In a much-anticipated address to the troops, Robert McCann, chief executive of UBS Wealth Management Americas, said that the company's advisor force of 7,000 brokers is just right.
While the other wirehouses have anywhere from 14,000 to 18,000 brokers, and regionals have as few as a couple hundred, UBS [UBS] will stake out a mid-field position with a strategy focused on agility.
Market observers say McCann’s town hall meeting with brokers on Wednesday went a long way to calm a workforce that has been frazzled over the past couple of years by dozens of defections, a tidal wave of bad press, and recent layoffs.
And industry recruiters who see firsthand accounts of advisors moving to and from firms say that the strategy is a good idea—if it can be executed.
Danny Sarch of Leitner Sarch Consultants said that the ability to be nimble will be a major attraction for advisors. If an advisor has a problem that can be addressed quicker at UBS than the major wirehouses, it would be a real differentiating factor, he said. If an advisor were seeking some type of an exception for a client he would be able to get an answer sooner at UBS, if indeed McCann’s plan is executed.
“At the big companies, there are fewer exceptions... you just can’t manage 18,000 people all doing exceptions, it would be too burdensome,” Sarch said, speaking about the other wirehouses.
Still, the execution part of this plan will be an enormous challenge, said recruiter Rick Peterson.
“The obstacles facing McCann are so dramatic, if he can pull this off, it will be one of the management coups of the century,” he said.
McCann also put to rest the ongoing speculation that UBS might re-brand itself as PaineWebber, or that the U.S. wealth management arm might be divested. Neither is in the plans, he said.
Much of the rest of the plan McCann outlined in his meeting was largely expected. He reiterated a plan to achieve $1 billion in pre-tax profit within the next three to five years. UBS will focus its resources on the high-net-worth and ultra-high-net-worth (which it defines as $1 million to $10 million, and more than $10 million, respectively). And it will focus on certain metropolitan markets. A spokesman said that this does not mean the company will shun the emerging affluent or core clients, or that it will close branches in smaller towns. But that the “bulk of the firm’s resources will go toward those markets will the highest potential.”
The firm indeed paved the way for a more nimble structure just this week when it made some job cuts at its headquarters. The company cut about 200 back-office jobs, mostly in New Jersey, including some high-level managing directors.
The layoffs were aimed at reducing he levels of management between advisors and the home office to make the business more responsive to advisors' needs, according to a company spokesman. The cost savings from the cuts will be reinvested in the business, mostly on the technology side, to address a lot of advisors’ concerns.
Peterson said after those layoffs that the industry buzz was that McCann had been telling people the firm was overstaffed at headquarters for the number of brokers it had.
Even though UBS will seek out a mid-field position, McCann said that it would be open to selective recruiting, according to some reports.
But that might be difficult with the current pay packages it currently offers, said recruiter Mindy Diamond. Diamond said earlier this week that the job cuts were not sitting well with advisors, many of whom would have welcomed a divestiture.
Both Diamond and Peterson said that one problem that has plagued the company is a lack of an identifiable image with advisors. At one time, it had a boutique feel that gave it some swagger, but that’s been lost over the past two years of bad press, Diamond said.