The first casualty of the wealth management wars may be UBS, according to an ex-Swiss banker.
One of Wall Street’s most persistent rumors, says Alois Pirker, a widely respected analyst at the Aite Group, is that UBS’ New York-based Americas unit could go on the block this time. And he’s skeptical of his former employer’s commitment to wealth management, despite its recent tech investments, adviser compensation sweetener and a management shake-up.
Pirker, who once worked in London and Switzerland for the posh Swiss bank, says UBS has “no interest in brokerage.” UBS Wealth Management Americas (WMA) is really a grand “marketing outlet” beset with moneymaking and profitability challenges, he said.
US clients are, in a sense, more of a “liability,” he told The Post in a veiled reference to past tax-avoidance trouble for UBS.
Pirker said a sale of UBS WMA “still might happen,” though it would result in major territorial loss.
He also thinks UBS would likely not recover the multimillion-dollar price it paid in its 2000 transaction for the former PaineWebber.
“The Swiss overpaid back in 2000,” said industry headhunter Danny Sarch. “But to me, a sale of UBS WMA would be illogical,” he added, citing tax-deferred accounting advantages resulting from the unit’s financial position today. “Besides, UBS WMA is earning money.”
But it may not be earning enough. Although UBS WMA employs some of the most productive, multimillion-dollar producers in the business among its ranks of 7,100 brokers, the unit struggles to hit profitability and margin targets.
UBS WMA is not for sale, a spokesperson for the brokerage said. “Our wealth management franchise is at the core of our strategy and we are uniquely positioned in the US to succeed,” the spokesperson added.