The renewal plan touted by UBS Wealth Management Americas chief Bob McCann for turning around its asset-challenged brokerage is imminent. But it won’t be announced this week or next; instead UBS is eying an announcement in mid-April or later, people familiar with the matter told Registered Rep.
UBS watchers have been counting down the days since CEO Bob McCann gave a “Renewal Team” of top executives 100 days to help devise a turnaround strategy. “To me, the word ‘renewal’ best articulates our opportunity: to build on what’s good here and to renew the organization,” McCann said in a widely-circulated memo in November, shortly after his hire. “This team will function over the next 100 business days, and will work directly with me to define the best strategy to move us forward and develop the organizational structure necessary to execute on our plan,” added the former Merrill brokerage chief.
McCann’s team of heavy-hitters had 100 days to bury themselves in the details and then to prepare and deliver on deadline—which is right about now. Among the team are four former Merrill executives: Bob Mulholland, No. 2 executive behind McCann at Merrill; Brian Hull, who headed its Private Bank and Investment Group; trading and ops vet John Brown; and former Merrill marketing chief Paulo Polito. See Fixing UBS, Registered Rep, Dec. 2009.
Also in November UBS began to assemble a group of 14 FAs from its U.S. business to consult with its wealth management advisory committee. The committee was to help map out ways to make UBS more competitive in the tough U.S. advisory space.
People familiar with the UBS plan of renewal note that while an announcement was always possible as early as this week, it won't likely happen now until sometime during the week of April 12, or later. A spokesman for UBS, responding to Registered Rep., would only say an announcement is “expected” in the next two to three weeks.
That’s when McCann, who has invested himself heavily in the renewal plan -- and has drawn praise from FAs at UBS -- is expected to be ensconced back in UBS wealth management offices in Weehawken.
But even as attention turns to the plan, and speculation of sweeping changes inevitably grows (among them the rebranding of UBS back to PaineWebber, which UBS acquired in 2000 for $10.8 billion), McCann and his team have already taken some fairly significant – and decisive -- steps. The latest includes a reduction of 200 employees, about 2 percent of UBS Wealth Management Americas’ non-core brokerage staff of roughly 9,800, out of a total unit headcount of about 16,925.
These layoffs include some senior executives and back-office personnel. The UBS unit’s brokerage network of 7,100 are not affected.
Managing directors who were pink-slipped include Doug Black, who was chief operating officer of private wealth management for ultra-wealthy clients; Jamie Price, who once headed the wealth management advisor group; Jay Messing, who managed private client group sales; James Pierce, a vice chairman in wealth management; and Michael Robert in trust services.
In other moves at UBS Wealth Management Americas, McCann and his team earlier streamlined management and organizational structures, consolidating wealth management into two divisions from three. It also introduced an innovative FA comp plan that rewards loyalty and growth. Compensation is typically based on trailing commissions at many brokerages.
Still, the troubled UBS brokerage unit has lost brokers in the past 12 months. Clients have continued to pull assets; the Americas unit is under heavy pressure to return to long-term profitability. In the fourth quarter, $11.2 billion dollars went out the door compared with $9.3 billion in the third quarter. UBS, meanwhile, is still struggling with brand damage exacerbated by a global tax evasion scandal.
