UBS top brass sent out a blitzkrieg of reassurances to its prized financial advisors Monday to keep them in their seats and get them to reach out to potentially nervous clients. The effort follows the double whammy of bad news about the bank out in the past week—first the $2 billion loss brought on by a rogue trader and then the resignation over the weekend of CEO Oswald Grubel, who had long said the UBS Wealth Management Americas (WMA) unit is not for sale. On Monday, interim UBS CEO Sergio Ermotti and UBS Chairman Kasper Villiger sent a memo to advisors re-emphasizing that WMA is not for sale, a rumor that has been persistent despite continued denials by executives at the bank. Meanwhile, Bob Mullholland, head of the wealth management adviser group, got on a call with branch managers to offer his own reassurances. Those efforts followed a memo sent around by the head of UBS Wealth Management Americas Bob McCann last week.

“Given all the news surrounding our firm in recent days, it is unfortunate that rumors persist and we have to constantly restate a position that we have repeatedly made clear in the past,” Ermooti and Villiger wrote. “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. Again, this business is not for sale.”

In his call, Mullholland emphasized that it was the board and not just Grubel who wanted to keep the wealth management Americas group intact. UBS spokeswoman Karina Byrne also pointed to the strong ties between Bob McCann and Sergio Ermotti, who worked together at Merrill Lynch for 20 years, including a decade on the global equities side of the business. “Since Sergio came on board in April, they’ve gone to several dinners together. There is a great deal of respect there professionally,” she said.

“What’s the impact on [Wealth Management Americas]? In a word, nothing,” said Mulholland on the call. “We're not cutting [client service associates]. We're business as usual, focused on making this the best wealth management firm on the Americas. We're still working as hard as we can,” he said. “We are not for sale,” he repeated emphatically. “It’s the board's decision not to sell–not just Ozzie's."

Mulholland further encouraged FAs to talk to clients, especially the ones who have not called in wanting answers. “Be visible, talk to your people, communicate, be positive and move forward. Look back to new recruits: show that you care, spend time with them, answer questions."

Though it might seem like overkill, these memos and calls make a real difference, said one veteran advisor. “It’s a good idea to let everybody in our division know that we matter,” he said. “That’s the kind of thing that can really tick someone off, when management doesn’t realize how important your whole division is.”

Wealth Management Spin-Off Unlikely, But...

Of course, Ermotti is a temporary leader and any new CEO, when the UBS board finds one, may well have strategy ideas of his own; the new head could decide that a sale of the wealth management Americas division is for the best, said analysts. But while the private bank in general has not been as profitable as they want it to be, and the reputational damage caused by blunders on the investment banking side only hurt it, it remains the core business focus of UBS, they said.

“It’s still not posting the kind of returns UBS wanted to see,” said Morningstar analyst Erin Davis. “And now a new leader will come in and take a fresh start and may reconsider spinning it off. But I think UBS is going to stick to its larger strategy, to focus on its private bank, improve it where it needs to be improved, and bring the rest of the company in line with supporting the private bank…and any operations that imperil the private bank they may push aside.”

Even if a spinoff were in the cards, it would likely be a while, said Aite Group analyst Alois Pirker. Neither the board or the interim CEO will probably make a big strategy decision like that, and it’s going to take some time for them to find a new CEO, and then for that CEO to settle on the direction he thinks the firm should take. “I sort of think we’re a little bit back to square one here,” he said. “And obviously, there are urgent matters that need to be addressed now: brand and risk management and an investment banking overhaul. Those are really the most urgent items on the list. Wealth management Americas is not among those. But obviously the brand is something that affects them and it can be difficult for retail business if brand is tarnished so you can certainly feel that.”

Wells-UBS Combo

The most oft-rumored combination has been that Wells Fargo would scoop up UBS because Wells executives have said they are looking for wealth management acquisitions. If a spinoff did happen, there are a couple of other reasons that combination might make sense: risk management and differences in client focus.

“It makes a lot of sense from a reputation point of view. UBS private bank’s problem is its reputation,” says David. “And it’s often thought of as not a prudent risk manager. Wells Fargo is thought of as nothing more than a prudent manager of risks. It came through the subprime crisis much better than the other banks. I think those things rub off on eachother. The poor reputation of UBS’ investment bank has diminished the reputation of its private bank.”

Pirker notes also that while UBS tends to focus on the high-net-worth client, Wells Fargo’s sweet spot is more mass affluent. “It certainly would be an ambitious acquisition, but strategy-wise it would fit as UBS is going after larger clients than Wells is. It could nicely help them to bridge the gap between Wells’ current retail brokerage and the UBS private bank.” Pirker added that while it would be a major integration, Wells has quite a lot of experience with integration at this point, having digested Wachovia, which was already digesting A.G. Edwards. Another positive for UBS, he said, would be that Wells has invested quite a bit more than UBS in technology to complete its integration.

Veteran FAs Calm, Newbies Frantic?

Experienced financial advisors at the firm said that because of their long-standing relationships with clients, they did not have much to worry about. Younger, less experienced advisors who have not established as much trust with clients were having a harder time of it, they said.

My client relationships are such that they tend to roll their eyes at this sort of stuff,” said one top advisor at the firm. “They know that I don’t really rely on UBS. But some of the younger guys who don’t have a trail of experience with their clients, it’s more difficult for them. I’ve tried to help them and intervene,” he said.

Another veteran UBS advisor agreed. “I really haven’t had any clients react at all. Most of my clients don’t pay attention. It’s more of a potential worry for brokers who use a lot of investment banking products,” he said. He does not.

A third advisor, long on Wall Street, says he’s not worried. “I have so much confidence in Bob McCann and Bob Mulholland. As long as those guys are in a leadership positions, I can sleep at night. Plus there’s nothing you can do about it.” It also doesn’t make financial sense for them to unload their most profitable unit, he added.

Younger advisors he agreed are suffering, but “anyone who’s been doing this for 20 years, you get used to it, you grow numb.” That said, he admitted, the cumulative stress of so much bad press for Wall Street was getting to him. “For me, if I were going to do anything, I would get out of wealth management generally. It’s just exhausting, the things that are happening. Things that are totally out of your control, that make your situation so much harder. You’re walking around with a target on your back,” he said, and mentioned some of the protests happening down on Wall Street. “They don’t really even get what they’re protesting about.”