Paul Hatch, head of advice and solutions, UBS Wealth Management Americas in Weehawken, New Jersey, is responsible for 6,989 financial advisors with $992 billion of investment assets (as of mid-December 2015). Research recently asked Mr. Hatch about his background and outlook for the wealth management industry; excerpts of the conversation are below.
Please tell us about one or more of the following: (1) the beginning of your career in wealth management; (2) your first client/first boss; (3) what you learned at a broker-dealer (BD) or firm early in your career.
I spent six years in the Navy and joined E.F. Hutton on the day I left the Navy. At 7:30 in the morning, I was processed out of the U.S. Navy and by 8:00 I was working at E.F. Hutton in Washington, D.C. I started in 1984. One of the interesting stories is shortly after arriving from training, my first day in production, E.F. Hutton, a very proud and great firm, which had been around for decades, reported that they had pleaded guilty to several thousand counts of wire fraud. The firm struggled greatly after that and two years later when the great market break of ’87 came, they had to close their doors and sell to Shearson Lehman Brothers. I learned two things from that. The first one was that your reputation is all that you have in this business. It takes a lifetime to build and a moment to break it and that even great franchises have weaknesses that they have to manage.
Given the turmoil that you stepped into, how did you land your first client?
That’s a great question. Fortunately for me, I had heard that the business was very tough and difficult and, so, when I began calling people during that timeframe I anticipated that it would be difficult. Indeed it was, but I also found out that if you are honest, direct, straightforward with people that you can gain their trust. While it took longer than normal to start the business, because it was difficult and I learned in difficult times, the other lesson I found was that if you start in an environment which was tough, when it eventually gets to be more normalized, you do very, very well.
How did you wind up moving to UBS and why?
I started with E.F. Hutton; it was merged into Shearson, which was merged into Smith Barney, which became part of Citi, which ultimately merged their business into Morgan Stanley. So, after nearly 30 years, I made a decision to take a year off from the business so I could evaluate the industry and what I wanted to do in the second half of my career.
After a year of searching I determined that UBS was the very best place for me [because] I wanted to be at a global bank of which UBS was one of the very best out there. I wanted to be in wealth management [and] UBS was the only bank focused clearly on wealth management. They had a strong balance sheet, which, after the turmoil I had experienced in three decades on Wall Street, I knew was very important. And, most importantly, they had a culture that coincided with my own set of values and that I very much appreciated. I joined UBS in May 2014.
Did you return into a wealth advisory role or management?
I got into production in the ‘80s and moved into management. By the time the ‘90s came I was in field leadership. From there I moved into headquarters nearly 18 years ago in New York and did almost every job that you could from national sales to training to running our, what was then called, interactive marketing and helped build our very first website. I helped Citi launch their first online broker-dealer and then ultimately took over responsibility for individual investment businesses. One [role] that was very important for me is I took over what at the time was the successor of E.F. Hutton’s managed money program at Smith Barney, which ultimately became the industry leader in that business, and [I] have been involved in the advisory businesses ever since. And, today, I have responsibility in the U.S. for all of UBS’ investment products, capital markets business, investment strategy with the chief investment officer and financial planning.
What is/are the most significant changes you have seen at your firm, and why did they occur?
That’s the kind of question we could have a discussion with for the next hour or two, certainly, but I think the industry has evolved a great deal from a transactionally oriented business to what is continuing to evolve but is a holistic wealth management approach. And, so, while planning and lending and other parts of the business were around 30 years ago, they were a very small part of the business and a very small part of the relationship with the client. Today that’s what it’s all about. It’s about a deep and very important relationship with each client in which you really understand their needs and which is anchored by a planning process that includes the ability to understand their financial picture across all of their assets and in many cases has an advisory relationship as the anchor of the investment solution. So, all firms are focused on solving a holistic picture for clients and looking for longer lasting and deeper relationships.
What is the biggest challenge facing your broker-dealer/firm today, and how is it tackling the matter?