Robert McCann, the new chief executive of UBS Wealth Management Americas, took aim at the culture of the firm this morning, while praising its network of 7,300 financial advisers.
Robert McCann, the new chief executive of UBS Wealth Management Americas, took aim at the culture of the firm this morning, while praising its network of 7,300 financial advisers.
Mr. McCann, who was speaking with UBS AG executives at a conference in Zurich, Switzerland, said the company's culture stressed academic programs over pragmatic plans. He also complained that the company's leaders hadn't executed well and had been slow to make decisions.
“Before I arrived, and even after I did my due diligence, I had the perception that the wealth management business was significantly behind its competitors in just about every way,” said Mr. McCann, who joined UBS at the end of last month. “Now, make no mistake about it, there is significant work to do to improve this business. But we have good people; we're going to add to the number of good people, and we also have areas of strength I'm quite confident we can build on.”
The culture needed to change and become more agile and less bureaucratic, Mr. McCann said. “There has been a lack of disciplined leadership in this business,” he added.
Mr. McCann did, however, praise the “strong quality” of the financial advisers in UBS' Americas division. He also said his joining UBS had nothing to do with spinning the business out or bringing the business public.
Within 100 days, the firm is committed to creating a definitive plan for wealth management in the Americas, he said.
“We will be aggressive in our goals. We will have an advice-led platform at UBS,” he said.
Mr. McCann said his goal is to generate pre-tax profit at the wealth management group of $980 million over the next three to five years. He made his comments in the context of UBS AG plans to return to profitability. The bank expects to see a profit of 15 billion Swiss francs ($14.9 billion) in that time.
Mr. McCann noted the UBS Wealth Management Americas had returned to profitability in the third quarter, recording a pre-tax profit of $108 million, compared to a loss of $216 million in the second quarter.
Across the entire organization, executives for UBS AG noted earlier today that they are aiming to make an annual pretax profit of 15 billion Swiss francs ($14.9 billion) in three to five years.
The bank set out a series of medium-term goals aimed at returning the one-time financial powerhouse to profit even as it indicated there will be no quick turnaround.
"We have made tremendous progress in increasing our capital and positioning the group for renewed growth, but work remains to be done," Chief Executive Oswald Gruebel said in a note to investors.
"The transformation we are undertaking is a fundamental one and it will not happen quickly," he said. "I am determined, however, that we build a firm for sustainable profit and not one to focus only on short-term expectations."
UBS is targeting a cost-to-income ratio of 65-70 percent and a return on equity of 15-20 percent by 2015.
