The Swiss wealth manager's recent revamp of its super-rich unit raised eyebrows. The initiative for the idea didn't come from Iqbal Khan, its new co-head of private banking.
UBS CEO Sergio Ermotti in October gave his new hire, wealth management co-head Iqbal Khan, sixty days is the grace period. The former Credit Suisse star was to deliver fresh ideas and impetus for the world's largest wealth manager to kickstart growth.
The 43-year-old Khan delivered the first step nearly two weeks ago by shuffling UBS' ultra-rich unit, which is the cornerstone of its wealth strategy, as finews.asia reported. The move dramatically scaled back the purview of a Khan «MVP»: Josef «Joe» Stadler, who has overseen UBS' business with the super-rich since 2009.
Passive Super-Rich
Far from being a demotion for wealth veteran Stadler, the change was apparently his own idea, according to Swiss daily «Tages-Anzeiger» (behind paywall, in German). Stadler had floated the idea to CEO Ermotti as early as May, the newspaper reported.
The move effectively means that simply being super-rich won't get you the free shmoozing and perks that are common in wooing this segment. While the super-rich segment has won substantial new funds, UBS frets that not all of it is as lucrative as it hoped – some clients use UBS solely for trading or execution, which isn't a lucrative business for the bank.
Power Struggle
Stadler, one of the longest-serving private banking executives working for Khan, has his boss' backing to more aggressively lending: «Tages-Anzeiger» reported that the super-rich unit has roughly $200 billion more at its disposal to loan to super-rich clients.
The newspaper reported that a cumbersome internal decision-making process together with UBS' investment bank, where the super-rich clients have periodically been housed, will be abandoned. The securities unit will continue to handle risk management for the unit's clients – against a fee – though Stadler's unit has the ultimate say-so.
