The merger of the U.S. and international wealth management units at UBS will result in a new senior leadership structure.
UBS, which reported fourth-quarter earnings on Monday, combined the two businesses into a Global Wealth Management division in order to gain greater efficiencies, with the unit's co-presidents calling it "a natural step in the evolution of our franchise."
The move will result in greater scale and efficiency and permit new investments in technology and other areas, Tom Naratil and Martin Blessing said in an internal memo.
Naratil and Blessing were named as co-presidents as part of the firm's announcement. They previously led UBS Wealth Management Americas and UBS Wealth Management, respectively. Blessing had assumed leadership of the non-U.S. business in December following Juerg Zeltner's departure.
"All business areas will report jointly to both of us, but to ensure maximum efficiency day-to-day, and being conscious of time zones, Tom will take primary responsibility in the US and LatAm, and Martin in APAC, EMEA and Switzerland," they wrote.
UBS has previously made moves to combine some back-office functions of its various wealth management businesses. But the new merger goes a step further.
"UBS is one of the very few wealth management firms that has a truly global reach. So there are a lot of capabilities that would benefit from each other's resources, their muscle, if you will," says Alois Pirker, research director at Aite Group.
Pirker adds that there are limitations to integration. For example, regulatory regimes between nations can be vastly different.
Among the Swiss firm's leadership, Brian Hull will continue to lead wealth management businesses in the U.S. and Canada, though it will be renamed Wealth Management USA, according to the memo. John Matthews will still head Private Wealth Management and the ultrahigh-net-worth segment in the U.S., and report to Hill and Joe Stadler, who oversees UHNW for the new Global Wealth Management division.
Among other changes, Jason Chandler and Christian Wiesendanger will continue to lead Investment Platforms and Solutions, where they be responsible for several initiatives including bringing investment products from emerging markets and elsewhere to the U.S.
Mark Ryan will continue to run the chief investment office in the Americas. He reports to Mark Haefele, global CIO. Reto Wangler serves as COO of the new combined unit, replacing Dirk Klee, and Paula Polito acts as client strategy officer. The firm is combining strategic marketing, client experience and client research under her purview.
UBS is discussing future opportunities with Klee and Paul Raphael, who led wealth management in EMEA and Latin America, according to the memo.
UBS's new global wealth management unit will aim for an annual net new money growth rate of 2-4%, according to the memo. For the fourth quarter of 2017, the company reported 14.4 billion Swiss francs of net new money for the international unit. The Americas wealth unit suffered outflows of $500 million.
The merger takes effect February 1. UBS will report joint numbers for the merged businesses beginning with the first quarter of 2018.