UBS Close to Deal With Bob McCann, Reorg Under Way
UBS has stepped up its courtship of former Merrill executive Bob McCann, discussions that began in June, according to a story in the Financial Times. If he is hired, he would replace Marten Hoekstra, head of UBS’s wealth management business in the Americas. The move comes as the bank works to contain damage to its reputation done by the tax evasion dispute with the U.S. government.
A spokeswoman for UBS says Hoekstra continues to run the firm's successful wealth management operation.
There have been questions about whether Hoekstra would stay at UBS for many weeks. One UBS advisor who recently spoke with Hoekstra said Hoekstra is very unhappy with the way things have turned out. The advisor isn’t optimistic about UBS’ ability to bring McCann on board, however. “McCann would be crazy to take the job because employee and customer morale is so low,” he says. The Financial Times story says that McCann has been hesitating because of UBS’ regulatory problems.
Yesterday, UBS reported withdrawals of about $15.5 billion from its domestic and international private banking units, bringing the year’s total to around $122 billion. UBS said Tuesday that it was reorganizing its global wealth management organization, dividing its Swiss operations off from the rest of the bank.
The U.S. division has also seen a number of changes in recent weeks. In the past 45 days, UBS has cut a number of market area managers—who manage a series of branch offices, says an advisor at the firm. In the past week, the firm also told all branch managers that they will have to be producing managers, says the advisor, which probably means a lot of branch managers will leave.
Both Bob McCann and Sallie Krawcheck, with the backing of private investors, tried to buy UBS’ wealth management operations in recent months, according to sources at the firm. But the Swiss don’t want to sell, they say. “Grubel says he’s not interested in selling until he can get a better price for it, but he may not have an advisor force by that time,” says one advisor. Morale is horrible and leadership is not there. “If Bob McCann comes on board, it’s not going to change anything. We’d all like to be sold.”
