The firm on Tuesday announced wide-ranging leadership changes in its U.S. wealth operations and plans to devote more attention to pursuing clients below its typical ultra-high-net-worth neighborhood.
A version of this story ran as breaking news Tuesday on Financial Advisor IQ.
UBS Wealth Management on Tuesday unveiled plans to broaden its focus on clients below the ultra-high-net-worth band and has reconfigured its leadership as part of the initiative.
The wirehouse is expanding its field management structure to four regions, from two national divisions, in addition to UBS International and the Wealth Advice Center, Rob Karofsky, president of UBS Americas, and Michael Camacho, head of UBS Global Wealth Management US, said in an internal memo, a copy of which was viewed by FA-IQ.
Effective Jan. 1, the four regional directors will be Chris DiMuria in the Northeast, Julie Fox in the Southeast, Lauren Gorsche in the West and Jon Ramey in the Central.
DiMuria is currently managing director and market executive for the Manhattan market; Fox is the Philadelphia-D.C. market executive; Gorsche is the Los Angeles market executive; and Ramey is market executive for Ohio, Indiana and Michigan.
Rick Gonzalez, currently international division director, will serve as head of UBS International, and Len Golub, head of corporate and institutional advisory solutions, will serve as head of the Wealth Advice Center.
"This new alignment will empower our field leaders through faster decision-making, enhanced responsiveness to client needs, and greater connectivity with our full client offering," Karofsky and Camacho said in the memo.
In addition to those changes, Private Wealth Management will become a dedicated cross-regional advisor segment, led by John Mathews, who will be tasked with helping advisors grow their business as well as overseeing recruiting, retention and "holistic delivery of UBS' institutional caliber capabilities."
UBS is also expanding its Global Family & Institutional Wealth pod to include capabilities from the UHNW Solutions Group and from the newly created Unified Global Alternatives, to provide more seamless access for the firm's wealthiest clients. Access to those services is also being broadened to include individual clients with a net worth exceeding $50 million. Charles Otton, who currently leads the GFIW client segment, will lead the combined "UHNW Plus" segment, according to the memo.
As part of the restructuring, UBS will devote more attention to pursuing clients in the high-net-worth and core-affluent segments, targeting those with more than $5 million or between $500,000 and $5 million in assets, respectively, according to a Tuesday Wall Street Journal report and an FA-IQ source familiar with the plan.
The bank's focus has long been on building an advisor force with strong books of ultra-wealthy clients in key markets, but in recent months its top executives have stressed the need to push profit levels closer to those of its industry peers, such as Morgan Stanley and Merrill Lynch.
Morgan Stanley, whose wealth management profit margins are more than double those of UBS, was aided in its move downstream by the scale provided through its 2020 acquisition of E*Trade, noted Alois Pirker, founder and chief executive officer at consulting firm Pirker Partners.
"The lower you go, the more scale you need to have to have higher profitability," Pirker told FA-IQ Tuesday. "Most firms that have moved down market ... have a hard time getting to that scale. So, a play like this could help them, but you need a scale factor underneath to really get them to profitability."
Pirker also said that UBS lacks the technology infrastructure to accommodate the needs of lower-asset clients. The firm in January 2022 announced it had agreed to acquire the Wealthfront robo-advisor, which seemingly would have provided a downstream gateway, but the deal was scuttled later that year.
But with the proper tech investment, expanding the focus on lower wealth bands could boost advisor productivity, according to William Whitt, who covers the wealth management business for Datos Insights.
"That actually seems like a reasonable strategy to me," Whitt told FA-IQ Tuesday, adding that the changes are more likely "acknowledging reality than anything else, which is to say the UBS reps had ... most of their books in that 500K [dollar] to 5 million [dollar] spot anyway."
A Datos analysis of the Survey of Consumer Finances shows roughly 9 million U.S. households in the wealth range of $500,000 to $5 million, according to Whitt. That contrasts with slightly more than 1 million who have more than $5 million, which is closer to the range UBS has targeted historically, according to the same data.
As for the tech end of the equation, the firm has committed to a tech investment alongside its new wealth initiative, according to Tuesday's Wall Street Journal report.
In a bid to more closely replicate the business models of its more profitable competitors, UBS is also aiming to accelerate the business development of its client-feeder channels and specialty practices, including the workplace division, equity plan administration, retirement plan services and financial wellness, per Tuesday's memo. Longtime J.P. Morgan executive Ogden Hammond will join UBS in January to lead strategy in these areas for Global Wealth Management Americas, according to the memo.
Meanwhile, in its 2025 advisor compensation plan, announced late last month, the wirehouse added incentives for advisors who connect clients with banking capabilities.
UBS is not on even footing with its main competitors in terms of U.S. banking services, but the firm is taking steps to close that gap. Reports emerged last month that the firm was pursuing a national banking charter. Although a source familiar with that plan said Tuesday that media reports of an application having been submitted were and remain inaccurate, the process is in progress, though likely years away from fruition.
Karofsky and Camacho also said on Tuesday that the firm plans to streamline its sales and development organization, led by Bill Carroll, to focus on national sales and field engagement, in a bid to provide more timely and well-coordinated delivery of investment content and capabilities to clients and advisors.
The Global Wealth Management US Chief Administrative Office, headed on an interim basis by Michael McVicker, will expand to include advisor recruiting and retention, teaming and practice management, and talent development, according to the memo.
The Wall Street Journal first reported Tuesday's memo.