UBS Wealth Management Americas made some cuts at its headquarters that some market observers say were widely expected, but the next step will hit closer to home for advisers.
The company cut about 200 back-office jobs, mostly in New Jersey, but some of those cut were high-level managing directors, including Doug Black, the chief operating officer of private wealth management for ultra-high-net-worth clients; Jay Messing, the head of private-client sales; James Pierce, a vice chairman in the wealth management Americas unit; and Michael Roberts, head of trust services in the wealth planning group.
The layoffs were mostly geared to reduce the layers of management between advisers and the home office, to make the business more nimble and responsive to advisers' needs, according to a company spokesman. There were also some redundancies. The cost savings from the cuts will be reinvested in the business, mostly on the technology side, to address a lot of advisers' concerns.
A spokesman for UBS said that no advisers were cut but declined to give further details until Robert McCann, the unit's chief executive officer, presents his business strategy in the next few weeks.
Others in the industry had no such hesitation.
Industry recruiter Rick Peterson said that the industry buzz was that McCann had been telling people UBS was overstaffed at headquarters for the number of brokers it had. Peterson said this round of cuts was widely expected.
To be sure, Peterson has been saying for months that UBS had too much infrastructure for its number of advisers and that McCann had to either cut infrastructure or add a significant number of advisers.
The next step, Peterson said, would probably be a "significant streamlining" of the field. If UBS really wants to beef up its ranks and compete head-to-head with the other three wire houses, which are all twice as big in adviser head count, it could not recruit enough, he said.
UBS would have to consider an acquisition of another wealth management firm, and that would be difficult, Peterson said. Recruiting could, at best, stem the flow of advisers leaving, he said.
But even that would be difficult with the current pay packages UBS offers, according to recruiter Mindy Diamond. She said these cuts at UBS are not sitting well with advisers, many of whom feel that the company is dressing up the unit for a sale. Indeed, that would be a welcome announcement for many advisers, she said.
Both Diamond and Peterson said that UBS no longer has an identifiable image with advisers. At one time, it had a boutique feel that gave it some swagger, but this has been lost after two years of bad press, Diamond said.
Meanwhile, UBS plans to add to its wealth management head count in Asia because of expected economic growth there, according to a press report, which cited the Straits Times, a Singapore newspaper.