UBS Expands McCann's Role to Group Americas CEO
Robert J. McCann was named chief executive of UBS Group Americas, adding to his responsibilities for the firm’s wealth management unit, the Swiss-based firm said Thursday as it announced a new leadership lineup.
In an internal memo to employees on Thursday, McCann said he is “proud” to serve in his new role as chief executive of UBS Group Americas. McCann replaces Philip J. Lofts as chief executive of the group Americas unit, as Lofts reclaims his former role as group chief risk officer.
Lofts replaces Maureen Miskovic, who is leaving UBS after assuming the position of chief risk officer in January. That shift comes as UBS continues to grapple with ongoing changes following the September revelation that a rogue trader in its London investment bank had allegedly caused $2.3 billion in losses for the firm. In September, Sergio Ermotti stepped into the role of CEO for the overall firm following the resignation of Oswald J. Grübel.
In the memo, McCann said the move reflects UBS’s strategy unveiled by Ermotti earlier this month to leverage the wealth management business with the investment bank and asset management business.
“Central to my mission as CEO will be working with all of you to meet the growing needs of our clients,” McCann said in his memo. “We have talented people with the ability and the expertise to develop innovative, world-class solutions to exceed these demands.”
McCann’s new role will include the coordination of the business units in the Americas, which includes the U.S., Canada, Latin America and South America. That means helping the asset management, investment banking and wealth management businesses coordinate when, for example, an ultra high net worth client is selling or merging their business, a UBS spokesperson said.
Employees in those business units will continue to report to their respective leaders. The responsibilities of the chief executive role in the Americas has not changed with the leadership transition.
The risk leadership shift is probably tied to the rogue trading event, Alois Pirker, research director at Boston-based financial services research firm Aite Group, said on Thursday, while the appointments may have also been planned to reflect Ermotti’s new leadership.
For McCann, the expanded role is a sign that he is appreciated at the firm, Pirker said. Having McCann in that dual role also shows that UBS, like other firms, is streamlining its leadership and decision-making resources.
“Having too many layers is certainly distracting, and I think we see that around the industry,” Pirker said. “Firms are trying to reduce layers and become more effective in their decision making.”
McCann also said in the memo that he sees a “bright future” for the firm, while also acknowledging that the firm’s goals will take time to accomplish and the current market conditions will likely persist. Most recently, in the third quarter, the firm reported that net new money in UBS Wealth Management Americas was up 55% to $4.8 billion compared to $3.1 billion in the second quarter. Net new money including dividends and interest in the third quarter was up 20% to $9.5 billion from $7.9 billion in the second quarter.
The unit reported that pre-tax profit was up slightly from the second quarter, rising to $165 million and compared to a loss of $47 million in the third quarter of 2010. Pre-tax profit year-to-date was $444 million versus a loss of $93 million in the first nine month of 2010.
And revenue or operating income was $1.54 billion in the third quarter, a 2% rise from $1.51 billion in the second quarter and increase of 16% from $1.325 billion in the third quarter of last year.
However, it was revenue per financial advisor that UBS was particularly proud of since it rose by 1% to $895,000 per FA in the third quarter from $884,000 in the second. That was a 14% improvement from the same quarter a year ago with it was $782,000 per advisor.
Separately, UBS also appointed Ulrich Körner to the position of chief executive of the firm’s Europe, Middle East and Africa businesses on Thursday. Körner will continue to serve as group chief operating officer and chief executive of the firm’s corporate center.
McCann, Lofts and Körner will all continue to serve on the firm’s group executive board.