Joe hates all of us, including chase.

c
mer
leh
ms
aig
fnm
fre
bsr
etc

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Lew Ashby wrote:
Didn't use the Lehman Bros structured products-- nice try borei.  Will only do FDIC-backed CD's.  By the way, stay out of my bushes, you perv!
Again, maybe I'm lucky.  I only use our best products-- PACE Multi, Funds of Funds, SMA's, and VA's.  If the bond desk marks bonds up too much, I wouldn't have the slightest idea, as I don't use 'em.  I did get caught up in the ARC mess last year (which happened at more than one firm), but ironically, ARC's had better performance than most anything else last year.  And UBS made all my clients whole anyway.  That doesn't excuse what happened, but I think they made the best of a terrible situation.  And they did more than any other firm that I'm aware of to atone for the mistake. 
 
Regarding seminar approvals, you're probably right.  It does take too long for approval, but again, I don't need to do them, so it doesn't affect me.
 
The trust company's a disaster?  We use Comerica, so again, not an issue.
 
UBS Global Asset Management is a loser as well, but we've been smart enough to not use them either.
 
Every firm has shiite products-- It's up to us to pick the good ones for our clients.  I heard an FA say once, "My job is to protect my clients from the crap my firm wants to sell them."  So far, I've struck out once (ARC's), but one major strikeout in a career isn't bad.
 
LA
 
 Lew,  you are right about PACE Multi only.   
 
Take another look at the SMA's on UBS's ACCESS platform.   If you really understand your job and if you feel any responsibility to your client at all, you would not in good conscience be able to recommend those lackluster managers.    Ask Investment Solutions if the managers on the UBS recommended list have had to pay for the self space.   Also ask why there are so few top quartile managers on the ACCESS platform...       
    

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Lew... posting your ability to avoid the many landmines is not a big endorsement for the platform.
 
I have noticed many folks on here debate the quality of firm or another or indy vs wire etc.. The fact is when this all passes Merrill, MSSB and UBS will still be the big firms, nothing will change.

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igrift wrote:
Lew... posting your ability to avoid the many landmines is not a big endorsement for the platform.
 
I have noticed many folks on here debate the quality of firm or another or indy vs wire etc.. The fact is when this all passes Merrill, MSSB and UBS will still be the big firms, nothing will change.

 
You're right....though Merrill and MSSB will dwarf poor little UBS in size.  We either need to combine with JPM or go private and become more of a boutique firm.  God help us if Hong Kong Shanghai Bank Corp. buys us. 
 
Regarding the platform, I believe every firm out there has landmines in their respective platforms.  Even "squeaky clean, virgin-white" EJ.  I've been fortunate to avoid all but one (so far....knock on wood).  But like I've said, the UBS platform can compete well with anything out there.
 
LA

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Yes, the fact is they will not change. They will still be big firms and a home for lame management and complacent reps afraid to leave because of the constant middle management banter of why smaller firms can't offer the 'total wealth management client experience.' 'Keep the faith brother.'

Yes, they are Big - and burgeoned with their layers of middle management ilk who add no value to the client experience. Now watch 'em cut cost and scurry to pair back for their senior management sins. Ah, the security and strength of the behemoth leaders!    

And yes Lew, you have a great positive attitude and senior management likes guys like you. You'd be amazed if you experienced life outside the cell block... Trust me, the outside is better and with an attitude like yours, you'd flourish outside the wire cell. Senior management adds nothing and their constant talking points have become quite stale. Have the courage to leave the mother ship... The big firms will still be big - just like a big government that tries to convince the population that it must rely on their programs.

One thing that will not change - big firms opinion of their own value and arrogance. They certainly will not change their views and fail to realize that the advisor / client experience is really about the rep and the personal relationship with the client. It doesn't matter if you are at a wire or independent...it's about helping the client and has nothing to do with the size of the firm. Big isn't best. You just can't institutionalize the client no matter how hard you want it to be "You and Us." Say good bye to "us" and the gluttony of management and join the "you and me" independent way. It's the future...

When you jump the wall and get outside, you won't care if they "get their act together" or repair their reputation. What value do you get from your firm? Don't you deserve to have a better experience from your leaders? When all this passes...hey, you're right - they won't learn and nothing will change.    

      

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LogansRun wrote:When you jump the wall and get outside, you won't care if they "get their act together" or repair their reputation. What value do you get from your firm? Don't you deserve to have a better experience from your leaders? When all this passes...hey, you're right - they won't learn and nothing will change.           

Still nobody has made a case for me to uproot my business and go indy.  I'm not afraid in any way of being out from under their wing.  Really, that wing is useless to me.  It's really about not wanting my clients to have to go through another move.  Been there, and unfortunately done that.  Besides, with all the momentum my business has at UBS, why rock the boat?  Business is great, and "if it ain't broke, don't fix it."  Face it people, I'm happy where I am!

 
What you folks don't understand is that I'm not feeling any pain due to UBS right now.  If there's no pain, why go through the pain of going indy to get back to no pain again.  Doesn't make a lot of sense to me.
 
I have a beautiful office in a great part of town in arguably the best place to live in the country, where I work with several hundred of the best clients a knucklehead like me could ever ask for.  I have a beautiful wife who loves me (3 out of every 4 weeks) and healthy, beautiful children who tolerate me.  I play golf and work out twice a week, canoe once a week, I watch movies whenever I want on my big screen plasma,  I drive the car of my dreams,  I'm healthy, and this was all provided by winning the lottery of being born in America.
 
I guess upper management stooges at UBS don't really have much of an effect on all that, try as they might.  When and if they do, I then and only then will even come close to making a change of firms.  Until then, it's onward and upward for this guy....at UBS!
 
LA

exUBS's picture
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Joined: 2009-04-23

Like all firms UBS has good and bad.  Marketing approval is a black hole for example.  They are good at creating polished turn key products to deliver to clients.  Pace Multi and FGA are great examples- but the elimination of PACE Multi models was a mistake.  Bond Desk has its limitations, but can be worked around if you know what you are doing.  There is a haircut on the bond desk before you see any bond offerings.  Of all the firms, they did the best job of handling ARC issues....just about everyone has been made whole and because of the freeze, many clients were protected from themselves and actually had a positive return on the money that was tied up.  For clients that absolutely needed access to funds (estate settlement etc), the client could borrow funds at no net cost to them.  Their recomended equity portfolios have had good performance (which surprised me when I was there). 

 
Middle and upper management tiers are a joke.  No one wants to refer business to the HNW centers because after the initial referral fee is paid, the client is lost.  Doing annuity business is more difficult due to compliance and admin issues.  UBS Glolbal Asset Mgmt is mediocre at best, but their story is compelling and can be used to sell other products.
 
Like all firms, some good and some bad.  Though their headline risk is different than their competition due to IRS issues.
 
They need to decide how they want to position WMUSA or sell it. 

igrift's picture
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Joined: 2009-03-01

well said Lew.
It is important to appreciate all that is great in life.

BeenThere's picture
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Joined: 2009-07-31

Lew,
 
 Why does UBS have to pay the highest  recruiting bonuses on the street  to entice brokers to join them?    
 
   

Lew Ashby's picture
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Joined: 2009-01-13

That's a good question.  Every wirehouse is currently paying high bonuses right now.  Maybe UBS pays the most, but I don't know.  Merrill is certainly up there.
Here's what I think.  Successful, self-motivated FA's are naturally entrepreneurs at heart.  We all enjoy "owning" our own business.  To entice FA's to stay within the wirehouse circle and not go indy, maybe that's what it takes.  UBS probably feels that if they are going to compete with the other big firms, they must compete to win, hence the highest recruiting bonuses.  But who the hell knows why they all do it?
 
Maybe it's this... Changing firms is an absolute pain in the neck.  If we're going to go through the misery, we must be compensated.  If we leave and go indy, we are compensated with higher payout and autonomy.  If we go with another wire, they have to write a check.  One way or another, if an FA changes firms, he or she will only do it if it financially will benefit him or her as well as their clients.
 
But it's crazy, if you ask me.  The payback period is so long-- I'd love to see how many actually pay off.
 
LA
 
 

exUBS's picture
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Joined: 2009-04-23

Look at the question another way-  which big wirehouse has seen the most FA departures in terms of raw numbers and AUM ?  I think it is UBS, if not then they are a close second.  They may be paying high upfront bonuses if only to keep their top producing FA and AUM numbers from looking worse than they do.  They need to recruit if only to stay even.

TT's picture
TT
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Joined: 2009-09-04

UBS's recruiting deal is currently below the levels of MER/BAC (highest of the largest Firms) as well as MS/SB. 
 
 

B24's picture
B24
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Joined: 2008-07-08

"But it's crazy, if you ask me.  The payback period is so long-- I'd love to see how many actually pay off."
 
I would put the payback at 3-5 years for big producers, shorter for smaller producers (because their payout is lower and the recruiting bonus is smaller).
 
Look at it this way, 500K producer, average 50% payout at new firm (including bonuses, profit sharing, etc.). 
Get 150% of T-12, that's 750K. 
50% of 500K is 250K per year. 
250K x 3 = 750K.
 
Also, depending on how much is upfront, it may be a break-even each year for those 3 years, with a new % coming due each year (the balance sits as a liability).  They are basically just leveraging new business.  And enough guys will stay beyond the retention period to make it wildly profitable.  And with most guys being brought into an existing office, there is very little in added expense/overhead to bring them on.

burtonfinancial1's picture
Joined: 2008-09-30

A little prediction revision here on the thread as intel seems to be more consistent around these issues:1) On potential sale;  HSBC or Credit Suisse and in 2009.    HSBC would be a retention disaster for many reasons.. if you care.. I'll answer with an in depth response as to why I say that. Credit Suisse... lots of upside imho. 2) On FA RIF (reduction in force).... instead of terminations like April, UBS will just adjust grid and starve LOS 5+ if < $350k starting in Oct.  Why? Saves them lots of money. Much cheaper than terminating people and there'll be less $ given away in voided/forgiven transitional packages.  They might as well term folks because it'll have the same impact on headcount and aum in the end. Few can drive production fast enough to dig out.  If the market softens in Q3 into Q4 it'll obviously accelerate this. There will also be some hits to long timers < $500k or close to that. For example...Mr. FA with LOS 'forever' dragging in the  $300s or $400s. 3) Sales Managers... Oct. - I think this is well known already... massive 'complexing' will occur in small branches.  A bunch of guys forced into production.  Some smart ones with a good following and some willing and loyal FAs will lift out here and there.

ShotInTheDark's picture
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Joined: 2008-03-25

Credit Suisse? After all that has happened you think another SWISS bank would try to gamble on the US market?  Their model does not work here. 
 
Also, if that happened I bet you would see massive departures as most UBS fa's don't want to be owned by a swiss bank now.
 

Lew Ashby's picture
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Joined: 2009-01-13

We haven't heard form secretknowledge for a long time.  Secret, you out there?
 
LA

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