UBS Wealth Management Americas, the U.S. brokerage arm of UBS AG, has told staffers that the company is planning no financial adviser cuts in connection with the Swiss bank's announced plans to eliminate 3,500 positions across much of the firm.
"These reductions will occur mainly in the investment bank and Swiss bank, and they will have little to no direct effect on you, our advisers," the U.S. brokerage's chief executive, Robert McCann, explained in a memo sent to the firm's financial advisers and obtained by Reuters.
The firm has done well with its financial advice effort. Despite a small decline in pretax profit in wealth management overall, UBS' Wealth management Americas unit swung to a profit of 140 million francs in the latest quarter, from a pretax loss of 67 million francs during the second quarter of 2010.
Besides the profit at Wealth Management Americas, UBS' wealth management units overall reported net new money of 8.2 billion francs for the second quarter, while its retail and corporate division had its first outflow in three quarters.
In a statement to investors, UBS said "Net recruiting of financial advisors was the primary driver of net new money in the second quarter."
UBS said its UBS Wealth Management Americas unit would be responsible for about 10 percent of the company-wide job cuts. Those 350 cuts represent a little less than 4 percent of the brokerage's roughly 9,400 employees who are not financial advisors. These cuts are expected to come from corporate headquarters and administrative areas, including information technology, instead.
The company, whose aggressive hiring of FICC, equities, and IBD staff eFinancialCareers News, recently announced plans to axe a total of 3,500 jobs to shave 2 billion Swiss francs ($2.5 billion) off annual costs as it joins competitor investment banks in reversing the post-crisis hiring binge and preparing for a tough few years ahead.
Almost half the cuts company-wide are expected to be in investment banking, UBS has stated.
The firm also predicted it would cut jobs when it posted weak second quarter profits last month, but said the reductions would impact none of it client advisors in wealth management.
Clearly the firm has done well with its advice giving effort:
Pretax profit at the wealth management and Swiss bank units fell 3.3 percent to 1.09 billion francs, while asset management posted a 7.7 percent decline to 108 million francs, Bloomberg reported.
In addition to retaining its US advisors UBS promised to keep at least 2,000 jobs in Connecticut under a five-year agreement with the state, in connection with a $20 million "forgivable" loan. The bank, which has about 3,500 people in the state, views the pledge as a minimum level-not a target, UBS Americas Chief Executive Officer Phil Lofts said in an interview.