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September 01, 2009 at 04:00 AM
In early August, U.S. authorities struck a deal with UBS over the names of some 4,500 UBS clients who may have evaded taxes and a possible fine. At the same time, speculation over the future leadership of UBS’ wealth-management operations in the America continued, with former Merrill Lynch head Bob McCann moving to settle a lawsuit with Merrill-buyer BofA over the right to work for competitor UBS.
UBS had 7,939 advisors in the Americas as of June 30, 2009. This is a decline of 821 from 8,760 in the previous quarter and 616 from 8,555 a year ago.
While UBS is in the process of selling some operations that include 320 advisors in 55 branches to Stifel Nicolaus, it says the recent drop in personnel reflects, at least in part, “planned reductions of lower-producing financial advisors.”
“The departures were partially offset by recruitment consistent with the business division’s strategy to attract highly productive financial advisors, although the pace of recruitment slowed compared with the prior quarter,” UBS adds.
Stifel says the UBS acquisition should be completed in the third quarter of 2009.
“UBS is on path that’s focused on high-end clients, so it’s going to lose some low-producing advisors,” says Chip Roame of Tiburon Strategic Advisors. “And I’m still not convinced it’s going to keep all of its current operations.”
The firm has been distracted by tax issues of late. According to a UBS statement of July 31, the U.S. government told the court in the John Doe summons case — which concerns private client information and taxation — that the parties have reached an agreement in principle on the major issues and expected to resolve the remaining issues soon.
In mid-July, the U.S. government and UBS, supported by the Swiss government, agreed to negotiations for the purpose of resolving the John Doe summons litigation, which is related to tax evasion and client information.
